Artificial Intelligence – ‘AI’ – has quickly become part of everyday life. From the apps we use to plan our journeys to the way we sort our emails, intelligent tools are becoming embedded in our routines – and the property world is no exception.
From diary management tools to chat-bots on agency websites, and even tools that are helping agents to craft compelling property descriptions, AI-based tech has slipped into agency systems and processes, largely (not always) to the benefit of agents, sellers, landlords, buyers and tenants.
But there is a worrying rise in the use of one particular type of AI tool, which could have real impacts on the market – and not for the better.
AI-assisted valuations are apparently becoming standard for many in the estate agency industry.
We’re by no means technophobes here at Petermans – we know that good estate agency nowadays means good use of technology. But this is a growing trend that we find concerning for the property market in Herne Hill (and beyond), particularly because we suspect that homeowners may be none the wiser, or worse – they may think that such ‘valuations’ are gospel themselves.
A recent survey by Alto, part of the ZPG (i.e. Zoopla) group, has revealed that almost 4 in 5 estate agents now “rely heavily” on Automated Valuation Models – or ‘AVMs’. That is an industry seemingly moving, en-masse, towards using automated systems to price what is usually someone’s most valuable asset.
The problem seems so glaringly obvious, but let’s spell it out:
AI tools don’t know your home.
They don’t understand that the garden you have invested so many hours (and fingernails) on is going to be the cherry on top for that family looking for beautiful outside space with room for their children to play. They don’t recognise the appeal of those treated original floorboards, or the functional benefit you have achieved since you opened the Kitchen into the Dining Room. They certainly don’t account for the intangible value of living near a local school that has risen from ‘Requires Improvement’ to ‘Outstanding’ over the past two Ofsted Inspections, or the excitement of living near that community-led high street since two new restaurants and a deli opened over the past couple of years.
These tools are built on algorithms and trained on data… but they are blind to nuance.
Let’s be fair and say that AI itself is not at fault here. These tools – as tools they are – are not claiming to be accurate.
They claim to be useful assistants, research aids and guides; but many agents are relying on them like some sort of valuation almanac, and the consequences are clear when there are thousands of pounds at stake.
In fact, remarkably, according to Alto’s survey almost 90% of agents say they believe AI tools are consistently undervaluing homes. And yet, 78% still say they use them as a primary guide for pricing.
It is a contradiction that speaks volumes (and screams: look out!)
Here in SE24, we’re seeing the impact of that approach on the local property market.
We have seen one or two properties hit the market locally in recent months that should have commanded so much more in our view, but were brought to market at a price that risked underselling them. Hopefully it was strategic. Hopefully those agents generated multiple bids and exceeded their lower-than-market value asking prices; but what if they did not?
When that happens, it can do more than simply knock a few thousand pounds off a seller’s price; it can also distort general buyer perception, devalue a street or a neighbourhood, and damage things for those that follow later.
It can create a ripple effect across a whole local market.
This is the danger we see if an industry turns evermore to an algorithm as a quick and easy alternative to human experience and professional judgment.
At Petermans, of course we take a different approach to property price appraisals.
Yes, naturally we make use of technology; it’s a valuable tool to have in the box.
But we approach our use of it knowing that it’s not likely to present a full picture. It is never going to replace experience and professional research.
When we carry out what the industry typically calls an ‘appraisal’, we treat it very much as a consultation. We don’t just research the market, and we don’t just look at your home in detail; we also ask questions – and most important of all, we listen to your answers. It is a holistic process, and one that we treat seriously because it becomes the foundation upon which the success of your move is built.
We look at the things that an artificially intelligent program can’t work out from checking data generated from a postcode combined with an algorithm. Rather than simply hitting a button to spawn a formulaic calculation, we look analytically and thoughtfully at the things that are going to inspire emotional responses from buyers:
Combining Research With Real Market Insight
We take these points, some tangible and some intangible, and we consider them in light of what we can determine from professional, thought out research into local sold prices, length of time properties may have languished on the market (and at what price), and of course we look at current market demand – and by that, I mean, crucially, that we apply our knowledge and understanding of what our buyers on our database are actively looking for right now.
And this is all because we’re not a faceless, inhuman brand. We’re a family-run, hands-on outfit, dedicated to our local market because we are dedicated to our family name brand and the values that represents – to us and to the local SE24 housing market.
We know who’s looking. We know what they want. We know how quickly the right home, priced properly, can fly off the market, if it is marketed properly to the right, willing and able purchasers.
We know how to position homes in a way that connects with real people; we don’t just want to tick boxes on a CRM system and let technology take care of the rest. It’s about thoughtful marketing, targeted advertising, real phone calls, real conversations, and motivated, credible viewings.
When it comes to pricing your home, AI tools can give you – or the agent you call out – a ballpark figure. But they won’t catch the little things that spark emotion in a buyer. They won’t call the person met two weeks ago who’s been searching for a home just like yours and missed out twice. And they won’t make sure the photographs, the wording, and the presentation of your home are aligned to maximise its value.
That’s our job, and that’s what great agency requires – and we take it absolutely seriously.
Of course AI is here to stay. And when used properly and wisely, with consideration and oversight, it can be a great support. But relying on it too heavily is like confusing the Sat Nav in your car with the Auto Pilot in a plane.
If you’re thinking about selling and have had a valuation that just doesn’t sit well with you, AI might just be the culprit.
Make sure the agent you talk to is backing up their advice with demonstrable research, and shows that they have both insight and property market instinct. They should radiate experience; because when it comes down to it, data can be dazzling and statistics can be startling, but usually it is a human touch that carries a sale through.
When it comes to your home, you deserve more than just an address-entry followed by the click of a button to determine its value. Those in this industry that resort to it are at genuine risk of losing the essence of what it is to be an estate agent.
We are required by law to conduct anti-money laundering checks on all those selling or buying a property. Whilst we retain responsibility for ensuring checks and any ongoing monitoring are carried out correctly, the initial checks are carried out on our behalf by Lifetime Legal who will contact you once you have agreed to instruct us in your sale or had an offer accepted on a property you wish to buy. The cost of these checks is £60 (incl. VAT), which covers the cost of obtaining relevant data and any manual checks and monitoring which might be required. This fee will need to be paid by you in advance of us publishing your property (in the case of a vendor) or issuing a memorandum of sale (in the case of a buyer), directly to Lifetime Legal, and is non-refundable. We will receive some of the fee taken by Lifetime Legal to compensate for its role in the provision of these checks.