Real Estate at a Crossroads

by Gregory Charlop

  Michael Lam: Why would you want to use a chatbot? Most agents will not hire an assistant. That's an overhead cost that most agents will not want to pay, especially if they're starting out. Scheduling an appointment or creating a CMA (comparative market analysis report) is pretty routine. It doesn't take too much to do that. To generate a comparative market analysis, for example, all you need is the address. You plug the address into your system, and it will produce it. A lot of the quick CMAs allow that. Those are great opportunities to have a system to automate, and a chatbot is a prime use for that. You can have a lead capture chatbot that offers a CMA. A product we offer at Kaydoh is called TextCMA.

  Gregory Charlop: Could the chatbot do other things like make appointments to meet the real estate agent or answer some questions? Real estate is a competitive market, and the first to meet with a prospect will have the best chance of converting that prospect into a client.

  Michael Lam: Absolutely, you made a great point because that's actually one of the statistics from NAR. The first person to meet a lead generally wins. Prospects usually only interview one agent. So, using a chatbot to deliver quick information to the prospects is paramount. With a CMA, which is a traditional way of lead capturing on a website, prospects put in their address, and then they wait—up to 24 hours—to get a report back through email. And then there is generally no follow up. That person is a lead that the agent should be aware of and immediately speak with that individual. You can use a chatbot to generate the report and deliver it directly to the person via SMS. That's actually one of the products that I built at Kaydoh to provide that instantaneous lead. The minute a prospect shows interest in creating a report, the salesperson will get a notification from their chatbot saying, "Hey you got a lead." You have the address and the number, make that call! It's your lead to lose at that moment.

  Gregory Charlop: Chatbots allow the real estate agent to respond quickly to a potential lead like you just described, and they let the real estate agent be in more than one place at a time. In other words, the chatbot might be making an appointment with one potential client, while at the same time doing a CMA for another prospect or answering some questions—all while the real estate agent might be driving their kids to school.

  Michael Lam: A great thing about a chatbot is it’s an extension of the agent. It's conversational rather than robotic. The conversation has emojis in it. It’s designed to be more natural. Just like you and I would message each other on a messaging app, the chatbot does something very similar, but it captures information while having a conversation. You could have thousands of people speaking to a chatbot, so you, as a salesperson, do not need to take that initial call. The chatbot can handle that initial interaction, including the prequalification, an automated alert, and scheduling. These are not the income-producing stages. They are in the early stages and are generally done by script, meaning it's going to be routine. Without a chatbot, you, as an agent, would have to say the same thing over and over. While you're doing that routine stuff, you're taking time away from your existing clients, hosting an open house, or speaking with a potential buyer.

  Gregory Charlop: Will the client realize they are talking to a machine, or will they think they're talking to a person? If they believe they are talking to a machine, will that bother them?

  Michael Lam: Studies have shown that 50 percent of people surveyed are more than willing to speak with a chatbot as long as you don't try to trick them. Some chatbot developers are missing the mark when they try to trick people. Look, humans are very intelligent. We are not at a technical level to be able to create chatbots that are truly human-like where people can't tell the difference between a human and a bot. So don't try to present a chatbot as human. As long as you're honest with people and tell them, "Hey, I'm a chatbot. I am Jerry's virtual assistant. How can I help you?" They will be more than inclined to continue the conversation. The younger generation doesn't pick up the phone to talk, they would rather message. Even if it's not a human, they would rather text message someone to get an immediate response. That's more valuable. If you're able to provide a solution or quickly deliver some results, it really doesn't matter if it's a bot or not.

  Gregory Charlop: It sounds like a great tool to reach out to Millennials and younger buyers because they don't want to talk on the phone. They want an immediate response by text or by typing something on their computers.

  Michael Lam: That's absolutely right. And to take this drive even further, look at your phone and my phone. If I look at my phone, I see how many missed emails I have. I'm going to be honest. I have 12,600 unread emails. If I look at my messaging, I have zero. Even on LinkedIn, I have zero. As a Millennial, yes, an older Millennial, I don't really call on the phone. There are a lot of studies that prove that.

  A recent study done by a Danish company found that the open rate for email was about 23 percent, and the open rate for SMS is an astonishing 98 percent! As a salesperson trying to promote business by spreading the message, sending emails the traditional way just doesn't cut it anymore. That way no longer works because you have marketers spamming the hell out of people. So people don't really look at emails anymore. But, if you send them a text message, you have a 98 percent chance someone is going to open it. Just going through that front door is very challenging right now, and if you can do it through messaging, SMS, that's huge.

  Gregory Charlop: The world has changed a lot with technology. If we want to sell to people, we can't fight this change. We have to accept it. Not only has talking on the phone become passé, but email is nearly passé as well. So, if you want to reach people you have to try new techniques.

  Michael Lam: I can tell you from my experience with chatbots in real estate, we are getting some promising results compared to email performance.

  Gregory Charlop: If real estate agents reading this book wanted to start using chatbots, how would they go about investigating this or getting it set up?

