The digital world is expanding exponentially to all sectors of the economy including the real estate industry, which was once thought to be just centred around personal advisory, newspaper listings, and brokerage window displays.
Frog portfolio company McMakler – Germany’s most well-known and fastest growing online estate agent – is leading this long-awaited digital transformation including the integration of Artificial Intelligence (AI) and all-around automation. In a guest contribution to German publication Cash.Online, McMakler CEO Felix Jahn, gave some valuable insights on the human drive of AI in the real estate market.
Jahn shared that while larger brokerage offices are already adding automation into their workflows, many traditional brokers are still evaluating properties manually.
“The question that arises here is why the task of evaluating is not performed by AI. After all, this is a task based on numbers and data. This in turn raises the question of whether AI can reliably determine the value of real estate. We believe that AI can do this.”
He noted, however, that AI would need some human support at first, especially when it comes to recognising patterns in data. “In the end, both human and machine learning produce skilled real estate appraisers – only the AI has learned from a few million more appraisals.”
Additionally, Jahn explained that AI is not able to learn its future tasks by itself and it would need the experience and work of human analysts and reviewers who have prepared the data that will be used for the AI’s training process.
“It is only possible to train complex machine learning methods such as deep neural networks if there is enough training data. However, these are also much better able to take detailed information into account and thus evaluate it more precisely. Using AI for real estate valuations does not digitize the appraisal system, it automates it,” he said.
Jahn said that is why McMakler has put together a team of seasoned and talented data scientists, analysts, and programmers. “Their cooperation is essential for the solid quality of our property valuations.”
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