When buying her new home in Bangor’s Little City neighborhood earlier this year, Sierra Rockwell turned to artificial intelligence for guidance.
While this wasn’t her first time buying a home, it was Rockwell’s first experience doing so as a self-employed hairstylist and salon owner. This made her question how to approach mortgage applications with an untraditional income, especially when she decided to turn her previous property into a rental.
So, she opened ChatGPT, a popular AI chatbot, for the first time and typed in her questions. The tool allowed her to analyze potential property expenses and understand appraisal and inspection issues before making important decisions. It even helped her find a local mortgage lender, Rockwell said.
“What I found most valuable was having access to a tool that allowed me to ask extremely specific questions, explore different scenarios, and better understand terminology and lending guidelines without feeling like I was constantly bothering my mortgage broker,” Rockwell said.
Rockwell is among a growing number of Mainers turning to AI to answer questions when buying or selling a home. The trend is one example of how new technology is helping some navigate the confusing and ever-changing real estate market, but agents warn it should be used as another resource rather than a replacement for a licensed professional.
A Bank of America Homebuyer Insights Report published earlier this year found 1 in 5 prospective buyers used AI tools or chatbots for homebuying research in the last year. The practice is most popular among Millennials and Gen Z buyers.
Of those who used it in their house hunt, buyers most often trusted it to estimate affordability, mortgage payments or closing costs, the report found. They also used AI for general education and research about the homebuying process, as well as to research neighborhoods, market trends or property values.
“In the same way Google is ubiquitous, I think AI is dominating the conversation,” said Julie Williams, owner and CEO of ERA Dawson-Bradford Co., REALTORS.
While some people have become reliant on AI to answer questions or provide guidance in all facets of their lives, others might not realize they’re using it, Williams said. For instance, some may search a topic or question on Google and not read beyond the AI overview generated at the top of the webpage.
In Rockwell’s case, she had never used resources like ChatGPT in her daily life, but heard her clients and boyfriend describe how useful it can be, she said.
AI might be most useful as a research tool in the beginning stages of the homebuying process if a prospective buyer needs complicated real estate jargon decoded, real estate agents said. AI could also explain the steps involved in buying or selling a home so a client knows what to expect, said Judy Oberg, president of the Maine Association of Realtors and an agent at Bridgton-based Oberg Real Estate.
It shouldn’t be trusted to direct essential parts of the homebuying process, such as recommending how much a buyer should offer or how much a seller should list their house for, Oberg said.
That’s because AI software likely doesn’t have access to the same information Maine real estate agents use every day to produce a comparable market analysis for clients, Williams said. The information helps buyers make competitive offers or understand what they could get for their home.
“A comparable market analysis looks at the properties that have sold recently and what’s on the market,” Williams said. “AI might help aggregate information from multiple third party platforms, but now that buyer is trying to do a comparable market analysis without having the experience and expertise that a real estate agent does.”
Additionally, real estate agents can weigh other factors that are important to their clients, such as a home’s quality, desired features, the surrounding neighborhood or its proximity to their client’s workplace or an ideal school. A chatbot likely couldn’t consider these elements in the same way a human would, Oberg said.
“It’s important to use the technological tools that we have available to us, but it’s also helpful to have a person who’s able to take you through a property, unlock that door and have you smell the cat odor,” Williams said.
Though Rockwell found AI helpful, she wouldn’t recommend using it as a substitute for a professional and cautioned that its calculations and answers need to be verified. That’s because the chatbot gave Rockwell incorrect information regarding Fannie Mae and Freddie Mac guidelines that her realtor later corrected, she said.
“AI isn’t always right — it’s a tool, not a replacement,” Oberg said. “We can ask AI how to fix our plumbing, but it can’t come fix it for us.”