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Since the rise of AI, many people are wondering if their professions will soon be overtaken by machines. Some are deeply concerned—just look at the strikes in Hollywood. Meanwhile, others view AI as a tool to enhance and streamline their work.
So, what’s the verdict for real estate appraisers? Instead of personally defending the importance of this profession, I posed the question to ChatGPT: why can’t it replace a human appraiser? Here are the reasons it provided and let’s see if you would agree.
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1. The Human Touch in Judgment Calls:
Real estate isn’t just bricks and mortar—it’s influenced by human emotions, intentions, and future aspirations. While an AI can provide market averages, predicting how a specific demographic might react to an office space’s aesthetics or how a newly announced community project might uplift an area’s commercial value requires an innate human touch, intuition, and foresight.
2. Local Market Knowledge:
AI can give you big data analysis, but what about the local cafe owner’s insights on foot traffic or the elderly resident’s perspective on the area’s historical significance? Local appraisers are entrenched in their communities. They have the pulse on the local culture, upcoming infrastructural changes, and community sentiments, providing a depth to their appraisals that AI can’t capture.
3. Understanding Unique Properties:
Consider an old cinema hall turned into a trendy co-working space or a historic building that holds cultural significance. These structures have stories, histories, and quirks that significantly influence their value. A human appraiser can appreciate the sentimental and heritage value and its impact on potential buyers or renters.
4. Ethical Considerations:
Ethics in real estate is paramount. While AI operates on algorithms, human appraisers operate on principles. They ensure that properties are valued fairly without biases. A human touch ensures transparency, moral responsibility, and a dedication to the highest standards of professional integrity.
5. Continuous Education and Learning:
Real estate trends evolve. From sustainability concerns to changing work culture, appraisers need to stay on top of global trends while understanding their local implications. Seminars, workshops, and courses offer insights, debates, and discussions that enrich an appraiser’s perspective, something a machine algorithm can’t achieve.
6. Building Client Relationships:
Clients need assurance, empathy, and understanding. They might have concerns they can’t articulate or reservations about a space that aren’t quantifiable. A human appraiser’s ability to connect, reassure, and offer tailored advice fosters trust and long-lasting business relationships.
7. Complex Analysis:
Commercial properties can be multifaceted. For instance, a building with both retail spaces and offices might have varied income streams, differing vacancy rates, and unique tenant considerations. Human appraisers can weave in this complexity with market insights, financial acumen, and property specifics to create a nuanced valuation.
8. Physical Property Inspections:
Walking a property isn’t just about noting dimensions or checking utilities. It’s about feeling the space, noting the natural light quality, understanding the flow of the property, and even listening to ambient noises. These subtle factors can influence usability and desirability, factors a robot might miss.
9. Objectivity and Independence:
The role of an appraiser demands unbiased valuation. Their commitment is to the accuracy and fairness of the assessment, not to any transaction outcome. This independence ensures that appraisers provide a value based solely on the property and market conditions, free from external pressures or influences. While AI can offer data-driven results, the ethical commitment of human appraisers to provide an impartial valuation based on both data and intricate market understanding remains unparalleled.
10. Legal and Regulatory Insights:
Laws are more than just statutes. They come with nuances, interpretations, and potential future amendments. A local appraiser is often attuned to the legal landscape’s shifts, from zoning law changes to new environmental regulations. They can provide insights on potential future challenges or opportunities based on the legal framework, ensuring clients are both compliant and primed for future shifts.
With this more detailed insight, the multifaceted role of human appraisers becomes abundantly clear. They’re not just about crunching numbers but understanding the rich tapestry of factors that influence real estate value.
My Thoughts on AI Replacing Appraisers
As you probably can see from the above ChatGPT’s responses, while insightful, they have their limitations. Without constantly providing it with clear directions, it often give me answers that feel too general or just filled with fluff.
Yet, when appraising a property, we can provide “hard data” like when a house was built. But think about this: two houses might be built in the same year, but if one owner took better care of their place, that makes a huge difference!
AI cannot detect when a window frame is rotten, the bad odor from the place, and loud noises from a nearby highway? AI just isn’t able to pick up on that yet.
Furthermore, even though ChatGPT learns super fast, as of when I’m writing this, it can’t pull in new info from the web, and its data set remain before September 2021. So, if there’s a new real estate law or a shiny new mall pops up near a property, it’s clueless about that.
Given all this, I just can’t see property appraisers being replaced by robots anytime soon.
I also have another post where I asked professionals from the appraisal industry the same question: Will Real Estate Appraisers be Replaced? You may click here to check it out.
Disclaimer: The information in this post is for general information only, and not intend to provide any advice. They are subjected to change without any notice, and not guaranteed to be error-free. Some of the posts on this site may contain views and opinions from individual not related to JCHQ Publishing. They do not necessarily reflect our view or position.
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