The 4 Ways AI Chatbots Are Increasing ROI In Real Estate While Improving Buyer and Renter Experience
Real estate is one of the oldest industries in existence, dating all the way back to the agricultural revolution when humans said goodbye to the nomadic life and decided to stay put. But despite being an ancient sector, real estate has never stopped advancing.
Today, the real estate industry is increasingly digital, and adopting powerful new technologies has never been more critical. Why? Most people now find their homes online. Additionally, millennials, a group famous for their love of all things digital, are now the biggest homebuyers in the market, at 37%.
AI chatbots are now playing a vital role in the real estate sector, shortening the real estate sales cycle, improving buyer and renter experiences, and continually providing high ROI. With this in mind, let's look at the ways real estate chatbots are transforming the real estate industry for the better.
How Can an AI Chatbot Help Shorten the Sales Cycle in the Real Estate Industry?
Anyone who's bought a house will know that the process is often long and tiring. It can take months from finding a property online to actually getting the keys in your hands. Most of this lag is down to the unavoidable legal and financial processes baked into buying a house - nothing you can do there. However, there are many other parts of the process that are needlessly slow.
The Real Estate Sales Cycle
At its core, the goal of a real estate sales cycle is about increasing efficiency to drive more conversions. And to do this, being organized is key. From listing to deal, the sales cycle looks like this:
- Property valuation - Using a range of factors like location, similar properties, taxes, HOA (if applicable), publicly available data, and local amenities.
- The Listing - Listing the property on the real estate website with all the pertinent information about the property.
- Property viewings - At this stage, agents have attracted prospects and qualified leads. The people left are interested in buying the property and will be hyper-aware of details that could sway them either way (for or against closing the deal)
- Negotiation - In this stage, the potential buyer wants to become a buyer and the deal needs to move from 'proposal made' to 'negotiations started'. There are lots of moving parts and admin in this stage. For example, whether the buyer has passed financing approvals, whether they have agreed to the requested price, and the closing date (day of occupancy).
- Closing the sale - Paperwork and the final inspection of the property.
Of course, for renters, the cycle is a little different, but the same stages are at play. Renters still view properties online, arrange viewings, negotiate their terms (although this is less common), and complete the paperwork to finalize the tenancy agreement.
So, how can an AI chatbot help speed this process along?
AI-Backed Property Valuation
AI is increasingly being utilized in property valuation with the aim of removing guesswork and providing more accurate estimates. While at present AI-based valuation algorithms are not typically incorporated into chatbots, there's no reason they can't be, and they likely will be in the future.
Traditionally, while the valuation process does involve hard data, it's also somewhat subjective. The goal of real estate valuation is always to ascertain a fair and evidence-based value, but so many variables are involved (including human bias), that even similar properties can be valued differently.
Typical variables that impact valuation are:
- Scarcity (the number of competing properties in the area)
- Location, including access to local services or amenities like pools, shops, public transport.
- Condition and age of the property.
- Updates and upgrades to the property (new heating/cooling systems, extensions, landscaping, bathroom, and kitchen renovations).
Evidently, accurate and reliable valuations are critical for property investors and homebuyers who want to get a good deal (so, everyone). Good news - AI is now finding patterns in property data that humans miss. For example, one algorithm found that having two specialty grocery stores like Trader Joe's or Whole Foods, within a mile of the property increases house prices. However, more than four of these stores, and property prices start to decline.
With access to vast amounts of property data, real estate valuation algorithms become highly sophisticated and accurate. They could also be easily incorporated into a real estate chatbot, allowing for a user to upload some photos and provide some basic details about the property before getting an accurate valuation.
Cutting the Time Spent Searching for a Property Online
On a typical real estate website, a user uses the search function, inputting a few keywords and hitting enter. The website returns a list of properties, usually (hopefully) ranked on their relevance to the search query. While this process works well enough, it's not perfect. A user isn't going to type in every feature they're looking for in a property.
