The future is coming

Whether you like it or not, extremely smart engineers and scientists are currently ratcheting up their skills and making sure they stay on top of the best research in machine learning and #artificial intelligence.  Some of these engineers are even creating extremely useful artificially intelligent systems in 2017.

General Electric has bought in, Amazon Web Services (one of the favourite platforms for engineers and developers) has made it easier with a shippable camera that comes pre-trained with serious artificial intelligence built right in, DeepLearni.ng deploying the world’s first commercial artificial intelligence credit card collections algorithm at Scotiabank and finally Forbes forecasting that AI will increase corporate profits by 38% within 17 years (by 2035).

It’s definitely coming and it’s seriously going to disrupt the #real estate industry.

And not just in the ways that other (unsophisticated) realtors and brokerages (and pundits) are talking about, as they are really not in the know like we are (being an artificial intelligence first real estate firm ourselves). This change will not be about empowering the realtor going forward, it will be aimed at empowering the consumer to not require a realtor, or as much hand-holding as you currently require and nowhere near as much #commission.

Get ready realtors, your margins are going to fall.

What other realtors and brokerages are talking about

As a smattering of topics that others are talking about, here is a curated list of some of the “thinkers” in the real estate game and what they believe is going to happen (we do not adhere to these views, we are just presenting them so you are aware).

Robots

The real estate industry is all up in arms about robotics.  They believe that these robots are coming to revolutionize the way things are created / made and help you be more autonomous (by relying on the robots).  As you can tell from the McKinsey report (infographic) above, this really is not the case:

Below is a video of the smartest robots from 6 months ago.

https://www.youtube.com/watch?v=zeiXfiGWpIc

Now, I know many of you have seen Terminator and IRobot and think that it’s inevitable that these robots will end up doing all the things that we used to, but believe us, over the past 20 years, one of the major problems (even through my own thesis in Engineering school) was getting a robot to walk up and down the stair, or to open a door.  Look below at this fail montage of a robot trying to open a door:

What we’re saying is that making robots do, what seems like mundane human tasks, is extremely difficult and what they’re currently good at is replacing very specific tasks that are extremely repetitive.  As an example look below at the best that Amazon has to offer:

https://www.youtube.com/watch?v=lQuiWvMJbHc

And just for fun, the most advanced robots currently available anywhere:

The rest of what the real estate industry is talking about does not even take into account helping the consumer, it’s all about empowering the realtor to make better decisions, drive down cost of acquisition of clients (i.e. make it cheaper to find YOU) and to automate the tasks that they currently pay admin staff to do.

Marketing

Since realtors are some of the biggest spenders of marketing dollars, it is obvious that the majority of the “innovation” that they see coming is all part of advertising.  The advertisers themselves are constantly fighting over ad dollars and want to ensure that they themselves provide value to THEIR customers (us – the realtors).

Common themes for realtor #automation software fall into broad categories:

Lead Generation

Taking the consumer through automated processes such as this:

Lead Nurturing and Lead Scoring

Automated lead scoring systems help rank different consumers based on their wants, needs and how likely they are to become buyers and #sellers, automatically. These systems rank prospects against a scale that represents the perceived value each lead represents to the organization.

Lead scoring is based on various touch points that measure how engaged a lead is. These touch points are measured by actions taken such as: an opened email or specific links clicked within an email.

Customer Relation Management (CRM) software

A CRM is designed to mitigate communication efforts between a real estate agent and client. A CRM system helps track milestones in the sales funnel by automatically tracking every contact and follow-ups between the client and agent. It also provides realors detailed data on client’s personal information, concerns, purchasing preferences and buying history.

If you happen to work in a sales related field, you will know of these systems, the most common of which is Salesforce CRM:

What we are building

Then there’s us, we’re not overly concerned with marketing to you to prove that we are the best, or to be seen in any specific #market as the market leader.  What we aim to be is the investor’s best tool for finding, valuating and automating many of the tasks that they would need to do and then helping them get the deals past the end goal.

We will of course also do the same for consumers, however we find that many consumers need a lot more help through the process and our agents are all on-board to help you through that process.  As you can see below, we have full-service realtors ready to help you for a much, MUCH lower price than you would pay in commissions elsewhere:

Empowering the client first

According to earlier research, the difference between traditional real estate appraisals and transaction prices ranges from 10 to 15 percent. Appraisals typically take about three weeks and can cost up to $5,000 for commercial properties.

Not to mention that the above is a very inexact science that most realtors are pretty bad at (unless you have an exact match of a property that sold days or weeks ago, which is unlikely).  This is why you see almost every single realtor’s postcards, banners, advertisements, etc… promise you free home appraisals:

We’re at the tail end of building our estimation tool which will automatically scour all the listings in an area and forecast what your property will be worth, with an accuracy much, much higher than any realtor would.

Our valuation tools place every single home that we have in our database (approximately 3 million homes) and uses this data to create actual estimates of the true value of your home (taking into account everything from location, age, neighbourhood, demographics, census data and city planning). To create this valuation in those 3 million homes, our algorithms run about once a week on super powerful GPU computers, where we push several terabytes of data through a deep learning (read Artificial Intelligence) model (as opposed to our earlier efforts which were based on shallow machine learning and about 13,000 statistical models), which was, compared to what had been done previously an enormously more computationally sophisticated process.

The hidden story of achieving that is by collecting enormously more data and getting a lot more sophisticated algorithmically, which requires us to use more computers.

We never go above a city level for the deep learning algorithms, and large cities and metropolitan centers, with many transactions, we break those down into smaller areas within the city (not just neighbourhoods) where the algorithms try to find homogeneous sets of homes in the subsections to train a modeling framework.

The combination of the valuation approach and a superb classification algorightm together create a model, and there are a bunch of these models generated at that subsection of a city’s geography.

Removing the umbilical cord and need for a realtor

Another great benefit of working with us is that you will have the ability to pick and choose homes based on your exact needs and our algorithms will help tailor the experience for you (as per the below):

And we also have a mobile application coming that is going to revolutionize the way in which home owners and home buyers are shown and choose homes.  Unfortunately we are currently unwilling to show any screenshots of this as we have not yet patented the idea and fear that it may be stolen by our competition.

Expected release

We are looking to be ready to start working with clients in July 2018 and will be releasing all our services throughout the end of the year. We expect that it will take a gargantuan effort to achieve this, but we have ramped up our spending and financing considerably (on things that empower you, not our marketing efforts) in order to get us there.

Stay tuned and make sure to pop back in weekly to read more about the journey to empowering the consumer; you!