Transparency and the future of AI trust

Transcript:

Allie Barefoot: I'm Allie Barefoot with Cotality. Welcome back to Season two of Data in Context. In the last year, AI has gone from a futuristic concept to the core of real estate. But for a lot of professionals, that shift has come with a fair amount of anxiety. We hear a lot about the "black box"—algorithms making decisions that no one can really explain. Data privacy being compromised, and the fear that automation might strip the humanity out of a relationship-driven industry. The question isn't whether AI will transform real estate; that's already happening. The real question is: can we use this power without some of the risk? Can we innovate while staying ethical and reliable? In this new digital era, speed can be a liability if it isn't paired with a clear sense of direction. So today, we're going to be talking with Dave Hamilton, Cotality's Senior Vice President of Technology Solutions. And we're going to be breaking down how customers and professionals can build a framework for AI that prioritizes transparency, ethics, and long-term stability. So let's go on ahead and jump into today's questions with Dave. Dave, thank you so much for joining us on the season opener of Season 2 for Data in Context.

Dave Hamilton: Thank you so much, Allie. It's good to be here.

Allie Barefoot: And I know we're going to be talking about AI here on this conversation, which is pretty much what the whole world seems to be talking about right now. But Dave, I want to ask you: AI has made the property market faster than ever before. We can get answers in seconds that used to take a while to build that framework. So, we're in a world where speed is everything. How do we make sure that things aren't just moving faster and getting the wrong answers?

Dave Hamilton: Allie, I think this has been one of the more fundamental questions that I'm asked when I'm out at different conferences meeting clients. I think it kind of begins with this particular question. I think from inception of our AI-native journey here at Cotality, we built very purposefully with principles that ensure safety, responsibility, and certainly, not to be mentioned, right, this idea of bringing leading solutions to our clients as well. But it really starts with those fundamental principles around safety and responsibility. And I think consumers and companies alike really should ask that fundamental question: is my data being used to train models? Do I have flexibility to opt in or opt out of various offerings themselves? And does the solution that I'm buying or consuming really help prevent AI cyberattacks that are really becoming prevalent right now, like around prompt injection, those kinds of things? At Cotality, we built Core AI platform with those basic principles in mind, and that's one of the ways we're trying to address those concerns, Allie.

Allie Barefoot: And it makes total sense. And you know, I mentioned earlier in this podcast, "black box," which is a term that not a lot of people do know, but in summary, it basically is the idea that AI spits out an answer without any trail of breadcrumbs. So how do we build a framework where a real estate professional can confidently explain an AI valuation or an automatic listing price to a cautious client that maybe is a little skeptical of AI?

Dave Hamilton: Yeah. Yeah, and I think it—I think it, again, harkens back to those basic principles we've employed here at Cotality, and I think all companies, and I think all individuals should apply these same fundamentals around transparency, Allie. This kind of guides all of our solutions here at Cotality. We've performed all of our functions here with this concept around basic auditability. We want to know what was prompted. We want to know when it was prompted, and we want to know by whom it was prompted. And just as important, we also want to be able to log and track the response to that prompt as well. We log all of these key attributes within our framework and our approach so that, you know, the real estate professionals that we serve, we can actually give them that assurance that we track all these things. So that in the event something comes up that they need that kind of historical reference, we can provide that to them.

Allie Barefoot: You know, Dave, I remember growing up—well before I could buy a house of my own—it was all about the "For Sale" sign out in the front yard and drive around neighborhoods that had kids my age. And that's kind of how you found a home. But now, it's just looking at digital models in the house hunting process. Does that digital twin approach make the market more stable, or does it create a kind of systemic risk if a model miscalculates something in the home buying process?

Dave Hamilton: Yeah, I definitely see risk here, Allie. Sometimes I just—I always feel like the risk is always right behind me and I'm always, you know, looking over my shoulder. I'm asked to speak frequently about cyber risk and in AI itself, so it's a prevalent topic out there. I think there's no stopping this. In my mind, the genie's out of the bottle. So it's really more prevalent now about how we manage the risk itself. Again, consumers of those capabilities and clients, really, they must demand from vendors that these controls are in place to manage risk itself. Having a digital twin, it's pretty cool, a compelling technology, but small things like—did it move a window? Did it move a doorway? Did it change the lighting of a room that could imply that the orientation to the sun is different because now we see a more lighted room as we're exploring these digital twins and images? Sounds cool, but the reality is each of those scenarios I just described are actually compliance violations, and real estate companies and brokers themselves can actually be fined for those kinds of things. So again, it's really fundamental that customers and clients, they must demand those kind of controls and protections from their vendors like Cotality.