By contrast, a chatbot can connect users with highly relevant properties and discard ill-suited properties by asking a few questions. Some of these questions might be related to the type of property the potential buyer wants - for example, new-build, 4 bedrooms, fireplaces, yard.
However, the chatbot could also utilize any data it already has on the user, either from a dedicated profile or from their online activity. Information like employment status, income, marital status, age, and even hobbies, can help find more suitable listings.
Cutting the Lag Between Stages
Suppose a potential buyer finds a property they like on the website but they just remembered they want to watch that new Netflix show tonight. That thought - a new Netflix show - has interrupted their thought process and this interruption can be powerful. The user might think "I'll contact the agent about this property tomorrow". Of course, sometimes tomorrow actually means a week on Wednesday - life gets in the way. However, if a real estate chatbot pops up at that moment ready to help facilitate the next step, the user is much more likely to move to the next stage in the funnel right away.
The Role of an AI Chatbot in Real Estate
At the most basic level, the role of an AI chatbot is to reduce the workload on agents while improving the customer experience for buyers and renters.
Answering Prospects' Questions
Real estate agents are often incredibly busy, and memorizing every detail about a property can be time-consuming. As a result, if a potential buyer or renter contacts the agent with a question, the agent can't always respond straight away. Often, this question gets added to the to-do list to be answered later in the day, when the agent has time to review all the property details.
An AI chatbot doesn't have this memory or workload limitation - it can access and return any information about the property available to it.
Help With the Property Search
We covered this in the last section, so we won't spend time covering the same ground. However, it's also important to note that AI chatbots, supported by machine learning and neural networks, get even better at returning relevant results over time. Not only does the real estate chatbot learn more about a specific user and their preferences, but learns more about customer segments (what types of potential buyers are more likely to be interested in certain properties).
Solving Browsing Issues
While a lot of science goes into designing clean-looking, responsive websites, some users can still get confused. Sometimes where a web designer thinks is a logical place to put a page doesn't always translate to the end-user. AI chatbots can eliminate these pain points by conversing with users and pointing them in the right direction. Remember, when users get frustrated or confused, the bounce rate skyrockets.
Lastly, the role of AI real estate chatbots isn't to replace real estate agents but rather to support them in doing their job, helping them find more people to find their dream homes or next money-making investment.
How To Choose an AI Chatbot for Your Real Estate Company
Choosing the right conversational AI software for your real estate company comes down to weighing what you want to achieve against the options available. If you've spent any time conversing with the chatbots of old, you'll know that not all chatbots are created equal. Comparing state of the art AI adaptive communications chatbot against a pre-scripted one is like staging a race between a cheetah and a sloth. There's a clear winner between the two, and one of them manages to be creepy the entire time. (No disrespect to sloths, what they lack in cuteness they make up for with extraordinary uniqueness, but the same can't be said for antiquated chatbots).
With that in mind, here are the features you should be looking for in your real estate chatbot:
Solid Artificial Intelligence
Artificial intelligence is advancing rapidly, and today the best chatbots are indistinguishable from humans when it comes to communication. Okay, not indistinguishable; chatbots are faster. However, artificial intelligence can mean a lot of things, so it's essential to look for specific technologies that take chatbots to the next level:
- Machine learning (ML) - ML-based chatbots don't need to be constantly updated. They learn and improve as they are fed more data. In a real estate environment, this data will be conversations logs with prospects, property listings, public data, search data, website metrics, and organizational data (contact details, reports, etc.).
- Deep learning - While machine learning involves computers being able to think independently, deep learning takes it a step further. Deep learning software learns to think by using structures modeled on the human brain.
- Natural Language Processing - The ability of the chatbot to understand text or spoken human language in the same way humans do. Excellent AI chatbots should be able to handle different dialects, non-standard phrasing, and understand intent.
Robust Data Handling and Utilization
Exceptional AI chatbots should be able to:
- Harness data from a variety of sources (customer profiles, listing data, publicly available property purchase data, CRM, etc.).
