Can AI cut the US$170 billion cost of buying and selling homes?

In 2024, Americans spent approximately US$170 billion on real estate commissions and other costs associated with transferring ownership of homes, representing roughly 0.6 percent of US GDP. This figure encompasses costs like agent commissions, title insurance, taxes, and other expenses linked to transferring ownership. While AI is unlikely to eliminate all these expenses, it has the potential to significantly reduce the human work required in property transactions.

A real estate agent's services are multifaceted. For buyers, agents search for properties, filter them, explain neighborhoods, organize viewings, study comparable sales, advise on price, assist with offers, support negotiations, and keep transactions moving. For sellers, agents value properties, prepare listings, write marketing material, handle inquiries, organize viewings, advise on offers, and coordinate sales through closing.

Historically, hiring agents was necessary due to the difficulty and time-consuming nature of performing these tasks individually. However, AI can now search thousands of listings, compare previous transactions, prepare marketing material, summarize contracts, organize appointments, identify unusual clauses, and answer routine questions swiftly.

This doesn't mean agents will become obsolete; rather, their role may evolve as people continue to use them while buying fewer services from them.

The industry's revenue could still grow without losing customers. Sellers might pay a lower fee for a smaller package, using AI to check the agent's valuation or prepare marketing material. Buyers could use AI to find properties and compare prices, then bring in an agent mainly for negotiation and closing. In 2026, 23 percent of recent sellers reported using an AI chatbot during the sale, with 51 percent using it to check the agent's proposed price and 43 percent using it to question the agent's advice.

Search methods may also change, with AI enabling buyers to ask for specific property criteria at once. Zillow, Redfin, and Realtor.com are already implementing conversational search tools.

While AI could make the multiple listing service (MLS) less valuable due to its outdated search interface, it may remain important as the trusted source of actual listings. Mortgage lending and appraisals also present opportunities for AI to streamline processes. Loan production costs are currently high, but AI tools like Rocket's are increasing loan officer efficiency.

Similarly, Fannie Mae's allowance for alternative appraisals can save costs in certain cases. However, these technologies may not replace the need for human expertise in certain situations, such as unusual properties or physical defects.