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Category: NAR Settlement

The Limits of AI in Real Estate: Why Buyers and Sellers Still Need an Experienced Team

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Artificial intelligence is everywhere right now — drafting contracts, answering questions, analyzing data, even “explaining” legal documents in seconds. It’s no surprise that buyers and sellers are starting to wonder:

Do I really need a lawyer or a full real estate team if AI can just tell me the answer?

The short answer: AI can be helpful — but it has real limits. And in real estate, those limits can be expensive.

AI Is a Tool. It Is Not Judgment.

AI excels at pulling together general information:

  • Explaining common contract clauses
  • Summarizing inspection reports
  • Flagging typical timelines or steps in a transaction

What AI cannot reliably do is apply judgment — the kind that comes from handling hundreds (or thousands) of real deals, across different municipalities, personalities, and risk profiles. AI cannot provide legal advice for your specific circumstances, nor can it replace an experienced agent’s input.

Real estate transactions are not plug-and-play. They are deeply contextual:

  • Local custom matters
  • Municipal rules matter
  • The people involved matter

AI does not know when something that looks “standard” is actually a red flag.

Real Estate Is Local — AI Is General

AI pulls from broad datasets. Real estate law and practice are intensely local.

A clause that is routine in one county can be problematic in another. A practice that works fine in one transaction can be disastrous in a slightly different scenario.

An experienced real estate attorney or agent knows:

  • Which issues routinely derail deals in your area
  • Which risks are theoretical versus real
  • When a small change now avoids a major problem later

AI can’t sit across the table from a local lender, municipal official, or opposing counsel and say, “I’ve seen this before — here’s how it actually plays out.”

AI Doesn’t Bear the Risk — You Do

One of the most important differences is this:

AI has no accountability.

If an AI-generated answer turns out to be wrong:

  • You can’t sue it
  • It doesn’t carry malpractice insurance
  • It doesn’t fix the problem

Your real estate team does.

Experienced professionals:

  • Stand behind their advice
  • Carry professional responsibility
  • Are invested in the outcome of your transaction

That accountability matters when you are involved in one of life’s largest personal transaction. six or seven figures are on the line.

Contracts Don’t Fail on the Obvious Issues

Most real estate problems don’t arise from the obvious, headline issues. They come from:

  • Timing misalignments
  • Ambiguous language
  • Unspoken assumptions
  • Unusual property history
  • Personality conflicts that escalate

AI is very good at answering the question you ask.
It is not good at identifying the question you didn’t realize you needed to ask.

That’s where experience shows up.

The Real Risk: False Confidence

Perhaps the biggest danger of relying too heavily on AI is false confidence.

AI answers are often:

  • Polished
  • Confident
  • Definitive-sounding

But real estate law is full of:

  • “It depends”
  • Exceptions
  • Strategic choices, not just correct answers

An experienced real estate team knows when certainty is an illusion — and when slowing down or pushing back is the smartest move.

The Best Use of AI in Real Estate

AI can be valuable when used correctly:

  • As a starting point for questions
  • To help clients understand terminology
  • To organize information

But it works best alongside an experienced real estate team — not instead of one.

Think of AI as a calculator. Helpful? Absolutely.
But you still want an expert who knows what to calculate — and why.

Bottom Line

AI is changing real estate, and that’s not a bad thing. But buying or selling property is still a legal, financial, and emotional transaction where judgment, experience, and accountability matter.

The smartest buyers and sellers don’t choose between AI or professionals.
They use AI with a trusted real estate team who knows how to see what the technology can’t.

The NAR Settlement – Another Perspective

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There is a lot of available information explaining the recent NAR settlement effecting the residential home buying process. Many of the explanations have been offered by brokerages, social media from those in the industry, and state or local realtor estate associations. I found the explanation offered by Tanya Monestier a contract Law Professor from Buffalo, New York, or in other words, someone without “skin in the game,” to be a neutral explanation providing good advice. As with anything these days, there is a lot of information available, as well as misinformation. It’s quite simple actually…you simply need to understand what you are signing and negotiate the best deal that works for you. As always, Bergmann Law is here to help with your real estate questions.

Click to access monestier-sellers-guide.pdf

The Worst-Case Scenario Squad

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Here at Bergmann Law when a client asks us a question, we play the truth teller. So which question is the most common and probably the most difficult to answer?

What is the worst-case scenario?

It’s our job to know the worst-case scenario and clients who call us with business or property problems are ready for the difficult conversation as we go through all of the possible outcomes, including the dreaded ones.

However, for a client who is at a high point in their life or career it can be much more difficult. For instance, having to explain to a Buyer who has found their dream home with the perfect kitchen that they should really investigate the water issues in the basement before they purchase can be an uphill battle.

But perhaps the most important area, and often most difficult, is in estate matters. The most common answer we get when we ask a client if they have estate documents whether they are a Buyer purchasing a home, someone starting a business, or even a parent with young kids is: “no, I don’t need them, my family knows what I want.”

That’s when we know we need to be the worst-case scenario squad to someone who is only thinking about the best of life.

For most of our clients the worst-case scenario is the event just before the question “did they have a will?” or “do you have a medical power of attorney?” But in reality, the worst-case scenario only gets worse when the answer is “no.”

First, even if you are young and have only a few assets, basic estate documents are especially important if you and your partner are not married or if you’d prefer a sibling to make decisions rather than a parent etc. Official documents are required for the person of your choice to be considered your next of kin to get information and to make healthcare decisions on your behalf. It doesn’t matter if you’ve been with your partner for a decade and only speak to your mom on her birthday, the state and the doctors will select your mother as next of kin.

Second, if you do have assets and financial responsibilities, even if your family knows what you want and only intends to follow your wishes, they still have to deal with logistical realities that will be made far simpler if you execute estate documents. Those documents show the state, your banks, your landlord, your business partner, your wishes. If you leave your family with no formal will documents, they will have a more complicated estate process to deal with even as they proceed with what you told them in an email or over dinner years ago and estate documents give your family the power needed to do what you have asked.

In spite of the confidence you may have in your family to know what you want, the reality we see most often is families who disagree over their understanding of what you want. We don’t imagine many families sit around the dinner table on Thanksgiving clarifying all aspects of when a ventilator should be turned off or why your bank savings should go to your nephew because you want your niece to get your jewelry. This is especially true in situations of a surprise death or injury that no one in the family could have predicted. Having these documents gives everyone clear direction rather than leaving families to guess what treatments you would have approved or who should get your favorite necklace. We always assure clients these documents relieve pressure and responsibility rather than adding to it during a difficult time. We understand it’s difficult to have to live in the worst-case scenario world, even for a little while, but even if you don’t feel it’s worth it for you, it will help your family and friends. 

So, while we know it’s the last thing on many of our clients’ minds, the worst-case scenario squad is here when you need us. Give us a call.