Allie Barefoot: And it sounds like really any age that you're choosing to use AI in your home buying process, there's going to be some reserves whether or not you go the AI route or the more person-oriented route, or really a mix of both. And in Cotality's From House to Home survey, it showed that baby boomers actually trust the professionals, but Gen Z are still a little bit wary—which makes sense. You know, I'm Gen Z, I lean more on technology than my parents do, per se. So since AI models often miss local nuances like you said—possibly a nearby school zone or a flood plain—how can that cause price swings? How does that human oversight help prove to a skeptical Gen Z buyer that this is a tech safety net, not so much a technological trap?

Dave Hamilton: Yeah, I think—I think the Gen Z kind of social group, I think they're going to be very—you know, we have to listen. I think we have to have—our CEO, Pat Dodd, always talks about having two ears and one mouth for a reason, it's about listening, I think. And I think Gen Z being really that first digital-native social group is really going to be influential as we look through this. And I think because of that, naturally they're going to be very skeptical of professionals, governments alike, and I think that skepticism is appropriate. They oftentimes they come to the professional with already having done a considerable amount of research themselves. And I think we have to look at those basic guardrails that have to apply to, you know, our lives themselves and try and find ways to educate the Gen Z population itself. They need to ask for source information. Does it come from a reputable company? You know, any prompt in any LLM, if you prompt it and ask it, it will tell you what the source information is itself. And so again, they're going to do an enormous amount of research on the home purchase ahead of engaging with that professional. I think education is key when it comes to managing through those risks, those hallucinations, and those missing data points themselves. And again, at Cotality, we continue to champion that free education space. We've offered it out frequently, and we're going to continue to do so, Allie. But that's really the key here is just to continue to promote the educational aspect of this. AI is not perfect, and we have to get comfortable prompting it and asking it for what is its source and validate those sources of information.

Allie Barefoot: Absolutely. And looking more so towards the perspective of the professional, Cotality's survey also found that over 60% of buyers still prefer humans for the big tasks in the home buying process, even though AI may have a faster result. From a tech perspective, does this mean that AI isn't human enough yet, or is the goal more so about making the human professional a superhero by giving them better tools?

Dave Hamilton: I think it's the latter, Allie, honestly. Again, at Cotality, we support millions of property professionals, and we take that responsibility very seriously. The goal here really is to keep them in that superhero status, keep them at the center of that client interaction. So it's very important that the professional is really there to guide that process. This is the largest purchase that most of us in our lifetime make, and the professionals are really there to guide people through to make sure that, you know, the fraud risks, all the legal risks, all those things are managed, and only a professional really can help do those things. So it's really incumbent that we need to provide them with that same tools, that same ability and insights to do—have that research at their hands so that they can stay the expert in that entire process, Allie.

Allie Barefoot: And Dave, my last question here for you, and you touched on it a little bit there. I mentioned earlier, you know, there are nuances in a home sale that just some technology can't reach—the feel of a neighborhood, or the emotional state of a seller knowing that, like you said, one of the biggest purchases that somebody will make in their life. So where is the line where AI should stop and maybe a human could take over, or possibly just work hand-in-hand with technology to make the best outcome for that home buyer?

Dave Hamilton: Such a—such a fundamental question right now, and I think in our current time, Allie. AI is changing everything. It's changing the boundaries of human interaction. But I believe—I just believe in my heart—we have to stay connected. The human connection of family, of friends, of life events, of celebrations—those things should never be touched by AI, in my personal opinion. The connection is everything, and I think keeping that human connection is really the key to really leveraging the power of AI, but really staying kind of centered, centered around that again. So one of the things that I shared at the conference last week that I was privileged to present at, I talked about this idea of staying curious with AI, but also it's important that we stay human.

Allie Barefoot: I absolutely love that, and I couldn't agree more. Dave, thank you so much for all the insight that you've given us here a little bit more about the guardrails of AI. I know that it's evolving very quickly, but, you know, feel very good about having professionals like you in our corner that know that this is where it's going, but we can keep up and we can manage it along the way.

Dave Hamilton: Allie, thanks so much. Really enjoyed the conversation.

Allie Barefoot: Thank you again to Dave Hamilton for joining me on Data in Context, and thank you so much for listening to this episode. If you guys haven't already, go on ahead and subscribe to Cotality's YouTube channel. And if you want to find out more information, as always, head over to cotality.com.