AI tools are everywhere and they have infiltrated just about every industry, real estate notwithstanding. Since A1 Foundation Crack Repair routinely saves real estate deals in the 11th hour, they have a lot of experience in the home sales process. In this episode, Adam explains how AI tools have impacted home loans and what you might do if you have a negative experience.
Narrator: It's time once again for the Crackman podcast, hosted by A1 Foundation Crack Repair. I'm Darren Kincaid, and I'm here with the crack daddy himself, Adam Tracy. Adam has 20 years of experience in the construction industry and, as a civil engineer, is A1 Foundation's resident engineer on staff, solving a plethora of unique foundation problems every day. This podcast provides expert basement waterproofing, concrete repair, and preventative maintenance tips for homeowners and businesses. A1 Foundation's valuable insight will help avert the disaster of a flooded basement, health problems of water infiltration, and protect your biggest investment, your home. The topic of today's podcast: Has an AI-generated appraisal obliterated your chances of a home loan?
Narrator: So, Adam, AI tools are everywhere, and they have infiltrated just about every industry, real estate notwithstanding. Since you guys routinely save real estate deals in the 11th hour, you have a lot of experience in the home sales process. How have AI tools impacted home loans in your experience?
Adam: Yeah, we're at the bleeding edge of AI technology coming into real estate. And what we're finding is that as we do a general search in ChatGPT or another service, it always says, you know, "May have errors, please check for verification."
And when we're seeing some of these appraisals come back, there's some photos that get AI scrubbed for issues. And again, it's a great tool. It enhances the appraiser's ability to understand if there are issues that they maybe didn't see.
However, what we're finding is that sometimes there's not appropriate levels of concern coming into some of these photos. A good example is there was a house in the Worcester area, and it was a really old home from the mid-1800s, and they had some kind of white staining on a few of the walls around the rocks.
And so, their AI-generated tool for this particular bank calls it a water infiltration issue. And they had to halt the loan process after all the paperwork had been ironed out for all the rest of this. And people had moved out, the other people were waiting to move in, and that loan process kind of halted at the 11th hour.
And what they were concerned with is water in a basement, rightfully so. The challenge is that a house that was built in 1850 is not necessarily the same kind of idea or a living space potential as a house that's built in 2020, right?
So, you have to use that little caveat that it comes, you know, "Check, AI can make mistakes," right?
And in this particular case, human intervention never happened. They ran through the process, "Hey, we have this issue. Everyone needs to get coordination, people out there to verify, find the source, is this going to be an issue in the future?"
Because they're just looking at risk, right? The bank is looking at risk. They don't want to own your home, they just want to own your loan. They have an issue with this house, they can't sell off your loan or they can't make money off the house.
So, they have this issue where they just run and they just want to push the risk everywhere else, and that's fine, and I understand why they're doing that.
But the problem is, they're trying to create a 21st-century problem into a house that was built in the 19th century.
And in this particular house, yeah, they had water stain marks on the rocks because there's minerals in the rocks, and as it sweats with humidity changes, it causes efflorescence and mineral stains. And it wasn't that they had historic water problems; it just is part of the natural structure of the home.
So, rather than understanding that, they just pushed all the panic buttons and caused this poor homeowner or new homeowner a lot of aggravation, time in a hotel, and a big delay on the sale of this particular property.
So, yeah, AI is a great tool. There's a million reasons why we want to have it in the future, but there's also a lot of things that we need to make sure that there's reasonable and sensible controls on it.
And in this particular case, there is that. And the other part of it, too, is that you have to take your information with a grain of salt, and I think that's true for all AI results, is that it is scrubbing and searching hundreds and thousands of inputs to create a summary.
And in this particular case, the summary was not age appropriate for the house, and anyone who had been doing it for a long period of time wouldn't have known that. It wasn't that piece of human interaction that kind of put a check on it.
So, what will the future hold? I don't know, but A1 Foundation Crack Repair is ready with the AI wave in the home sales process. So, if these issues do come up, let us know. We know how to navigate them, we know how to get you in that house.
Narrator: Thanks, Adam, for explaining how AI tools have impacted real estate deals and what you might do if you have a negative experience.
Narrator: If you have a basement water problem and think you need a professional, or if you'd like more information on foundation crack repair and basement waterproofing topics, please visit A1foundationcrackrepair.com or call Adam at (866) 929-3171 or you can email Adam at info@a1foundationcrackrepair.com. Thanks for listening and keep that basement dry.