Risks and Rewards: the use of AI in real estate
Artificial intelligence is the ability of a computer to perform tasks that are commonly associated with the intellectual processes and characteristics of humans. The software has the ability to think intelligently like the human mind. For example, the software has reasoning, learning and problem-solving skills.
Recent developments in AI software mean that many platforms and software providers have moved away from just automating processes towards a generative AI model, which creates its own outputs. This has had a huge impact on property professionals, who now have a catalogue of products to choose from to undertake their work. These products have the potential to revolutionise the industry and ultimately overhaul the way we work. Property professionals who aren’t thinking about using AI risk becoming uncompetitive and being left behind.
AI can significantly speed up everyday tasks, reduce the workload of property professionals and reduce costs. It can process vast amounts of data and automate repetitive and time-consuming tasks, such as due diligence and document review, within seconds. This leads to faster transaction timetables, higher accuracy rates and cost savings.
While some professionals may be concerned about AI “replacing them”, with its help, professionals can significantly increase their output of work and their level of productivity. This allows professionals to free up their time and focus on higher-value, more engaging work and building relationships. There is an argument that reducing the need for professionals to undertake repetitive and boring work leads to higher levels of job satisfaction.
As property professionals will know, one incorrect decimal point or small typo can have catastrophic consequences. As AI relies on data-driven insights and decisions, the software mitigates the risk of errors in human judgement. AI can’t get tired or have a bad day.
However, with the new software come practical and ethical risks and considerations. The use of AI needs to be managed correctly, and professionals need to ensure that they are aware of the risks.
Artificial intelligence is the ability of a computer to perform tasks that are commonly associated with the intellectual processes and characteristics of humans. The software has the ability to think intelligently like the human mind. For example, the software has reasoning, learning and problem-solving skills.
Recent developments in AI software mean that many platforms and software providers have moved away from just automating processes towards a generative AI model, which creates its own outputs. This has had a huge impact on property professionals, who now have a catalogue of products to choose from to undertake their work. These products have the potential to revolutionise the industry and ultimately overhaul the way we work. Property professionals who aren’t thinking about using AI risk becoming uncompetitive and being left behind.
AI can significantly speed up everyday tasks, reduce the workload of property professionals and reduce costs. It can process vast amounts of data and automate repetitive and time-consuming tasks, such as due diligence and document review, within seconds. This leads to faster transaction timetables, higher accuracy rates and cost savings.
While some professionals may be concerned about AI “replacing them”, with its help, professionals can significantly increase their output of work and their level of productivity. This allows professionals to free up their time and focus on higher-value, more engaging work and building relationships. There is an argument that reducing the need for professionals to undertake repetitive and boring work leads to higher levels of job satisfaction.
As property professionals will know, one incorrect decimal point or small typo can have catastrophic consequences. As AI relies on data-driven insights and decisions, the software mitigates the risk of errors in human judgement. AI can’t get tired or have a bad day.
However, with the new software come practical and ethical risks and considerations. The use of AI needs to be managed correctly, and professionals need to ensure that they are aware of the risks.
Regulated professions
Surveyors, accountants and lawyers can all fall under regulatory bodies. Those who are regulated are required to comply with specific codes of conduct. These are a mark of quality, qualification and professionalism, and provide trust in the profession. The use of AI tools creates a conduct risk, and professionals must ensure that the use of AI tools is safe for their business, meets the needs of their clients and complies with relevant legal and regulatory obligations.
While it is important that firms keep up to date with technological advances to ensure that clients’ needs are serviced properly, proper and regular training must be given to professionals using the AI tools, and they must understand that AI can produce incorrect results.
Maintaining client confidentiality is a key aspect of professional work. Professionals need to ensure that AI software is safe and that any information shared with third-party AI tools remains confidential. For example, if a solicitor uses ChatGPT and uploads a client contract onto the platform for the software to prepare a summary, this will be swallowed by the ChatGPT system and could potentially mean that aspects of this contract will be available to other users of ChatGPT. There are options available to firms, such as using an enterprise licence which blocks data being uploaded into the AI systems. Some firms have even started to develop their own in-house tools.