  Michael Lam: I recommend going to a vendor and having them give you the lay of the land. The vendors will help you define your scope. You might want to say, " I want lead capture." But there are many variations of lead capture, and it depends on how you want to set up your lead capture. Is it going to be on your website, on SMS, on Facebook Messenger? Generally, good vendors are honest and wouldn't charge you for the consultation. Stay away from vendors that charge you for a consultation.

  Gregory Charlop: Who typically purchases products like chatbots? Is it usually an individual real estate agent, a broker, or a real estate company?

  Michael Lam: Generally, it's real estate agents. Brokers that I've worked with try to get discounts for the entire team. So, it's both.

  Chapter 5: Emerging Technology

  Learn how artificial intelligence, Bitcoin, robots, and virtual reality will reshape real estate

  This book is all about technology. Public access to the MLS took a wrecking ball to the traditional real estate firm’s role of gatekeeper, while increased transparency—via online reviews and sales records—lifted the veil of secrecy from real estate agents.

  At the same time, technology is making life easier for real estate professionals. Facebook, review sites, and custom domains are revolutionizing advertising, while online virtual assistants are saving you time and boosting your sales.

  All this technology is here today. Use it.

  But even more technology and innovation are on the way that have the potential to completely revolutionize the industry. Learn about these products and companies now so you’re ready when they reshape the real estate marketplace of the future.

  So, strap on your virtual goggles and let’s have some fun!

  Artificial Intelligence and Natural-Language (Alexa, Google Duplex)

  Ring! A prospect calls.

  Your assistant answers with a pleasant “hello!” After some small talk about the weather, your friendly “employee” determines that the caller wants to buy a 3-bedroom townhouse near good schools. Your assistant screens
the prospect and sends them a few properties that meet their exact criteria. A few days later, your employee follows up with the prospect and confirms their meeting with you. The only thing is, your employee isn’t human. It’s your natural language artificial intelligence program!

  Computers are now able to speak nearly as well as people due to breathtaking advances in artificial intelligence. Products like Google’s Duplex, Amazon’s Alexa, and Apple’s Siri use natural language technology to hold lifelike verbal conversations. Think of these programs as chatbots on steroids!

  Natural-language processing (NLP) systems understand accents, slang, and incorrect grammar. Just like a human, they’re able to interpret meaning through context. They’re even designed to add filler words like “um” and “hummm” just like a human would. And, these tools are improving by the day. It won’t be long before conversations with these bots will feel just like talking to a person. If you’re not convinced, just YouTube “Google Duplex” and watch as a computer books a salon appointment and restaurant table reservation over the phone with unsuspecting people at the other end of the line. It’s mind-blowing!

  How can you take advantage of this technology? The possibilities are endless. It won’t be long before companies create customized versions of Amazon or Google products for real estate, just as Kaydoh and HelloAlex created customized chatbots. These new tools will engage with prospects, tell them about your services, screen them, and set up appointments. They can follow up with your contractors and remind them you need your property painted by next week and call your clients to tell them about a new listing or remind them of upcoming appointments. They could even call other agents (or their natural language bots!) to confirm a listing’s availability, ask questions, or make an offer.

  In short, natural language tools will be your virtual assistants but they’ll be less expensive and (presumably) completely trustworthy. Just as you can now ask your Alexa to turn on the lights and play your favorite tune, you’ll soon ask her to call your mortgage broker and find out when the funds will be available to close. How cool is that?

  Paperless transactions

  Remember the days when you and your clients had to FAX 50-page contracts back and forth? Inevitably, the FAX machines would jam or run out of something. Those days weren’t that long ago.

  Thankfully, we now have electronic document services like DocuSign. The back and forth is easier, faster, and much less frustrating!

  But the transformation to an automated documentation system is not yet complete. Agents still have to call around to remind folks to fill out forms and we still have multiple signings. All of these steps create work and risk scuttling the deal. The paperwork is great for printing companies and your local notary public, but bad for the rest of us.

  Now, imagine an alternate system. Agents and home buyers/sellers have an app with a dashboard which shows progress toward the goal of the sale. Each step is color-coded for the state of completion—green, red, and yellow could signify projects completed, due, and upcoming. All parties would have their own task list set to a schedule and would know what everyone else has completed.

  Even better, most tasks could be ordered directly from the app. Need an appraisal? Tap the app and it’s ordered. Time for pest inspection? Order it instantly. Need to send a contract to the sellers? Zap! It's done. Need a lawyer to review the updated contract? Send it while you’re in line for your morning soy latte. Easy!

  Real estate agents could even have their virtual and office assistants on the app. Instead of having to call to ask them to complete some task, they could instantly delegate projects to their staff.

  Best of all, the parties could legally sign documents and transfer funds right on the app. Yes, there would be some regulatory hurdles to jump, but this is already done in other regulated fields like banking and healthcare. Why not real estate?

