Learned machines: Is ChatGPT paving the way for a real estate revolution?
While the usefulness of ChatGPT in real estate cannot be downplayed, at present it still has significant limitations, which renders it unsuitable for many intricate tasks that only a human can do.
There has been a lot of buzz lately on the acceleration of AI (artificial intelligence) technology and one of its new iterations, ChatGPT, a chatbot developed by San Francisco-based OpenAI that uses machine-learning algorithms to understand written language and generate responses based on user inputs or chat entries.
Proponents of the AI technology and all the hype surrounding it suggest its potential utility in real estate – an industry that has traditionally been, well, traditional. For many real estate professionals, transactions are completed through elaborate human interactions – face-to-face presentations, in-person viewings and inspections, and market expertise – and using AI technology or machine learning to automate real estate professionals’ work may seem like a science fiction. But unbeknownst to many, AI technology already has many uses in real estate, including AI-powered valuation models, human-like chatbots that answer user queries, and revenue-maximization tools, to name just a few.
Given the pace this technology is evolving, it is not implausible to expect generative AI technology like ChatGPT to soon perform more meaningful work in real estate, such as generate property marketing materials by just typing a few keywords, mine data to identify sellers who are likely to sell, and launch chatbots that carry almost human-like conversations that will help shape broker–client relationships. Real estate agents in the United States, as reported by CNN, are already using ChatGPT to speed up repetitive tasks like writing property listings so they can focus on more important tasks.
But despite all its benefits, ChatGPT is not without limitations. Since it is trained on online data to generate replies to user prompts, its responses are limited with what it can only find online (its knowledge cutoff is 2021). There have also been reports of inaccuracies. Others have also pointed out that ChatGPT has the capability to share personal information, which could violate privacy laws; run the risk of violating copyrighted materials; and can potentially generate fake news or misleading content – the latter could have serious ramifications.
For a number of basic tasks, however, ChatGPT holds some promise. Here are a couple of examples when we tested the chatbot to generate real estate-related content. Makati Commerce Tower Makati Commerce Tower is a skyscraper located in Makati City, Philippines. It is a Class A office building that offers premium office spaces for lease. The building features modern and efficient office spaces, as well as a range of amenities for its tenants, including meeting rooms, a café, and a fitness center. It is conveniently located near the central business district of Makati and is easily accessible via major roads and public transportation. With its prime location, top-notch facilities, and first-class services, Makati Commerce Tower is a popular choice for businesses looking to establish a presence in the Philippines. At first glance, the content generated by ChatGPT for this building may seem impressive, but if you look closer you will see that it is fairly generic and lacks the details that may make this building more interesting to potential tenants. For instance, it was unable to say exactly how far it is from “the central business district of Makati” and “major roads and public transportation.” A person familiar with the project, for example, will be able to write that the Makati Commerce Tower is “approximately 30 minutes or 7 kilometers from Terminal 3 of the Ninoy Aquino International Airport via Skyway and 3.7 kilometers or 20 minutes from the Ayala Station of MRT-3 via Ayala Avenue.”
There are also interesting bits of information about the building’s location itself that ChatGPT has failed to mention – such as it being situated in San Antonio, a gentrifying Makati neighborhood that is now teeming restaurants and shops.
We then asked the chatbot to write a property listing description for a condo unit in Bonifacio Global City. Two-bedroom condo in The Suites, Bonifacio Global City, Taguig This luxurious two-bedroom condo in The Suites Bonifacio Global City Taguig is the epitome of modern city living. With its spacious and elegantly designed interiors, the home boasts an open-plan living and dining area with floor-to-ceiling windows that provide an abundance of natural light. The gourmet kitchen is equipped with top-of-the-line appliances and ample counter space for your culinary needs. The bedrooms are both comfortably sized and feature luxurious en-suite bathrooms. Enjoy stunning views of the city from the private balcony. The building offers a range of amenities including a fitness center, pool, and 24-hour security. Located in the heart of Taguig, this condo is surrounded by the city's best dining, shopping, and entertainment options. Experience the finest urban living in this beautiful two-bedroom condo in The Suites Bonifacio Global City Taguig. Again this description written by ChatGPT is fairly generic, although it was able to capture some of the condo project’s main selling points (e.g., open-plan living and dining area, floor-to-ceiling windows). However, details more specific to this unit understandably was not captured (e.g., orientation, furnishing, level). This again is something that can only be provided by a human who has seen the property first-hand. So what do all these mean to real estate professionals? Some may say that ChatGPT is a “total game changer” when it comes to marketing and prospecting as it has the potential to speed up content generation for marketing collaterals and, hence, provide more time to be devoted on meeting clients and assisting them during property inspections.
Although the platform has been demonstrated to be useful, it is definitely not perfect. There have been reports that ChatGPT’s popularity means it regularly reaches full capacity, resulting in frequent down time. The program was also trained with writing responses from the Internet up to 2021, so some information is outdated (and some might not be available at all). In the United States, Realtors are also guided by NAR’s code of ethics that prohibits the exaggeration or misrepresentation of pertinent facts – another potential issue that might arise with the use of ChatGPT.
And there are certainly areas that ChatGPT’s usefulness might be very limited, such as contracts and memoranda. Real estate professionals tailor-fit contracts according to the preferences and requirements of the parties involved, which vary greatly from deal to deal. In commercial real estate, a successful deal is the mutual understanding between a landlord and a tenant, and this requires remarkable negotiating skills and expertise on the part of the office-leasing professional – something that any machine-learning algorithm, ChatGPT or otherwise, will as of yet be hard-pressed to do. Hence, the perception that it has the potential to replace human workers is unlikely at the moment. What it can help real estate professionals with, however, is perform routine and repetitive tasks, which after all is what AI technology is best used at.