In the last two months Michael Marks has turned down a dozen offers to make keynote speeches at conferences. His company, construction startup Katerra, is three years old, but the attention surge is very recent. "Construction technology has gotten kinda buzzy," he says. But more likely, interest in Katerra has spiked because in January, the company landed an astounding $867 million in venture funding led by the SoftBank Vision Fund. A deal of that size, led by the venture industry's most talked-about fund, will put a company on the map overnight.
Leading South African law firm, Webber Wentzel, has announced it has chosen legal AI company Luminance to provide doc review services for M&A transactions. This is the latest in a series of client wins for the UK-based AI company, which last week also announced it had partnered with Sweden's Delphi and also Luxembourg's Arendt & Medernach. In the latter case the Benelux firm will be making use of Luminance's new real estate document review capacity. Until recently the company had been focused on M&A due diligence work. In a statement Webber Wentzel said it'particularly values the platform's built-in collaboration tools which will allow its lawyers to quickly group and assign documents, track live progress, and significantly reduce the amount of time spent organising workflow'.
Rather than being fearful of AI replacing human jobs, companies are starting to embrace automation for a more intelligent way of working and providing the highest level of client satisfaction. Below we will explore the different ways in which smart technology has already been or is on its way to being implemented within the property industry. Problems within rented buildings are a constant source of complaint and burden, to which the human element of a property manager also contributes. Things don't always go wrong between the working hours of 9–6, and waiting for something to get fixed till the next working day may be a problem of the past. Companies such as UK-based Pi Labs are already implementing an AI messaging platform called AskPorter to help residents in apartments have issues within their buildings or inquiries they may have solved quickly and efficiently.
A new technology-driven real estate firm is launching in Denver this month with plans to crack the traditional real estate brokerage industry's thick walls in a way no other startup has ever managed. REX Real Estate Exchange, based in Woodland Hills, Calif., will roll out the large siege engines of artificial intelligence, big-data analytics, targeted social media marketing and even robots in its push to lower commissions on home sales to 2 percent from the current rate of 5 to 6 percent. REX plans to break through the brokerage industry's defenses by recruiting the people most likely to sell or buy a home before they ever reach an agent. Effectively, it seeks to create its own marketplace. "We can predict who will be the buyer for your home.
Title this, Real Estate Agent: What Job Not to Seek as a Career. That's because artificial intelligence is steadily creeping into the sector, replacing humans with machines that allow buyers a faster, cheaper and -- some would argue -- stress-free way of finding that perfect home. Look at this excerpt from a story on AI and the real estate sector, from CNBC: "Instead of hiring a real estate agent, Ron and Marilyn Hougardy essentially recruited a computer to sell their four-bedroom home in Thousand Oaks, California." In so doing, they saved about 4 percent in commission payments. Now, anyone entering the market can do the same.
REX is one in a number of alternative tech-driven real estate brokerages that charges lower fees and diminishes the role of the real estate agent. That has put downward pressure on agent commissions across the industry. However, the brokerage said it still employs a team of 22 agents across offices in New York, Austin, Denver and Southern California. Once a buyer or seller agrees to work with REX, a staff member meets with them and serves as guidance during the process, Ryan said. A REX staffer will also show up at open houses, sometimes bringing along a robot.
With over $4B in funding, WeWork is expanding aggressively at home and abroad and pursuing diverse investments that have raised eyebrows. But its real-estate-as-a-service offering and trove of data on optimal office design could make the company's value prop far more than a marketing ploy. WeWork is a real estate company valued like a tech company. At least, that's the rap on WeWork from critics who think it can't support its $20B valuation in private markets. Backed by Japanese tech and telecom giant SoftBank Group, WeWork specializes in rent arbitrage -- leasing and developing properties at one price, then turning around and renting them out at much higher prices. Its recent run-up in funding -- raising some $4B in 2017 alone -- has given the company the firepower to expand quickly without worrying too much about fundamentals. Companies traded in public markets that follow the same business model trade at much lower sales multiples than WeWork. Detractors say WeWork has earned its valuation by putting hipster touches on formerly drab spaces and positioning itself as a startup incubator, then charging sky-high rent. On top of that, critics point to WeWork's investments in seeming distractions -- like its upcoming WeGrow elementary school and a wave pool company -- as more examples of a tech company with overreaching ambitions. But WeWork's recent shift to safer real estate commitments and its emphasis on longer-term renters and enterprise clients suggest the company could have legs. WeWork claims it's amassing a trove of data on ideal office locations and layouts, and using software to determine everything from ideal desk layout to optimal conference room size. The company is leveraging this data not only to improve its own locations, but also to become an outsourced facilities manager, at a time when big enterprises are trying to shed real estate management from their portfolios.
Finding success is all about embracing the change to come -- and that's never been more relevant in real estate. Our industry is evolving in so many exciting ways with greater access to data and technologies that allow us to do our jobs better by cultivating leads, pinpointing pricing and, ultimately, helping clients achieve their real estate goals. It's a necessary, symbiotic relationship, one that can change quickly with each new innovation. Real estate agents are certainly professionals who love shiny new things, but we also understand the importance of utility and use that as a means of vetting the many tools and technologies that could be integrated into our day-to-day operations. The majority don't make the cut.
Intelligent Mortgage Loan Approvals Imagine technology that pulls third-party data to verify applicant's identity, determines whether the bank can offer pre-approval on the basis of a partial application, estimates property value, creates document files for title validation and flood certificate searches, determines loan terms on the basis on risk scoring, develops a strategy to improve conversation, provides real-time text and voice support via chatbot. Imagine software that calculates mortgage risk based on wide range of loan-level characteristics at origination (credit score, loan-to-value ratio, product type and features), as well as a number of variables describing loan performance (e.g., number of times delinquent in past year), several time-varying factors that describe the economic conditions a borrower faces, including both local variables such as housing prices, average incomes, and foreclosure rates at the zip code level, as well as national-level variables such as mortgage rates. When uncharacteristic transactions occur, an alert is generated indicating the possibility of fraud. Credit Risk Management Imagine software that allows for more accurate, instant credit decisions by analyzing news and business networks. This system can also be used to improve Early Warning Systems (EWS) and to provide mitigation recommendations.