5 min readIf you’re starting your homebuying journey, it’s easier than ever to enter a few prompts into an AI tool and get quick, convenient answers on everything from the best neighborhoods to the lowest mortgage rates. In fact, a recent survey found that about 20 percent of buyers are using AI for homebuying research. Realtors also say they’ve seen a recent spike in this trend.
“We’ve had buyers uploading inspection reports and asking the models, ‘What should I be concerned about?’” says Patrick A. McVeigh, sales manager at The Charles Reinhart Company. “Prospective buyers also use it at the outset to suggest a realtor in their market or to explain how the purchase process goes if they’re new to homebuying.”
However, when you’re making a decision as significant as buying a home, how much can you trust the results an AI tool gives you? In addition to the risk of AI generating inaccurate information, experts say there’s another concerning aspect of using AI for home hunting.
“It’s good to educate yourself, but sometimes it seems as if having all these questions is making buyers somewhat fearful,” says Brandon Doyle, tech expert and real estate agent with RE/MAX Results. “I’m seeing buyers who are overly cautious. I compare it to when you go on a medical website and start reading, and suddenly you think you have all the symptoms of a certain illness.”
Ahead, experts reveal how using AI can actually help homebuyers—and when you should avoid using it.
The Benefits of Using AI for House Hunting
AI tools are here to stay. And for house hunters, that’s not a bad thing because it does do some things well.
“It’s good at compiling information on crime rates, schools, and sales trends quickly,” says Doyle. “It allows you to do research on builders, agents, and areas where you’re looking.”
AI is good at providing a quick summary of processes. “It’s great for getting information in broad and general terms,” says McVeigh. “For example, it’s helpful for providing a general overview of the life cycle of homebuying, especially for the first-timer who doesn’t know what’s in store for the next 60 to 90 days.”
It can also help buyers understand terms such as “What is an easement?” or “What is escrow?” This, of course, is ideal if you’re house-hunting at 3 a.m. and can’t call an agent to ask. It can also help translate the complicated language of transactions, such as the federal regulation on lead-based paint, which sellers must disclose to buyers. “That’s a tough regulation to read, but AI can reword the statute so that you can understand it in more basic terms,” says McVeigh.
When You Should Be Careful Using AI
Of course, AI isn’t perfect. “If it’s good at general, it’s bad at the specific,” says McVeigh. “There are so many different factors that are hyper-specific and local to an area. For example, if I’ve been to a neighborhood, I can say, ‘I’ve been in 30 of these houses and know they were built 50 years ago, so you may encounter this certain issue.’ A person knows the situation in depth, but AI doesn’t.”
Obviously, AI can’t walk you through a home. “The most important part of the process is going into the house and having someone help you assess it,” says McVeigh. There are plenty of details AI won’t know about a home, from how it smells (mold, anyone?) to how light enters the home to whether you can live with that awkward layout in the kitchen.
When it comes time to make a sale, a buyer’s agent helps you focus on what matters, while AI can’t take into account the nuances of a deal. “The value of having an agent is that we have the experience of having done this before. We encounter these issues every day and know how to solve them,” says Doyle. “AI is aggressive and has to ‘win.’ But the agent says, ‘let’s get there and find an outcome that works for everyone.’”
AI is also inherently biased when it comes to pricing. “If you express an opinion one way or another, it gaslights you. Depending on how you pose the question, it may say ‘you should get a discount’ or ‘you should never give that discount,’” says Doyle. “But ultimately, the market determines the pricing, not AI.”
In addition, AI may set you up for failure when negotiating. “AI sets expectations that aren’t achievable. I recently had a buyer of a new construction home that fed the inspection report into AI, and it made pages of demands,” says Doyle. “You have to ask yourself, are you really going to walk away from a house over some trim? The risk is you scare yourself out of a home, especially if there are multiple offers and you’re making crazy demands. An agent says, ‘Let’s highlight what’s actually a concern and work through it.”
How to Use AI Effectively in Your Homebuying Search
AI has a place in the homebuying process, if you know how to harness its powers.
“The AI-empowered consumer and the AI-empowered agent are a good combination,” says Doyle. Here are tips for using it so that it doesn’t set you up with unrealistic expectations.
Use AI as a Starting Point
It’s great for broad, encyclopedic information to give you a sense of what’s ahead or to come up with lists of questions to ask an agent. But it’s no substitute for local knowledge. “The mortgage lender, title insurance and home inspectors live and operate in that community and know details AI doesn’t and when an issue needs looked into,” says McVeigh. “You can’t replicate that experience.”
Verify Everything
Sadly, AI doesn’t always deliver accurate information, and that can be because it’s crawling outdated data. “You don’t know where the information is sourced from, and it’s not always reliable if it’s coming from some listicle or a platform such as Reddit,” says Doyle.
Question Discrepancies
Use common sense, and ask if you don’t understand something. That’s especially important if you get different information from AI and an agent. It’s OK to question what information it’s feeding you, says McVeigh.
Lean on Your Agent
AI may tell you to worry about things that don’t apply, such as a building code that’s not a requirement where you live or types of inspections that may not be necessary. “AI has no accountability. Agents do this every day, so the value is we can help you sort through what matters and whether this house is a good fit for you,” says Doyle.
Avoid Focusing Only on Price
“AI distills everything to dollars and cents, and puts an emphasis on whether a house is a ‘good deal’ or a ‘bad deal.’ But that’s only one aspect of homebuying,” says McVeigh. “A purchase is also about if this is a good house for your family from an emotional standpoint, such as is this the right neighborhood and whether it fits your timetable, which sometimes matters a lot in making a purchase decision.”
Don’t Make AI Your Single Source of Information
“Don’t put all your faith into what you’re being told by AI,” says McVeigh. If you get to the ‘what should I do’ stage and you’re relying solely on AI, that’s problematic. It’s smart to use all the resources available to you, but take some of it with a grain of salt.”