  An app like this would slash escrow time, decrease everyone’s workload, and improve compliance and accuracy. Buying a house would be almost as simple as planning a vacation!

  Thankfully, the paperless process is coming to the mortgage industry. Rocket Mortgage by Quicken Loans,[54] for example, lets you apply online, gives you a fast answer, and closes within a month. Lenda[55] is completely paperless, answers within one business day, and can often close within 30 days.

  The future for this concept app in real estate is almost here. Redfin, eXp, Real, Opendoor, Purplebricks, and other technologically-savvy real estate companies are already working toward the goal of a frictionless transaction process. It won’t be long before we’re all using a similar system. This is one innovation we can all appreciate!

  Virtual and augmented reality

  We’re no longer bound by the laws of physical reality. As anyone who’s used Snapchat knows, we can grow huge ears, sprout mouse whiskers, and sport crazy oversized glasses out of thin air. All you need is a bit of imagination and a good augmented reality program. Scratch that, you don’t even need the imagination–the right software will do it for you!

  I predict that augmented reality (AR) will create a shockwave in real estate. And soon. Lots of great real estate AR tools are already available.

  To start, here’s how augmented reality differs from virtual reality (VR). AR is a computer-generated image superimposed on the user’s view of the world, creating a composite image of the real and synthetic. In contrast, VR is entirely computer-generated, although it can be based on real images.

  Virtual reality transports you to a completely synthesized world. It could either be fictitious or real, such as “walking through” Alcatraz from the comfort of your living room. Imagine playing a game with a headset. You’re jumping across clouds and dodging dragons trying to poke holes in your rainbow balloons. That’s virtual reality.

  It turns out that homebuyers really go for this technology. According to a survey by Coldwell Banker, 77 percent of respondents wanted to take a virtual tour before visiting a home.[56] It is just a matter of time before virtual tours are a standard part of listings.

  Augmented reality is great for virtual staging. Companies like RoOomy and Sotheby’s make a great product that allows you to virtually populate a room with furniture. The clients aren’t sure how their beloved couch would fit in a home? Take out the RoOomy app the couch into the room. No heavy lifting required! Art.com makes a fun app that virtually hangs paintings on the wall. Buyers can see what their artwork would look like in a home without lifting a hammer or a nail.

  Augmented reality is perfect for open houses and engaging potential renters. Imagine that you’re walking through a home wearing an AR headset. As you pass the stove, a little chef materializes to inform you that you’re looking at a brand-new Viking range. When you turn your head towards the staircase, an animated tour guide pops up to invite you upstairs to check out the master suite and library. How much better would that make your property tours?!

  My sense is that augmented and virtual reality will soon be critically important in selling most homes. As we discussed earlier, Redfin found that 45 percent of Millennial homebuyers in 2017 made an offer on a home sight-unseen.[57] I’m sure that number is even higher today! The buyers relied on pictures, videos, and online information. The fraction of folks willing to rely on technology rather than on an in-person tour will continue to grow as Millennials increase their dominance as homebuyers and everyone becomes more comfortable with video tour technology.

  Bridget Frey, the CTO of Redfin, is a fan of augmented reality but she urges some caution. “You can imagine when you're walking through an open house, messages pop up about new appliances or remodeling details. That can be part of your experience of touring the home. I do think that some of the technology is still a little bit early. We're just getting past the Pokemon Go craze. There's still more that needs to happen. When you're selling someone's home, the quality of the video, the photography, the augmented features have to be extraordinarily high. This is a very costly asset that people are trying to sell, and I do t
hink that the technology will have to be quite good before it becomes something standard in real estate.”

  Artificial intelligence

  We’ve covered artificial intelligence (AI) throughout this book. As the technology evolves, it will replace humans for increasingly sophisticated cognitive tasks including writing news articles and predicting future behavior. In fact, AI is already quite good at understanding human preferences - sometimes better humans are!

  Bridget Frey, the CTO of Redfin said, “One of the first features we built recommend homes to consumers. We've always had a feature on the website where you can save a search. You can say, “I'm interested in homes between 400,000-600,000 dollars with two bedrooms.” We'll send you an email that lets you know when a new home comes on the market matching that criteria. It turns out that our machine learning recommendation algorithm is actually much better than the customers themselves. The customer is four times as likely to click on a recommended home as they are on a listing that matches their saved search.

  We're actually better at producing homes clients might be interested in than they are themselves. That's incredibly exciting.” The complete interview with Frey appears here.

  Think of how good this technology will be in a couple of years...

  Robots

  Imagine this: your prospects have just walked into your rental listing in a tony part of town. They’re greeted by a robot! The cyborg invites them into the home, takes their contact information, and escorts them around the property. It points out the magnificent views, sun-drenched patio, and Sub-Zero refrigerator. They’re wowed by the home and fill out your rental application with the robot. No human required!

  Zen Place offers just such a robot. While security and user-acceptance still need to be worked out, it’s easy to see how an army of friendly tour-bots can work wonders with home showings.