“Buying a house is going to be as easy as ordering an Uber.” What does this mean for the future of property.

It happens every time.

Something comes along that promises to upend entire industries. Taken on their own, these developments are remarkable.

But taken in context, they mark the final run up to the peak of the real estate cycle.

This time, I am seeing something that could figuratively blow the world of real estate buying and selling apart. It’s built on the most important technology of the moment – artificial intelligence (AI).

Every market commentator known to man has had plenty to say over the last few years about AI. Almost no one has covered what it may mean for the land markets.

Until a seemingly innocent recent social media post.

It promises to change buying and selling a house forever.

It will harness AI to allow the average working couple to become property investors with a multi-million portfolio…. in 8 hours.

Here’s the post that begins our story.

On the face of it I can’t quite get my head around the idea that buying a house could become that easy. I have bought and sold property in the past; I can tell you I’ve never enjoyed either process.

Real estate has always been its own thing. And in practice this means it has traditionally been immune to outside changes sweeping the business world. Which has always struck me as crazy because the process of buying a house is too long, too expensive, unnecessarily complicated and, frankly, a colossal waste of time.

But because of the different layers of oversight involved, from real estate agents to solicitors and conveyancers, it is quite impossible to avoid dealing with them all.

But as the poster above went on to say, a “trust shift” appears to be imminent that will change this process.

We’ve all been through multiple such shifts in the past couple of decades.

Remember the first time you entered your credit card details into a website to buy something online. You had to trust that you were not just sending your details to someone who would then go on a shopping spree. Similarly, you had to trust that the goods you’d paid for would arrive.

But once you had done it a few times, and enough others had done so, this radical new way of doing things quickly became the norm. The same thing happened when, for example, you first called an Uber and entrusted your journey to a complete stranger.

So, what about the same thing happening in real estate?

We are arriving at that ‘trust shift’ moment in the real estate game, where we are preparing to walk away from the suite of professionals like agents, conveyancers, and valuers and turn to AI.

Here’s a quick breakdown on just how much the journey to buy a property could be revolutionized.

The idea here is to make buying (or selling) a house to rival the ease of use we have using the Uber app.

No more waiting for an agent to call you back. No waiting for an open home to inspect what it looks like and whether it suits your needs and wants. Close a deal in hours, not weeks or even months.

By applying AI in the process, you can see substantial reduction in upfront costs and the time involved. Information to help you make your decision is instant such as home value, information about the suburbs and surrounding area.

You should also be able to find and disseminate information about buyer interest and price trends as well as the type of key data usually reserved behind a paywall or available to agents.

This kind of customer-facing service is what apps like Uber have conditioned users to expect. But the level of user interface can go much further than this. Imagine now making a virtual tour of your proposed property purchase. You could use VR goggles to make an on-site inspection without leaving your couch or bed.

Businesses involved in this revolution could offer blockchain based contracts (smart contracts) which save a lot more time and money for all parties.

Even at a broad level, the entire experience seems completely removed from what we have traditionally accepted as ‘the way’ to buy and sell real estate. And these changes are already here.

ReAlpha is a NASDAQ listed digital real estate company founded by the author of the above quoted tweet, Giri Devanur. Basically, what I’ve written so far is his mission statement not just for reAlpha but for the future of the real estate industry.

In other words, this is happening now. This isn’t a pipe dream or a case of aspirational hope. This is coming to consumers today. The only question to ask is, should you rely upon these types of companies for your next real estate transaction?

As is usually the case, it’s time to apply the lens of the 18.6-year real estate cycle over this to determine the truth.

Like so many companies across the world today, there is a headlong rush to be the first to truly unlock the power of artificial intelligence over more traditional business models.

But just because you can do something doesn’t mean you should.

You might think the ability to seamlessly work out the ‘true’ value of a property via an app is helpful, but where precisely is the data coming from?

Remember the maxim: garbage in equals garbage out.

How do you know the prices aren’t manipulated? You don’t. Unless you’re prepared and able to do the analysis of comparator properties yourself in the old-fashioned way.

Then there’s the small matter of staging open homes online. Much like traditional staging prior to auction, they can make an ordinary home look like an absolute dream residence. And remove all the usual signs a well lived in home can have.

Certainly, the promise of blockchain enabled smart contracts could very well be a gamechanger, eliminating waste in terms of time and money compared to how it’s done today.

But the bottom line here is this. Speed is the key ingredient. The experience is designed to be seamless, to make you believe that by the end of the day you could own your dream home.

What it really does is function as leverage over your emotions. You know just how emotional the entire process is, particularly if it’s your first ever home. By using AI to ‘make’ you believe you can actually do this, in a few hours, you are in fact yet another example of how we will have our “all-in” moment at this late stage of the real estate cycle.

Oh, and one more thing. Not even mentioned either by the CEO or on the main page of the reAlpha website.

It’s that small detail of the banks, and the mortgage you have to get.

The entire exercise is predicated on you getting the finance available to buy. Can reAlpha guarantee the banks will agree with their AI inspired valuation? The banks will insist on their own valuers being used – what if they find issues?

Not to mention the loan you are trying to secure is the largest in 20 years. Right at the final stages of the current cycle, your margin for error is basically non-existent.

Just because you can do something doesn’t mean you should.

But I REALLY want this place, you say. This app makes things so easy for me, I feel empowered by it! If you are suggesting the risks are too great, then what should I do?

Get educated.

Become our newest Boom Bust Bulletin (BBB) member. Use our brand-new innovation of monthly video and written editions to learn about the 18.6-year Real Estate Cycle and why it continues to repeat after more than 200 years of history.

The BBB will give you the grounding needed to take your investment journey to the next level. With its guidance, you can trade and invest with the trend of the cycle, not against it.

Your mantra must be profit and protect moving forwards. Make no mistake, you have no choice but to walk the narrow line between access to credit and loans being the easiest it will be for the last 20 years, and the amount borrowed also being the largest in the same time period.

Right when the peak in land values globally is about to hit.

Apps like this will make the whole process feel so simple. It’s your ability to nail the timing for your next purchase or sale that’s key. And that’s what the BBB can help teach you.

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