- Work with unstructured data. Vast amounts of company and public data is unstructured and therefore challenging for traditional software to work with. However, if your chatbot doesn't utilize unstructured data, then it's not reaching its full potential.
A Forward-Thinking Company
With AI advancing at the rate it is, you want to source a chatbot from a company that can keep up with the pace of progress. Browse company websites and see what they're currently working on, who their partners are, whether they have won any awards, and what their mission statement says.
The Benefits of Implementing an AI Chatbot in Real Estate
Offering personalized and highly relevant experiences through an AI chatbot boosts conversions. It vastly increases the chances of connecting a potential buyer or renter with a property that matches their wants and needs and empowers them to take action in the moment. Without a chatbot, the user may not find what they're looking for and move on to a competitor's website.
AI chatbots answer client queries immediately and accurately. Chatbots are also always available; they don't need to take breaks, work in shifts, or need continual training.
Not all potential buyers or renters are equally interested in taking action. Some people simply like to browse property listings and fantasize about having a five-bedroom colonial-style mansion with a winding drive. But in reality, they can barely afford their inner-city two-bedroom apartment. Other prospects fall elsewhere on the 'interested' spectrum. For example, they might definitely intend to move house in the near future, but they're waiting for the perfect property. And others might be in a rush to move because they're starting a job in a new area.
Knowing which leads need more attention is a major challenge for real estate agents. Spending too much time on leads that aren't interested in buying is costly and a waste of resources. In other words, it results in a poor ROI for time spent. However, an AI chatbot can leverage client behavior patterns to qualify leads. The real estate chatbot will then send the most highly qualified leads through to the agent.
A More Streamlined Experience for Agents and Customers
AI chatbots can conduct the bulk of scheduling and admin activities that are typically time-consuming for both parties. For example, the chatbot can schedule property viewings, send reminders for completing forms, answer questions about the property or process, and prepare the customer for the next stage.
Common Chatbot Use Cases in Real Estate
- Lead Generation
AI chatbots automate a great deal of the sales process and drive growth even when the company has the lights off for the evening. Chatbots grab the users' attention at the right moment, engage with website visitors, answer questions, and connect them with an agent when the time is right.
- Scheduling Property Visits
AI chatbots assist in delivering all the relevant information about a property. This could include offering a 3D tour (this became very popular during the coronavirus pandemic). However, in almost every situation, the potential buyer or renter will want to view the property in person before going ahead with the sale or tenancy agreement. Contacting a busy agent and waiting for a response is often a slow process that eats into completion time.
However, with a well-integrated AI chatbot, the bot can analyze the agent's calendar and offer suitable times to the prospect.
- Answering Routine Questions
Often, the bulk of customer queries are simple questions that can be answered quickly. The answer to these questions is also often on the FAQ section of the website or in the property listing itself. However, sometimes we miss little details when we skim read a listing. Additionally, much to the disappointment of website designers and marketing teams, not everyone is savvy enough to check the FAQ page.
Luckily, chatbots are excellent at answering routine questions and are frequently used this way in the real estate industry.
- Connecting Users With Highly Relevant and Personalized Listings
This is a use case that is growing rapidly in popularity, and with one good reason. AI technology is now strong enough to truly provide excellent results to prospects. In the past, real estate chatbots couldn't do much more than the search function on the website. Essentially, they could use keywords to find listings.
However, AI real estate chatbots use far more than keywords. They not only use a vast range of available data, some from non-traditional sources (unstructured data, environmental reports, almost anything!), but they also can recognize buyer intent. AI chatbots can understand the difference between the words a user types and what they actually want.
Real estate chatbots backed by the latest groundbreaking AI technology promise to usher in a new era of prosperity for real estate agents. Supported by AI chatbots, real estate agents can save time on repetitive, mundane tasks, boost ROI, and only speak to prospects once they become highly qualified leads.