Can ChatGPT kill a real estate deal?
Ryan Serhant opened a recent Instagram reel with these words:
“Okay, so a $50 million deal just died on me. And how it died is worthy of a story…”
That story illustrates the risks involved in buyers and sellers asking ChatGPT for advice regarding what is often the biggest financial transaction of their lives.
And in this case, both parties turned to AI for advice on the $50M deal.
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How ChatGPT Brought a $50M Deal to a Screeching Halt
Here’s Serhant’s breakdown of the situation:
“$50 million dollars. Very, very smart buyer. Very, very smart seller. Took a few months to get the entire transaction together…
“And at the last minute, the seller uses ChatGPT and asks it, ‘Should I sell at this price?’
“And maybe because of how he asked, or what not, ChatGPT basically told him, ‘No. You should not sell at that price. It’s worth more,’ and gave him all the comparable sales as to why, sure, it’s worth more. But without any context and without actually understanding why it is worth $50M.
“And, at the same time, the buyer went to ChatGPT and asked it, ‘Am I overpaying for this property?’ And ChatGPT said, ‘Yes,’ and gave him comparables that showed why, without context and without actually understanding the property, it is worth less than $50M.”
At this point, it seems pretty clear that, as Byron Lazine pointed out in the comments,
“ChatGPT tells you what you want to hear.”
Which is exactly what makes it so dangerous, especially to buyers and sellers.
Since both questions were asked separately by each individual, the AI gave them the answers based not just on whatever data it could surface but on what ChatGPT users typically want to receive as a reply. It’s an answer engine. Not an oracle. And definitely not an expert on the housing market (not national and definitely not local).
But with FSBO sellers turning to AI for help in selling their homes, this is something everyone needs to understand: AI can absolutely lead people to factually incorrect conclusions on the value of a property.
In the case of the most recent (and famous) AI-assisted home sale, we don’t know if the Florida home seller asked ChatGPT how much his home was worth, or if he even cared about getting top dollar for it. Speed may have mattered more.
And even he admitted his approach would not appeal to most sellers. And he doesn’t believe real estate agents are unnecessary.
Of course, that hasn’t stopped plenty of people from sharing the news with anyone in the real estate sphere, including The Broke Agent.
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That last line was delivered tongue-in-cheek. And if you missed his earlier reel explaining why, watch it here.
What Does This Mean for Agents?
So, what can real estate agents do with this information?
First, be aware that this is happening. If it can happen to Ryan Serhant, who is widely trusted as a skilled and relentlessly helpful real estate professional, it can happen to anyone.
Second, while AI cannot replace real estate agents who deliver the kind of service before, during, and after transactions that build trust and make them memorable, it could certainly replace those whose only services could easily be rendered by AI.
For those who still want to work with a human being who consistently shows up for them (I definitely number among those, and I’m guessing you do as well), AI still has a place.
That place depends on who’s using it:
- For agents, it’s a tool to free up time for the work that requires a real person.
- For buyers and sellers, it’s a tool to assist with finding homes and/or finding the right agent to assist them with a purchase or sale.
And sure, for a subset of FSBO sellers, which is likewise a small subset of total home sellers, AI can certainly assist with selling a home, as long as getting the best price isn’t priority #1.
Back to Ryan Serhant’s $50M deal, there’s still hope it can be salvaged. But in sharing the story, Serhant highlighted a case where AI can create confusion and potentially wreck a deal. He also gave agents an opportunity to share similar stories in the comments:
“I’m hopeful that I’m going to be able to fix it. And I do—this is not an anti-AI thing. Obviously, SERHANT. is real estate AI, especially for real estate sales people. But…interesting. What do you think? Has anyone been in this situation yet? Are people now starting to trust LLMs for pure monetary decision-making? Or do they just not trust themselves? Or is it just another factor in the trust circle, which is completely fine. We’ve all been using it for years. Um…thoughts?”
So, what do you think? Has this happened to you or to an agent you know? And what are you doing to help your clients avoid the pitfalls of relying too much on AI?
