AI can speed up real estate transactions — But it can’t replace the work of a real estate professional
Artificial intelligence is transforming almost every corner of the real estate industry. Real estate professionals are using AI tools to streamline workflows, improve document processing and improve compliance processes.
The article industry is no different. Title companies across the country are investing heavily in automation, analytics and digital tools to make transactions more efficient. This technology helps the industry manage growing regulatory requirements, detect fraud patterns and process large amounts of property data.
But as discussions about AI in real estate gather pace, it’s important not to overlook a basic fact: technology it can help the title process, but it cannot take the place of expertise that ensures that property ownership is clear and secure.
A new study conducted by American Land Title Association offers a closer look at what really goes on behind the scenes before a real estate sale closes. Research, conducted by ndp | statistics, title experts have been tested across the country for the work required to produce a clean and reliable title for insurance.
The results show how complex that process can be.
More than 80% of purchase transactions require the review of at least 11 documents related to the property’s ownership history, and more than one in five require the review of more than 50 records. Those records can include deeds, mortgages, tax liens, lawsuits, settlements and court decisions – often spanning decades of property history.
Getting those documents is only the first step. Subject matter experts must analyze records, identify potential errors and resolve issues before the property is transferred.
In fact, research has found that about 60% of transactions need to clear three to five title issues before closing. These problems can range from unpaid debts and unpaid tax liens to errors in legal definitions or gaps in the chain of title.
Resolving these issues—known as a remedial action—often requires dealing with lenders, courts, local governments and former property owners. It is a detailed investigative work and the law relies on expert judgment and experience.
Technology can help identify potential risks quickly, but it can’t negotiate a mortgage payment, resolve a probate issue or correct a years-old recording error.
The study also highlights another growing responsibility of title practitioners: fraud prevention. More than half of respondents reported spending at least 11 hours per month on anti-fraud measures, addressing risks such as wire fraud, identity theft and counterfeit property documents.
These threats continue to evolve along with new technologies, making professional surveillance even more important.
This is why the title industry model is so different from other types of insurance. Instead of waiting for a loss to occur, real estate professionals work to identify and eliminate risks before the transaction closes. That duty of protection is one of the reasons that title insurance claims occur more frequently than in many other lines of insurance.
If problems arise after closing, the financial consequences can be dire. A study by Milliman found fraud and fraudulent claims averaged more than $143,000, while financial fraud claims averaged more than $207,000. That fact helps explain why title companies spend so much time and resources on solving problems before closing, and why about 70 cents of every dollar of title insurance premium goes to search, inspection and treatment activities before closing.
However the rise of AI and blockchain technology has fueled speculation that the title process could one day be automated.
There is no doubt that this technology will continue to improve the efficiency of real estate transactions. But even the most advanced technology cannot solve the real legal and human issues that often entangle property ownership.
Public records remain fragmented among thousands of locations. Property histories can include decades of filing, maintenance and legal actions. When mistakes arise – and they often do – they should be resolved by people who understand the legal and practical complexities of land ownership.
Technology can speed up the process. It cannot replace it.
As the real estate industry continues to innovate, we must embrace tools that make transactions faster and more secure. But we must also be aware of the important role that title experts play in protecting homeowners, lenders and the integrity of property rights.
Because when it comes to the biggest purchase most families will ever make, accuracy, accountability and human expertise still matter.
Chris Morton is the CEO of the American Land Title Association (ALTA).
This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners. To contact the editor responsible for this piece: [email protected].
