Buying a home is one of the biggest, most complex financial decisions most Americans will ever make. Before closing day, homebuyers will encounter many moving parts that often require a lot of brainpower and time to organize and navigate.
Enter generative AI and tools like ChatGPT.
You may already be familiar with the technology that has transformed the way people work, learn, and plan virtually everything in their lives in the past few years. Whether users are learning a new skill, creating a workout routine, or planning a summer vacation, ChatGPT is being used as a digital assistant.
Operated by AI, ChatGPT understands natural language – the way we speak and write – and can respond in real-time to “prompts” – or the requests we send it. In a nutshell, it can answer questions, summarize and write back to emails, and do research on your behalf – to name a few of its benefits. Unlike search engines like Google or Bing, which send you a list of hyperlinks, ChatGPT gives you tailored answers within its platform – all on the page. And if you’re logged in, it will remember your conversations, bookmark them for reference, and keep up with your homebuying journey.
From helping to make informed choices to crunching figures and simplifying terms, here’s a closer look at how homebuyers are using ChatGPT, and why this technology is reshaping the homebuying process in ways that are surprisingly practical – and personal.
1. Understanding the Homebuying Process
If you’re new to the homebuying process, ChatGPT is a worthy online companion.
Ask it about the homebuying process in your country, state – even neighborhood, and it’ll give you a bespoke step-by-step guide. “Prompt” it to create customized checklists – documents required, professionals you’ll need to hire, what to look for in a home inspection – and it’ll prepare these for you within seconds.
And if you’re unsure where to start, simply ask it. It’ll break down jargon, such as terms like escrow, fixed rate mortgage, or loan-to-value ratio, to explain it all in plain English.
2. Budgeting and Mortgage Planning
While banks and lenders offer mortgage calculators, you can download your financial situation to ChatGPT to help you better understand how much you can afford to spend on a home.
Talk to ChatGPT just like you would a financial advisor: “I earn this much each year, but I’m carrying this much debt, which means I’m making monthly payments of this amount. I also need to pay for daycare, my car loan, gas, groceries, and bills. How much could I be pre-approved for a mortgage?”
Once you plug in your individual details, the system will provide you with a summary and breakdown of your loan options. It’ll even compare interest rates and loan types, such as fixed versus adjustable rates.
ChatGPT can also take stock of factors such as an incoming bonus at work, expected proceeds from selling your current home, or cash saved for a down payment. It’s incredible to see it do the number-crunching in real time as you ask it to account for windfalls of cash or lender and lawyer fees.
It can also build a present-day budget to help you reach your savings and downpayment goals or poke holes in your existing budget to help you find categories to save in.
Keep in mind, ChatGPT isn’t a replacement for financial advisors or mortgage brokers. But it can definitely help you understand your financial situation before you meet with one. You can even ask it for a list of questions to ask before you meet with a financial professional.
3. Researching Neighborhoods and Local Markets
What does your dream home look like? Once again, if you aren’t sure, talk to ChatGPT.
Explain your home and work setup. Maybe you have two kids about to start grade school, a partner who works from home while you commute into the office, and you need a big backyard for your dogs. Tell ChatGPT the non-negotiables your family needs and it’ll give you a lay of the land for your options.
Based on your prompt, ChatGPT will list areas worth considering, their pros and cons, and even home in on details like safety, school quality, walkability, and commute times to work. If you prompt it, it’ll also give you a look at the latest research on housing trends and home values in the neighborhood.
If you need to take a further step back, you can even do some blue skies thinking about the kinds of architectural styles you like, upgrades you may need, and color schemes and textiles that blend seamlessly throughout the home.
4. Crafting Questions, Offers and Emails
At this point, ChatGPT will be familiar with your family’s wants, needs, and budget. It can help you pore over listings, comparing lenders’ mortgage products, and preparing questions before you meet with mortgage brokers, property inspectors, insurance providers, and real estate agents.
You could upload listing specs and ask for its summary of the property, what to ask the builder, and any lingering questions you may have about the house before a showing. You’d be surprised at how detailed its response can be, spanning HOA rules to queries about the appliances and potential warranties.
Before each appointment, it’s worth asking ChatGPT for a list of questions, then choosing which are most relevant to you so you show up prepared. It can even read through contracts to check for any concerns, loopholes, or sections that need your attention.
If writing emails doesn’t come naturally to you, you can count on it to whip up drafts, which you can tailor to make them more formal or conversational depending on your style.
5. Organizing Your Life as a Homeowner
Before move-in day, ask ChatGPT what to expect on closing, the first things you should do once you get the keys to your new home, and how to stay organized as a homeowner.
It will take all the heavy lifting off your hands. Instead of you wracking your brain about what not to forget, it will spew out an anticipated schedule for closing day, a checklist for what to do once you move in (including utilities providers and others you need to contact), and every bit of maintenance to mark onto your calendar throughout the year.
And even after your keys are in hand and you’ve settled into your new home, ChatGPT can stay helpful. Keep it as a budgeting tool to estimate costs at the start of each financial year, accounting for changes in utilities, property taxes, and mortgage refinancing.
You can also prompt it with questions on how to make your home resale-worthy and in great condition. It may suggest the latest popular home renovations or ways to improve curb appeal.
GenAI Revolutionizing the Real Estate Industry
Homebuyers aren’t the only ones finding creative ways to use ChatGPT and the latest in AI innovation.
For lenders, generative AI and machine learning are streamlining and speeding up the mortgage application process, reviewing borrower credentials, and evaluating paperwork in record times.
All in, it’s not a substitute for any of the professionals across the industry, but it is a powerful tool for organizing your thoughts, getting quick answers, and feeling more in control during your homebuying journey.
Carmen Chai
Carmen Chai is an award-winning Canadian journalist who has lived and reported from major cities such as Vancouver, Toronto, London and Paris. For NewHomeSource, Carmen covers a variety of topics, including insurance, mortgages, and more.