AI may draw on unreliable sources or simply seem a little “weird,” but the technology has also been quite relevant for some entrepreneurs. In fact, famous real estate agent Ryan Serhant said during Fortune’s Brainstorm Tech conference that ChatGPT almost lost his company a $50 million deal.
When asked by Fortune Term Sheet Editor Allie Garfinkle about what happens when AI goes wrong, Serhant, founder and CEO of the real estate company that bears his name, Serhant, recalled a time when he was selling a penthouse in New York.
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It was the type of luxury property that is notoriously difficult to price because it is impossible to find comparisons. After what Serhant described as a “troublesome” negotiation — which he compared to a duel between “kings of the world”, with buyer and seller wanting to win at any cost — the deal was closed at exactly US$50 million. Then, at the last minute, it almost fell apart.
That’s because the buyer, according to Serhant, went to ChatGPT and typed something like: “I’m thinking about buying this; is $50 million too expensive?” The chatbot replied yes.
The buyer’s broker then called Serhant to back out of the deal because the AI had said the property wasn’t worth that price. Unsurprisingly, Serhant’s reaction was quite direct: he told the broker that it was “stupid” and “stupid”.
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Serhant recalled telling the buyer’s broker, “Your client is extremely smart and wealthy, aren’t you using the data?” And he said, “I don’t know what to tell you, man. A superintelligence just told him, ‘Don’t do it, it’s not worth it.'”
So Serhant had to convey the bad news to his client, who did what “anyone would do in that situation” and also turned to ChatGPT.
The customer asked ChatGPT the opposite question: “I have a buyer who no longer wants to pay [US$ 50 milhões] because you told him not to. Is $50 million not enough?” And ChatGPT responded: “You know what? You’re right, it’s not much.”
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To save the business, the solution was not to use more AI. It was to turn to traditional research, such as “context and data from non-market negotiations that LLMs [grandes modelos de linguagem, na sigla em inglês] they can’t collect it,” Serhant said.
He also published a video about the episode on social media, which he said racked up 3 million views in about three hours. Both clients saw the video, returned to the negotiating table and the deal was completed.
AI models “know the history of the internet, but they don’t know the path ahead, nor do they know what the internet, Reddit, Zillow and Realtor.com don’t know,” Serhant said. “We completed the deal and now I can tell this story as a success, not a failure.”
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This story is part of a broader debate he has been waging publicly for some time about whether AI augments the work of real estate agents or replaces them.
The controversy has been gaining steam for a few years, with an award-winning professor telling Fortune in March 2024 that real estate agents are becoming more like travel agents.
“If you think about what a broker does for you, I think it’s very different than what they did in the past because there’s so much more information available on the internet today,” Andrew C. Spieler, professor emeritus of business and finance at Hofstra University, told Fortune.
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Just like travel agents, real estate agents were once the “guardians” of information. They had access to listings from a system of brokers that consumers couldn’t find on their own, so buyers were much more dependent on their brokers to even start looking for a home. But, according to him, today this information is much more accessible.
As expected, real estate agents disagree. Serhant, for example, said brokers are even more important for wealthier clients because they want someone to tell them what to do, they want someone to lean on, and if something goes wrong, someone to blame. According to him, AI cannot assume this role.
“People hate people trying to sell them something,” Serhant said. “But they love shopping with friends.”
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