T
he way Americans buy homes is undergoing a significant transformation due to new industry rules governing how home buyers' real estate agents get paid. This shift has sparked debate among housing experts and tech entrepreneurs about the role of human agents versus automated systems. With record-high home prices and closing costs, many house hunters are now faced with deciding whether and how much to pay an agent.

    A 2-3% commission on the median home price could be over $10,000, prompting some entrepreneurs to see an opportunity to automate away the middleman. However, consumer advocates caution that not everything can be automated, particularly in a high-stakes transaction like buying a home.

    Tech-enabled AI upstarts are emerging, such as Flyhomes and Modern Realty, which use artificial intelligence to provide personalized home search experiences. These companies claim to offer significant benefits, including 24/7 availability and the ability to answer most questions without human intervention.

    However, some experts argue that while AI can automate many tasks, it cannot replace human expertise in areas like pricing strategy and negotiations. Modern Realty's CEO, Raffi Isanians, believes that consumers care most about having a human agent help with these critical aspects of the home-buying process.

    Eden, another young company, offers agent services "as needed," allowing buyers to pay only for the services they use. The founders predict that within five years, every aspect of the buyer agent role will be automated with AI.

    While some experts are excited about the potential for artificial intelligence to remake industries, others caution that we are currently seeing augmented intelligence, where humans and machines work together. In a high-stakes transaction like buying a home, human expertise and local knowledge remain essential.

    To avoid paying an agent, buyers may consider working with a trained housing counselor or attending a first-time homebuyer class. However, experts also warn consumers to be aware of the potential for "hallucinations" from AI models, which can offer incorrect or misleading information.