"The first wave of proptech made agents more efficient. That was the pitch, and honestly, it delivered. Agents can pull comps faster, manage their pipeline with less friction and follow up with leads they would have dropped in 2010. The backend of a real estate business is meaningfully better than it was. But here's the thing about efficiency gains that stay inside the brokerage: They don't automatically reach the consumer."
"When a law firm adopts document automation software, the client doesn't automatically get a lower bill. The efficiency gets absorbed, it funds growth or it pays for the next tool. The transaction price stays wherever the market will bear. Real estate followed the same pattern. The tools got better. The workflows got faster. The underlying deal structure, who gets paid, how much and for what, mostly stayed put."
"Real disruption is when the economics of a transaction change in a way consumers actually feel. Thin"
Real estate has experienced multiple technological waves—digital MLS, listing portals, transaction management platforms—yet the fundamental cost structure remains largely unchanged. Commission percentages and closing costs persist despite efficiency improvements. While early proptech successfully made agents more efficient, these gains stayed within brokerages rather than benefiting consumers. Similar to law firms using document automation without lowering client bills, real estate efficiency gains fund internal growth or new tools instead of reducing transaction prices. AI is currently being deployed into this same unchanged incentive structure. Without a forcing function that alters the underlying economics of transactions, AI will follow the identical pattern: improving backend operations while leaving consumer costs and deal structures untouched.
#ai-in-real-estate #proptech-disruption #incentive-structures #consumer-economics #transaction-costs
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