How AI can shake up the co-op game

ChatGPT has disrupted workflows across industries since its debut in November, and real estate is no exception.

Some brokers are using the artificial intelligence-powered chatbot to write listing descriptions, answer questions about housing laws and assemble video scripts. Platforms like Redfin, ZIllow and Marketproof have already rolled out plugins using the bot developed by OpenAI. 

“Everybody is talking about what [ChatGPT] can do, what it might do, what it will do,” Coldwell Banker Warburg president Frederick Peters said.

But the technology “and whatever follows it, will have impacts that we can’t even imagine,”  have yet to be seen, Peters said, and there’s one notoriously cumbersome process ChatGPT could shake up. 

New York City co-op buyers are already leaning on the chatbot to assist with reference letters in their board packages. Coldwell Banker Warburg’s Dorothy Schrager said one of her clients took sample reference letters she gave him, plugged them into ChatGPT and directed the chatbot to write original letters with additional information about himself. 

“Out came some terrific letters which were very personal and caught his essence exactly. Unbelievable to me,” Schrager said. 

While the chatbot can provide a helpful template for buyers and their references, others say it’s still too early to rely on the technology entirely, as the writing lacks the tone and composition of a personal letter. 

What co-op boards look for in a letter and a package as a whole varies widely, and ChatGPT isn’t able to capture that nuance. 

“I often think of a board package as being like a college application. It’s very individualized, very personalized,” Corcoran’s Deanna Kory, whose team ranked second among the city’s top co-op brokers of 2022, said. “Right now, the best people to put together board applications are humans because we have the most information about what a board might be looking for.”

To arrive at that level of functionality, the chatbot would need additional data to enhance its existing knowledge. ChatGPT is limited in general to information before 2021, and on top of that, most co-op applications and the board’s decision on them aren’t readily available. 

Incorporating the chatbot into an existing platform like BoardPackager — an online portal for buyers to file their applications and where board managers can access them — could give the technology the boost it needs to assist on a more advanced level. Previous applications could serve as data for the development of an AI tool to assist in assembling and reviewing packages. 

Compass’ Kimberly Jay said she sees an opportunity for a tool to review a buyer’s application and offer suggestions for improvement or allow buyers to ask an accompanying chatbot questions about how to adapt their applications for the specific board. 

On the other side, AI could also verify whether a buyer has included all of the necessary information and if the materials provided meet the board’s standards, particularly for financial statements, Jay said.

But co-op boards are often hesitant to adopt new technology, Jay said. Most only started using BoardPackager during the pandemic when they weren’t able to meet in person. 

“I don’t know how quickly any of this could be implemented,” Jay said. “It would have to be a pretty tech-savvy board to do this.”

But with artificial intelligence leading the process on both the buyer and the board side, Peters said it may change the nature, and potentially the necessity, of the applications altogether. 

“What happens with the co-op board is not going to change the world, but it certainly is going to be a way in which the whole notion of personal letters, of learning about people is going to be implicated,” Peters said. “At the point where AI is involved both in putting the package together and reviewing the package, what’s the point of the package?”

As AI becomes increasingly prevalent, Peters voiced concerns about what he considers a more diminished role for brokers in the home buying process. 

“If people can find a property on their own, if an AI helper can organize their financial statements and write their co-op board letters — I still think there will be a role for people who do what I do, but it will probably be substantially reduced,” Peters said. 

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But others said AI tools like ChatGPT are not advanced enough, and will likely not be in the future, to replace brokers or considerably lessen their involvement in transactions. 

“I do great board packages, but I’ve never led with that as being an added value to my buyers,” Jay said. “Purchasing a property for most people is the largest purchase they’ve ever made, and having an expert’s opinion and knowledge and saving time is quite valuable.”