Every few months, a new age of AI products rolls into realty. Much better noting copy. Smarter lead scoring. Predictive analytics. Virtual staging. The demos are excellent. The guarantees are bigger. And yet, the process probably felt basically the same as it did 15 years earlier.
That’s not a coincidence, and it’s not a technology issue.
I have actually been in this market long enough to watch multiple waves of “disturbance” crash and decline. The MLS went digital. Listing websites commoditized property search. Deal management platforms changed manila folders. Each step forward was genuine. And yet the expense structure below all of it barely moved. Commissions settled around the same portions. Closing expenses kept stacking up. The customer experience remained stubbornly complicated.
When I hear people state AI is finally going to alter all of that, I do not question the technology. I question the incentive structure it’s being deployed into.
The very first wave of proptech made representatives more efficient. That was the pitch, and honestly, it provided. Agents can pull compensations faster, manage their pipeline with less friction and follow up with leads they would have dropped in 2010. The backend of a property business is meaningfully much better than it was.
However here’s the thing about effectiveness gains that remain inside the brokerage: They do not automatically reach the consumer. When a law office adopts document automation software application, the client doesn’t immediately get a lower costs. The effectiveness gets taken in, it moneys development or it spends for the next tool. The deal cost remains wherever the market will bear.
Property followed the very same pattern. The tools got better. The workflows got quicker. The hidden offer structure, who gets paid, just how much and for what, primarily sat tight. AI is being layered onto that same structure today and absent some other requiring function, it’ll follow the exact same course.
What interruption in fact implies
Real interruption is when the economics of a deal modification in a manner customers in fact feel. Think of what occurred to equip trading. Or take a trip booking. And even how individuals purchase insurance coverage now versus twenty years earlier. The technology mattered, however the disruption was the repricing. The minute someone stated: This used to cost $200 and now it costs nothing.
Property hasn’t had that moment yet. I ‘d argue the reason is that the innovation financial investment has actually been heavily concentrated on the supply side, on making agents and brokerages operate much better, instead of on making the worth exchange in between those professionals and the consumer more transparent or more fairly priced.
There’s nothing negative about stating that. It makes sense. Representatives and brokerages are the consumers of most proptech companies. You build for who’s paying. But it does suggest that a great deal of the “disturbance” of the last decade was really performance optimization dressed up in startup language. The customer was downstream.
The NAR settlement changed the question
The commission lawsuits and the resulting NAR settlement are significant not since they immediately repriced the market, however because they forced a conversation that the market had managed to prevent for a long time: what are buyers actually paying for, and do they get to choose?
For the very first time in a very long time, the deal economics are honestly in question. Buyer broker agreements are now basic. Payment has to be negotiated, revealed and validated. That’s not a little thing. For a market that built a great deal of its convenience on ambient, unexamined costs, it’s a meaningful fracture in the structure.
The companies that flourish in that environment will not be the ones with the best AI-generated listing descriptions. They’ll be the ones with a clear, defensible answer to the question: why does this cost what it costs?
The real disruption is a different company design
I’m not arguing against AI. I utilize it. It’s genuinely helpful. However I think the industry is making a mistake by treating it as the main plot line when the real story has to do with economics.
The next real disruptor in real estate will probably not have the best designs or the most sophisticated automation. It will have a transaction structure that consumers can comprehend, a fee design they feel is reasonable and adequate transparency that they don’t spend half the procedure wondering what they’re really paying for. That company will look less like an innovation business and more like a business that deals with the customer as the customer.
That sounds obvious when you state it out loud. However the history of this industry is a history of complexity collecting, not simplifying. Every brand-new service, every brand-new tool, every new layer of coordination tends to add to the expense and confusion instead of replace something that was currently there.
The companies and professionals who figure out subtraction, who can do the very same job with less friction, less overhead and a charge structure they can defend in plain English, those are the ones who will appear like disruptors 5 years from now.
The innovation will follow
None of this is an argument for ignoring AI. If anything, the tools offered today are remarkable. The ability to manufacture market data, automate recurring workflow and give consumers real-time clarity on what their alternatives in fact are, that’s really effective.
But technology has actually always followed incentives, not led them. When the economics of a transaction change, when someone has a real factor to reduce cost and a design that rewards doing it, the tools get deployed in an entirely different way. They stop having to do with agent performance and start having to do with customer worth.
We’re at the start of that shift. The legal landscape is forcing the question. Consumers are more skeptical than they utilized to be. Affordability pressure is making every line product on a closing disclosure feel individual.
The interruption is coming. It just will not appear like a product launch. It’ll appear like a business that got truthful about what it was selling.
Blake O’Shaughnessy is a realty broker turned co-founder of Ownli.
This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners.
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