AI is shrinking the knowledge gap between agents, consumers 

WASHINGTON, D.C. — The real estate industry thrives on the expertise its practitioners offer to consumers — individuals who typically buy and sell homes only a couple of times in their lives and aren't well-versed in negotiations and contracts. 

But over the next few years, artificial intelligence will potentially shrink that "asymmetric knowledge" advantage "dramatically," according to President Donald Trump's science and technology advisor, especially as consumers become more comfortable with AI's use in home sales.

"I think on both sides of the transaction, you're going to see a dramatic uplift in the amount of knowledge and information that the customers are having, and I would see that as a potential opportunity," Michael Kratsios told attendees at the Regulatory Issues Forum at the National Association of Realtors midyear conference on June 15.

"There's incredible tools that can be created to provide the customers with the information that they need in order to make that transaction in a smart way" — and those in the industry who can provide those tools will be the most successful, Kratsios predicted.

AI gives agents 'superpowers' to compete at a higher level 

Kratsios pointed to data from fintech firm Ramp showing that the businesses spending the most on AI are more than doubling their revenue, while those spending the least are experiencing stagnant growth — another form of the "K-shaped economy" also seen in real estate, where one industry or population segment is thriving while others fall behind.

"Over time, this is actually not good for the economy, but what it does show is that you want to be on the top side of that K," Kratsios said, stressing that busy real estate professionals should focus on AI adoption.

"If you want to grow your business and actually compete with large players, AI can provide you superpowers you never thought imaginable," Kratsios said.

There are a set of universal tools that can be used across any business to improve efficiency, he noted, though he acknowledged that they aren't "plug and play," and businesses should "test, see what's working, see what's not, fix it, and then expand the army a little more."

A balancing act between innovation and regulation

Forum panelists emphasized the need for a balance between innovation and risk management in real estate, noting that across the U.S., there are about 1800 legislative proposals related to AI regulation, most of them at the state level.

Kratsios said the Trump administration is "pushing for a national AI framework" to spur innovation.

"If you're a young entrepreneur and you create a great AI-powered tool for a real estate business, for example, and then have to go get it approved to make sure it complies with 50 states' laws, that's a real barrier," he said.

Regulations are needed to prevent cyberhackers from accessing banks or the national security apparatus, Kratsios said, but there is also "vibrant competition" in AI outside of the country that threatens the U.S.'s superiority in the field.

"We want the whole world to be on American AI," he said. "That's the most important part for us: we need to win that adoption race globally."

Are agents, brokerages responsible 'when things go wrong'?

The current state of AI regulation is murky, meaning that it's not clear who is accountable for the use or misuse of AI tools, according to Travis Hall, director for state engagement at the nonprofit Center for Democracy & Technology.

"You are on the front lines of being responsible for complying with state and local laws," he told the audience of real estate professionals.

"But there is a layer of testing and responsibility for these tools that is missing. The problem with artificial intelligence is that it obfuscates. It obfuscates how decisions are made based on which information. It obfuscates responsibility — who is ultimately responsible when things go wrong?" 

Many of the AI regulations under consideration aim to provide clarity, Hall noted, adding that other laws — such as those focused on civil rights and consumer protections — already apply to real estate, but how they interact with AI tools is unclear.

And that's what lawmakers are grappling with, Hall said.

"When we have actual harm that happens, how do we make sure that these systems are transparent to the people who are using them, to the people upon whom they are being used, and how do we ensure that when something goes wrong, responsibility falls where it should?"