The Future of Real Estate Auctions: Balancing Tech & Human Expertise
In the past few years, technological advancements in the real estate industry have given rise to new methods of conducting auctions. Not only have online platforms become more popular, but virtual bidding systems, online auctions, and other advancements are transforming how real estate transactions are conducted.
Artificial Intelligence (AI) is also becoming an increasingly vital tool in real estate auctions. It’s hard to say exactly what role AI and these other tools will play in the future of real estate, but we can look to the future and the past to get a better idea of what to expect in the coming years.
Zillow’s AI Fiasco
In 2019, Zillow launched a new feature called “Zestimate,” which aimed to provide more accurate property valuations using machine learning and AI algorithms.
However, Zillow’s AI algorithm failed to account for many crucial factors that influence property value, like the condition of the property, renovations, and other unique features. In some cases, Zestimate valuations were off by as much as 50% or more, causing outrage among homeowners and real estate agents alike.
Zillow was eventually hit with a class-action lawsuit, alleging that the company’s AI algorithm violated Illinois state law by providing inaccurate valuations. The case was eventually settled for $130 million, making it one of the largest settlements in the history of AI-related litigation.
AI in the Real Estate Auction Industry
The Zillow case highlights how important human oversight is in AI-driven decision-making. While AI can be a powerful tool, it’s far from perfect, and human input is still necessary to ensure accuracy and fairness.
We believe human expertise in the real estate industry is likely to remain a highly valued service for many years to come. However, it’s also clear that AI will have an important role to play in the industry.
One use case we see specifically for the auction industry is AI-assisted property qualification. Some companies are already leveraging AI chatbots to ask you questions about your property. Your answers provide the auction house with helpful information for valuing the property, and ensuring that it qualifies for auction. This is just one example of how AI can save time and effort for both the auction house and the property owner.
Other Exciting Technologies: VR, Matterport & Virtual Tours
In addition to AI, Virtual Reality (VR) is another technology that’s increasingly popular in real estate auctions. Matterport technology, for example, allows potential buyers to take virtual tours of properties from the comfort of their own homes.
This is a significant and convenient advantage for buyers who aren’t able to attend a physical auction, as they can still gain a comprehensive understanding of the property before making a bid. The integration of VR technology into real estate auctions not only enhances the buyer experience but also allows auction houses to expand their reach to a broader audience.
What the Future Holds for Real Estate Auctions
At J.P. King, we often use Matterport technology to enhance sellers’ listings and potential buyers’ visualization of some of our properties. As AI and VR evolves, we expect to see even more innovations that can transform real estate auctions for the better.
However, it’s also clear that human expertise still plays a crucial role in valuing properties, conducting auctions, and providing exceptional customer service. The future of real estate auctions will likely involve a balance between cutting-edge technology and experienced professionals who can navigate the complexities of the industry while still providing a personalized touch to clients.
At J.P. King, we’re committed to staying ahead of the curve by utilizing the latest technological advancements to enhance buyer and seller experience and make the auction process more efficient. We believe the future of real estate auctions is bright, and we’re excited to see what the future holds!
Contact us today to learn more about how we can help.