This Mammoth Real Estate Q&A appears in the Easter weekend 2025 issue of The Sheet.
Q: We are relatively new Mammoth property owners and readers of your blog. We found your column from 2 year ago regrading AI and found it entertaining. But AI has progressed quite a bit since then and the new real estate buyers agency rules have changed things too. How do you see the two intersecting in the future?
A: That was a fun column to write because the future of AI, and how it will affect the real estate business (and everything else), is part of the modern life dilemma. The evolution of AI hasn’t radically changed the real estate business yet but it is certainly creeping in. The new buyer representation model hasn’t significantly altered the business either, and that is another “not yet.” For the future it is a little brain wracking to ponder what the possibilities are, and will be.
Over the decades the real estate industry has had all sorts of sub-industries offering ancillary services and products to agents and brokers. Some of it just gimmickry. Most offerings have come and gone, but the ideas are indicative of the trends in the industry, or at least where some of the “visionary” people think it is going. Today, I get several emails a day offering some sort of new AI related service our product that I am going to “need” to build and expand my business. They include AI assistants and transaction coordinators, AI copywriters and marketing experts, AI video and drone for properties, and much more. My newsletter software company even thinks its new AI assistant can write my newsletters. And so far there are no offers for AI escrow officers or property inspectors, but I’m sure somebody thinks that is a possibility in the future.
Personally, I’ve moved to Grok as my favorite AI tool. For fun, I ask Grok about aspects of Mammoth real estate and the answers are actually pretty good. The answers are far better than an agent with less than five years experience in the market could provide. I “Grok” myself from time-to-time with specific questions or aspects of Mammoth real estate. The responses are incredibly true to form (I originally feared checking on myself with AI—in this modern time I was afraid my age and ethnicity might bring an unfavorable response). But Grok, or any other AI, can only go so far in responding to inquiries, although it should only get better over time. For potential buyers of Mammoth real estate, it can provide a wealth of starter information.
With this increasing amount of information available to real estate shoppers, there is clearly less need for them to interact with members of the real estate community. Or at least that is what many people think. And these technological advances are accelerating at the same that the industry has been forced into the new “buyer representation” model. The decades old and “confusing” sub agency structure of the past (via listing agreements) didn’t meet the modern legal test. So now we have a new, separate seller agency and buyer agency structure. These changes have occurred since August of last year. Today, potential buyers, regardless of their level of seriousness, now have to be contractually tied to an agent (a buyer representation agreement) in order to tour listed properties with an agent.
All of this has happened during a slowing of market activity. The full impact of these new regulations is yet to be known, and it is clearly an evolving situation. So far in the Mammoth market, the financial structure of compensation paid in real estate transactions is similar to what it was in the past. Sellers appear to be willing to offer credits to the buyer at the close of escrow so that the buyer can compensate their agents. And as in the past, it is all done through escrow. From my perspective, and maybe I’m too optimistic, I believe the new arrangement has put a greater onus on the buyer’s agent to perform at a higher level. If this is one of the end results of this new process, then this is a good thing. And again, so far the buyers aren’t resisting the new arrangements—they want the representation, the expertise, and the performance.
(Interestingly, it appears that one of the anticipated byproducts of this new buyer representation arrangement may also be coming to fruition—the large volume of arbitrary “looky-loo” activity has greatly diminished. Buyers now have to engage with an agent and have a stronger commitment prior to just being shown a property at the drop of a hat. Previously, this was common activity in the Mammoth market, especially in the internet age. But this appears to be on a steep decline. It could also be driven by the current market conditions, and it might be too early to tell.)
Over time the industry can anticipate an increasing number of buyers who will try to represent themselves and “save” the credit/compensation amount from the sellers. Various online comment sections are full of buyers who think they can locate the best property, negotiate the terms and conditions of the sale, have their attorney draft the purchase agreement, complete all of the appropriate due diligence, and close the transaction on time to the satisfaction of the seller (and the listing agent). All in a potentially competitive environment. And this is assuming the seller is willing to play along.
The good news for these buyers is that Grok can help draft the offer, albeit not on the standardized form that the local brokers use. And it might not be important to the seller if the buyer is not represented by an agent. And some of these buyers think that they don’t even need an attorney to produce the purchase agreement—they can just open an escrow and they will handle all the details. Conceptually, all of this is quite plausible. It’s no wonder the market hasn’t always functioned this way. /s
One of the most fascinating aspects of these evolving market conditions is the actual timing of the events. Stay with me here. The post Covid real estate era was like no other. There is an economic law “If something cannot go on forever, it will stop.” The sales frenzy couldn’t go on forever, especially with higher mortgage rates. Those crazed market conditions eventually created a question about the value of buyer’s agent in the transaction. It was perceived by some that “they weren’t doing anything” (far from it). But those days are over, the demand has changed. The market is still on the tighter side, and the buyer’s agent role today is as important as ever.
Meanwhile, the industry has been forced into the new buyer’s representation model that we have today. All while AI is evolving rapidly. The confluence of these factors is where we are today. Sellers who list their property for sale are obviously interested in selling. Their motivations can vary wildly (and that is one thing a buyer’s agent should want to figure out). Today, sellers need their properties to be more accurately priced, and buyers and their offers need greater scrutiny. Sellers need good representation in this market. They also need to be dealing with buyers who are being representing well. They don’t need to be dealing with buyers who are “winging it” on their own. Listing agents (the seller’s agent) are especially wary of dealing with a less than qualified/competent buyer and/or buyer’s agent. Sometimes that alone can make-or-break the potential for a transaction. No need to “ask for trouble.”
The problem is that AI will empower more buyers to think they can represent themselves to make a better deal. And years from now, it may be true. And eventually sellers may be in the same position (good luck relying on Zestimates). Someday the whole process may be done without any human interaction. Probably not in our lifetimes, but in the future buyers are likely to persist in trying to represent themselves. Maybe. The interesting question is; how much will it cost them?
How much will it cost them? Real estate transactions aren’t a precise thing, especially with all of the personalities involved. In a more balanced real estate market buyers might simply be over paying for the property by not knowing the true comparable sales or market conditions. It can be very nuanced. “Appraised values” are opinions too. Or they might be over paying by missing some critical flaw in the property that an appraiser will ignore, or eventually will be proven during ownership or at resale. Or post-inspection there might be a worthy negotiation for a credit, or the inverse, an indignant buyer could get hung-up on an unreasonable credit request (that could kill the deal). The possibilities are rather endless. And many times these issues only become evident through having conversations, question and answer, between the parties including the buyer, the agents or others. Operating in isolation can be perilous. Of course, a buyer can always get the right answers from Grok.
Over the decades I always thought that my most important concern in communicating with a potential buyer was to keep them from doing something stupid, especially like buying the wrong property to begin with. And I’m sure I lost business because of it, but I like to sleep at night. Will AI keep them from doing so?
For now, I’ll still be arguing for the value of buyers using highly knowledgeable and experienced agents and brokers. And I’ll be recommending to sellers that they should look to be dealing with buyers who are represented similarly (although there are likely to be temptations in the future to take advantage of buyers trying to represent themselves).
Ironically, age, retirement and simple “moving on” is reducing the numbers of active agents with high levels of knowledge and experience. The AI world really needs to capture all of that invaluable information for future reference. How this happens is yet to be seen. Maybe the Grok people (or their buddies at Neuralink) have an idea.
Happy Easter!