AI has the potential to transform the home-buying process, although the risk of bias necessitates human involvement, according to new research from global real estate advisor, CBRE.
As part of its new AI series, CBRE explores the ways AI will revolutionise the home-buying process, the value it offers to buyers, sellers and agents, and the risks that come with this evolving technology.
On average it takes around 15 weeks to complete a house purchase, however it can take significantly longer and often up to six months, reflecting the range of conveyancing and mortgage processes needed, which are time consuming and administratively cumbersome.
Generative AI tools have the potential to automate and streamline these processes, CBRE’s research reveals. It has a broad range of applications, from producing legal documents and reviewing property contracts to identifying any issues or missing information. It could summarise lengthy email chains, making it easier for buyers, sellers, and solicitors to stay up to date. AI can also predict and flag any potential upcoming delays in the process.
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Shifting this administrative burden onto an AI tool can free up solicitors to spend their time on more high-value activities, which could make the overall home-buying process faster, easier, cheaper and less stressful for all parties. Speeding up the process could also protect buyers and sellers against time wasters, gazumping, and gazundering.
The use of AI is not limited to the home-buying process. It could also be used to find the perfect home by providing curated property recommendations to prospective buyers. AI can be used to speed up the process of trawling online property portals. Buyers can search for their ideal home using conversational phrases rather than using manual search filters. The information is then quickly retrieved, and AI can undertake any due diligence checks such as EPC ratings.
While AI has the potential to streamline and transform the home buying process, there are some limitations to its use. AI models can amplify bias or produce ‘hallucinations’, where AI presents false information as fact. Without fixing the underlying biases, AI can perpetuate inequality, potentially leading to mortgage approvals being unfairly declined. Should AI become more widely integrated into the mortgage approval and conveyancing process, mitigating bias must be a priority. Humans still have an important role to play in approving and justifying AI decision-making.
Jennet Siebrits, CBRE’s Head of UK Research, said: “Buying a home can be one of the most stressful life events, in part due to the time taken for the process to complete, leaving buyers and sellers vulnerable to gazumping and gazundering. Using AI can speed up the home buying process, by processing information more quickly and efficiently. If widely adopted, this could create a more dynamic and fast-moving market, improve liquidity, and ultimately save buyers, lenders and solicitors time and stress. However, it is integral that efficiency is not traded for accuracy and fairness, and that lenders or lawyers using AI can justify their decisions in a transparent way.”
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Brian Lavery, CBRE NI’s Managing Director, said: “In the property industry it will be foolhardy to ignore the changes that AI will bring. It is more important to ensure that it improves the systems in speed and accuracy rather than simply replacing human input. At CBRE NI, we pride ourselves on staying at the forefront of digital technology and are continually looking at how we can integrate cutting-edge AI solutions into our operations for the benefit of clients across a range of sectors.”
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