“Find me an app. I’m going to sell the back 40.”
Talk is starting to make the circuit that it’s time for automation to take over farmland wheeling and dealing, and it might not be that much of a stretch.
As long ago as 2013, which is ancient history for electronic technology, a University of Oxford study predicted an 86 per cent chance of automation replacing traditional real estate sales agents, and a 97 per cent likelihood of supplanting real estate brokers.
Artificial intelligence (AI) is becoming increasingly capable and it’s getting more widespread as it’s applied to numerous sectors and industries.
Included is real estate, according to auditing and consulting firm PricewaterhouseCoopers (PwC). “The real estate industry will not be spared,” PwC writes. “Software algorithms will increasingly adapt and evolve to more complex areas.”
AI utilization will improve the efficiency of operational tasks, and it will also revolutionize the way buyers and sellers make land decisions, PwC says.
Julia Arlt, global digital real estate leader at PwC, doesn’t believe AI will cost the jobs of real estate agents and brokers, but she does think it will change the way they do business.
It’s good news for both buyers and sellers, she says, as it’ll provide more services tailored to their needs at a lower price.
Farm Credit Canada’s senior director valuations, Hugues Laverdure, agrees. “I don’t think it can replace the broker and real estate agent, but I think artificial intelligence is here to stay.”
Laverdure explains that AI will provide real estate agents and brokers another layer of technology to help them more precisely target the types of property their clients desire.
“We can dig really deep in details with the technology available right now.”
Today, Laverdure is seeing this more often in the residential sector, but says that if and when AI is applied to farmland, buyers can seek out additional data about potential properties, like soil types, topography, crop production and yield history, water access and availability, and existence of tile drainage.
Information like that would allow a broker or agent to better target property and client.
Farmland real estate broker Tim Hammond of Hammond Realty in Biggar, Sask., loves data and thinks a tool like AI would be amazing. But he stresses that just because the data is available doesn’t guarantee buyers will accept the information and the implied advice on offers.
“You would be surprised at how many producers who currently have access to all of this information will still make an emotional decision. It is human nature,” Hammond says.
Hammond does, however, believe AI could help predict current and future price and market trends. “It will provide people with more confidence in price,” Hammond says. “We will see less variation in the range of values. This is good. People want stability and predictability.”
AI could also provide more exposure globally, and in provinces that have fewer restrictions on foreign investment in farmland, it could potentially generate more purchases.
“However, it does not matter how well a property can be researched and promoted online if the law prohibits foreign purchases,” says Hammond. “We spend too much time already telling foreigners they do not qualify under current legislation to purchase farmland in Saskatchewan.”
For years, farmland sales typically took place between neighbours. But in cases where nearby farmers aren’t interested in their neighbour’s property, AI could speed up how quickly a non-local farmer is sourced, Hammond says.
Laverdure indicates farmers are already becoming less location specific. “Right now, the buyers are looking way farther than that, they’re looking 10, 15, 20 kilometres,” he says. “They’re looking for the best piece of land that will match their needs, and they’re not afraid to go outside of their close radius.”
Farm data sharing lagging
Farm real estate is data-intense, and although the industry has improved at capturing that data, sharing it hasn’t become commonplace yet, Hammond says.
“Residential data is vastly more public and accessible, and, as a result, AI advances have been much more prominent in that industry,” he says.
Hammond believes the speed of AI advances in the farm real estate sector will be determined by how soon the data is shared. For now, owners of the individual data components in Canada seem protective, he says.
“There isn’t a lot of sharing going on yet. I believe that will change in time. The data is more public in the U.S., and I believe we will head that way,” Hammond says.
Even if AI advances in farm real estate catch up to the residential industry — or surpass it — there is likely to always be an important role for agents and brokers of farmland, says Jared Carlberg, professor of agribusiness and agricultural economics at the University of Manitoba.
He explains the value of a typical transaction is quite considerable, and he expects most buyers and sellers would want to ensure they receive good advice and service when participating in the market.
“The most serious buyers for farmland are, in my opinion, still more likely to use agents/brokers to locate parcels for sale, and certainly the most serious sellers will use agents/brokers,” says Carlberg.
Laverdure also thinks human intervention will always be required during the process. For one, there’s a level of interpretation of data and a story behind every property that only a person can deliver, he says.
AI will help select the property and help in the processing of administration duties, which will free up time for the broker and agent to focus on the needs of the client, Laverdure says.
Hammond agrees. “By helping quickly analyze the massive amount of search data that exists, technology will enable us as farmland agents to concentrate on the aspects of our profession we find most rewarding: the relational, intuitive, solution-providing and creative roles in real estate that are far beyond the capabilities of any computer,” he says. “It is enhancing our relationships and being able to bring even more value to the process.”
Hammond believes people will continue to want to work with human agents or brokers to facilitate their transactions, noting AI can help discover price and value and confidence in it, but those aren’t the only component of a transaction.
“It does not matter how sophisticated AI evolves, technology is not likely to master the very key characteristics producers seek in farmland agents, such as showing empathy, building relationships, the art of the negotiation, and storytelling,” says Hammond. “Our service is more about people than it is about farmland. I think any business tied to agriculture is.”