Professionals must remain ultimately accountable for their work, whether the work was produced by an AI tool or by a human. It is simply not acceptable to rely on the output of AI, and all outputs must be thoroughly checked and reviewed to ensure that the advice or drafting is correct. There is a huge reputational risk where lawyers rely on AI. There is a recent US case where New York lawyer Steven A Schwartz relied on ChatGPT to undertake legal research. What he did not realise (or check) was that ChatGPT had generated several fake cases. Schwartz later cited these fake cases in a brief, which ultimately led to him being sanctioned and fined by a federal judge.
Clients should have the option to “opt-out” of AI use and have the right to request that a human does their work. The Information Commissioner’s Office has published some guidance on this, but given the fast-evolving world of AI, it is likely that this will change.
Analytical thinking
AI software is not trained to think of the worst-case scenario like the majority of humans do. AI will generally accept a task it is given and produce a response or result within the parameters of that task. What AI cannot do is draw on its personal experience of “transactions gone wrong” and tailor its advice or output to specific circumstances. This is where critical thinking, expert knowledge and human intelligence is imperative. As AI works within the parameters of what it is given, it is only as good as the request that has been inputted. There is a risk that people may rely on advice given by AI without getting this checked by a regulated professional.
Cost of software
Although there are various free versions of software, in order to keep up and ensure data security, property professionals will want to use the best products on the market, which come at a price. There is also a risk that the current products on the market could become outdated within a couple of years, or even months.
Training of juniors
The use of AI will significantly reduce the amount of low-value and time-consuming work that juniors are required to do, such as reviewing documents. This means that juniors are unlikely to get the same level of training as previously and the level of human interaction in the learning process could be diminished. This could potentially lead to stunted development or a lack of understanding and expertise.
Is AI the future?
There is a lot that AI can do for us in transactional property. The main benefits are time and cost savings but, as with the use of any technology, there are risks. While AI is certainly disrupting the industry, professionals are far from being replaced. In order to successfully use AI, professionals need to:
- be willing to consult with technology experts. There needs to be constant investment in AI to keep up with its evolution.
- ensure they are using AI tools specifically geared towards the particular type of work, rather than general tools like ChatGPT.
- use AI as a starting point, but never the finished product.
- be cautious when sharing any data and ensure tools have the proper security and data protections in place.
- ensure that responsibility and accountability remain with the professionals, not the AI tools.
- be agile. The tech is changing quickly, so early adopters will need to be willing to move on from outdated tech in favour of new and better products. Transition processes must be robust.
- ensure that juniors receive proper training and development.
However, it is important to remember that what AI cannot bring to the table is the human touch, and the output produced by AI software is only as good as the input. As all of us will know, building relationships is irreplaceable and remains an important part of our work. We must work with AI towards the exciting future of transactional real estate and be willing and open to overhaul outdated working practices.
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Examples of software
There is an abundance of products on the market. These include:
- Orbital Witness: this is a platform geared towards commercial property professionals. It has multiple functions, such as a document review function and a summary function. These tools allow the platform to summarise title documents, provide a short report on the same and provide a rating based on complexity and highlight any “red flags”. Orbital Witness can also generate a report which can be customised in a matter of seconds, identifying specific points which a client may be interested in.
- Avail: this software is a title document review platform which is geared towards helping lawyers optimise document review and drive-up efficiency and productivity. The software can prepare several types of reports, such as certificates of title, key issue reports and planning reports.
- Microsoft Co-Pilot: similar to the well-known ChatGPT, Microsoft Co‑Pilot is powered by Microsoft Azure OpenAI Service with a front-end chat interface that allows users to search for specific information, get answers to general queries and generate text (such as e-mails or drafting).
This article first appeared in EGi.
