At NAR’s mid-year conference, real estate professionals were urged to adopt AI now, even though it’s unclear who will be responsible if something goes wrong.
Important points:
- President Trump’s science and technology adviser said AI will narrow the “asymmetric knowledge” advantage agents have over consumers, but also presents opportunities.
- Real estate professionals need to embrace AI innovation, but regulation and risk management remain key concerns.
- One speaker noted that real estate agents are “on the front lines responsible for complying with state and local laws,” adding that the laws remain unclear.
WASHINGTON, DC — The real estate industry thrives on the expertise that professionals provide to consumers, individuals who typically buy and sell a home only a few times in their lives and are unfamiliar with negotiations and contracts.
But over the next few years, artificial intelligence could “dramatically” reduce the benefits of that “asymmetric knowledge”, especially as consumers become accustomed to using AI in home sales, according to President Donald Trump’s science and technology adviser.
“I think it’s going to dramatically increase the amount of knowledge and information that customers have on both sides of a transaction. I see that as a potential opportunity,” Michael Kratsios said at the Regulatory Issues Forum at the National Association of Realtors Midterm Conference on June 15.
“There are amazing tools that can be created to give customers the information they need to trade in a smart way,” Kratsios predicted, and those in the industry who can provide those tools will be the most successful.
AI gives agents “superpowers” to compete at a higher level
Kratsios pointed to data from fintech firm Ramp showing that companies spending the most on AI are more than doubling their revenue, while those spending the least are seeing stagnant growth. This is another form of the “K-shaped economy” seen in the real estate industry, where some industries and population segments are thriving while others are in decline.
“Over time, this is actually not good for the company. But what this shows is that we want to be on the top side of K,” Kratsios said, stressing that busy real estate professionals should focus on AI implementation.
“If you want to grow your business and actually compete with the big players, AI will give you superpowers you never imagined,” Kratsios said.
He acknowledged that there is a set of universal tools that any business can use to improve efficiency, but they are not “plug-and-play” and that companies “need to test and see what’s working and what’s not, fix it, and then scale it up a little bit more.”
Balancing act between innovation and regulation
Forum panelists emphasized the need for a balance between innovation and risk management in the real estate sector, noting that there are approximately 1,800 legislative proposals related to AI regulation across the United States, most of them at the state level.
Kratsios said the Trump administration is “pushing ahead with a national AI framework” to foster innovation.
“For example, if you’re a young entrepreneur and you create a great AI-powered tool for your real estate business, and you have to get approval to make sure it complies with 50 state laws, that’s a huge barrier,” he said.
Kratsios said regulation is needed to prevent cyber hackers from gaining access to banks and national security agencies, but there is also “vigorous competition” in AI abroad, threatening America’s dominance in the field.
“We want the whole world to take advantage of American AI,” he said. “That’s the most important part for us. We need to win the global recruitment competition.”
Are agents and intermediaries liable when something goes wrong?
Travis Hall, director of state engagement at the nonprofit Center for Democracy & Technology, said the current state of AI regulation is murky, meaning there is no clear accountability for the use or misuse of AI tools.
“You are on the front lines responsible for complying with state and local laws,” he told the real estate professionals in the audience.
“But these tools are missing a layer of testing and accountability. The problem with artificial intelligence is that it obfuscates. It obfuscates how decisions are made based on what information. It obfuscates responsibility. When things go wrong, who is ultimately responsible?”
Hall noted that many of the AI regulations being considered seek to clarify, adding that other laws already apply to real estate, such as those focused on civil rights and consumer protection, but it is unclear how they will interact with AI tools.
And that’s what lawmakers are working on, Hall said.
“When actual harm occurs, how do we ensure transparency with the people who are using these systems and those who are being used to do so, and how do we ensure that if something goes wrong, accountability is held where it should be held?”
