Propmodo Daily

By Franco Faraudo · Feb. 15, 2024

Greetings!

You know that feeling. You get a call from an unknown number. You don’t want to answer, but you worry it might be an emergency. You answer only to hear the dreaded pause. Next, you are being given a hard sales pitch asking if you want to sell your house. As much as we hate getting cold calls, the real estate industry hates making them. But since cold calls are such an important way to find clients, many have turned to AI to do their dirty calling for them. Today, we look at whether or not using AI is a good idea for real estate professionals.

Now, let's dig in!

AI Could Kill Cold Calling

The real estate industry has a very low barrier to entry, but it might be one of the hardest industries to break into. When relationships are the name of the game, it is hard to be the newbie who doesn’t know anyone. There are lots of ways to build a client list, but the most effective and least liked is cold calling.

Real estate agents of every property type cold call to get themselves in front of property owners. How well and how much young agents cold call can be the difference between them making a lucrative career out of real estate or burning out within the first few years. Now, to increase the number of cold calls they can make or to outsource the entire awkward ordeal altogether, brokers are turning to AI.

The recent flood of robocalls has caught the attention of the general public. Here is an excerpt from an article published yesterday in the Los Angeles Times: “AI’s subtle invasion of the real estate industry doesn’t necessarily come as a surprise because the technology has pervaded nearly every profession over the last few years. But for an industry that has long relied on human connection — handshakes, open houses, fresh flowers, and other personal touches — AI’s cold, sterile seep into housing has become unnerving for some.”

Cold calling is generally unpopular, and it's particularly disliked when automated systems or robots make the call. This approach also reduces the chances of converting someone into a client. Research into "algorithm aversion" reveals that individuals tend to trust algorithms, such as AI chatbots, more for tasks requiring cognitive skills and logical reasoning than for those needing emotional intelligence or intuition. Consequently, while people may rely on a chatbot for information gathering or finding specific items, chatbots are less effective in establishing relationships, which is a key goal for brokers.

As AI and language models improve, chatbots will become more persuasive. However, humans are also likely to become more adept at recognizing AI interactions. Consequently, the real estate sector may ultimately harm itself by deploying an army of bots for cold calling. Increasing dissatisfaction with cold calls from these bots could lead to a counterproductive outcome, where potential leads feel alienated rather than engaged.

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Propmodo Daily is written and edited by Franco Faraudo with contributions from readers like you and the Propmodo team.

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