How a 5-decade brokerage leader thinks about AI in real estate 

J. Lennox Scott, chairman and CEO of John L. Scott Real Estate, takes pride in staying ahead of the curve in understanding how new technology can support real estate professionals.

Scott, who has been leading the family-owned brokerage for five decades, noted that his firm was an early adopter of both the internet and IDX. More recently, the brokerage has focused on helping agents pack what Scott refers to as their "AI suitcase."

One thing that hasn't changed, however, is John L. Scott Real Estate's mission. "Our value proposition is consultation, representation and negotiation," Scott said during a recent appearance on the National Association of Realtors' Change Agents podcast. "We need to up our skills in all three of those because the information is everywhere at the nanosecond."

Prioritizing the database: About 80% of the homesellers the brokerage's agents work with have a connection to "the people we already know," Scott said. That's why his firm encourages agents to be "present on a continual basis throughout the year with each individual within their database."

"The foundation of our business? Nothing has changed since the internet world, the mobile technology world, all the apps," Scott said. "Just the speed of information has changed, and access to it. But the core of our business remains being that trusted advisor for our individual clients."

What agents should have in their 'AI suitcase': Each summer, Scott embarks on a tour to speak with his firm's broker associates. The "biggest item" he's focusing on this summer is teaching them to "pack your AI suitcase."

"In that suitcase, you're going to put your relationship database," he said. "They should engage with their database with happy home anniversary, for annual home valuation — some real estate items that people really want."

This isn't "salesy," he clarified, but "valuable information" for potential sellers to have. "It keeps you present," he added. "We asked our broker associates who got a referral recently, and their hands went up. And I said, 'When's the last time you talked to that person before they sent you the referral?' Eighty percent of the time, it's within the last three weeks."

How to get noticed by AI: Scott is also teaching his firm's agents about AI broker branding. "AI needs to be able to pick up something about you. You can't just have nothing; otherwise, AI doesn't know who you are. You're invisible," he said.

"Just like out in the world, we need to talk to people. AI needs some content to pick up," he added. His firm's agents have their own websites, he explained, and are instructed to include an "About Me" page, videos and testimonials. "That's what AI picks up."

How to mold the next great agent: The key to success as a new agent, according to Scott, is "competency and confidence."

At John L. Scott Real Estate, new agents are told to practice seller marketing presentations — complete with a CMA, listing agreement and disclosure forms — three times before delivering it before a client. They're also encouraged to find a mentor and to complete a 90-day business development program.

"Our research showed if they can't make a listing presentation, they don't feel good about themselves — and if they don't, they won't have a database, they won't do an open house; or if they do one a month, they'll never follow up with anybody," Scott said.

Turning inertia into FOMO: "We believe in 100% seller representation and 100% buyer representation. That means, for sellers, getting full exposure to get the best price for the property," Scott said when asked about the industry's ongoing debate over private listings and the future of the MLS.

"We already have in place all the items that are being touted for doing private listings," which include by appointment only and delayed showing options, he said. "Our concept is, build inertia and then flip it into FOMO [fear of missing out], because you have the backlog of buyers — they're all ready when the house is ready."

Private listings are fine when used for a small fraction of sellers, he added. But he's heard that 90% of private listings end up in the MLS, meaning this process is causing "dispersed buyer energy."

"You're basically already at first price reduction when it enters the MLS because they already know it didn't sell."

Fair housing 'under attack'? For buyers, Scott suggested private listings "could be a real step backwards for fair housing."

"It's almost like fair housing is under attack," he said. "Whether it's intentional or unintentional, it doesn't matter. People don't have full access to all the properties."

"We have one of the best systems in the world through our multiple listing services, and it was by choice — we chose to belong to the MLS. And it turned out to be the right system for all sellers and all buyers to market homes or to find a home."