I Asked AI How to Buy a Home. Here’s What It Got Right — and Wrong.

AI is quickly becoming part of almost every industry, and real estate is no exception.Buyers and sellers are increasingly turning to AI chatbots for advice about buying a home, selling a property, choosing a real estate agent, financing, negotiations and just about everything else involved in a real estate transaction.At the same time, real estate agents are being bombarded with new AI tools promising to automate everything we do.Eventually, AI will undoubtedly change this industry. But can it actually replace the knowledge and experience of a good real estate agent?I decided to put it to the test.I asked ChatGPT a very simple question:“I want to buy my first home. What should I know and do?”The answer was actually pretty good. Not perfect—but better than I expected.Here’s what it recommended, along with where I agree, where I disagree, and what I think buyers should understand before relying entirely on AI for real estate advice.

1. Figure Out Your Finances Before Looking at Homes

ChatGPT's first recommendation was to speak with a mortgage broker or lender and get a proper pre-approval before seriously shopping for a home.I completely agree.You really want to understand three numbers:

• The maximum mortgage you can qualify for
• The monthly housing payment you're comfortable carrying
• The maximum purchase price you're personally comfortable paying

Those numbers aren't necessarily the same.Just because a lender is willing to approve you for a certain amount doesn't mean you should necessarily spend it.You also need to consider property taxes, strata fees, insurance, utilities, maintenance and your other monthly expenses.Your qualification can also change depending on the property. A condo with high strata fees, for example, could affect your borrowing capacity differently than another property at exactly the same purchase price.

2. Understand How Much Cash You Actually Need

Your down payment is only one piece of the puzzle.Canada allows qualified buyers to purchase certain properties with less than 20% down, although doing so will generally require mortgage default insurance.There are advantages and disadvantages to putting less money down. Getting into the market sooner may be valuable, but starting homeownership with very little equity isn't necessarily comfortable for everyone.You also shouldn't drain every dollar you've saved just to complete the purchase.There are closing costs, legal expenses, inspections, moving costs and all those wonderful unexpected expenses that tend to appear shortly after somebody hands you the keys.Having an emergency fund left over matters.

3. Understand the Programs Available to Buyers

There are several programs designed to help first-time buyers, including the First Home Savings Account (FHSA), Home Buyers' Plan and various tax exemptions and incentives.The FHSA can be particularly valuable because eligible contributions can reduce taxable income while qualifying withdrawals toward a first home can be tax-free.There may also be situations where using your TFSA makes sense as part of your savings strategy.The important point isn't that every buyer should blindly use every available program.Your income, savings, timeline and tax situation are different from everyone else's. Understand the programs and then determine which ones actually make sense for you.

4. Decide What You Actually Need

Before endlessly scrolling through listings, establish what actually matters.There should be a difference between your must-haves and your nice-to-haves.Location, bedrooms, parking, schools, commute, pets and accessibility might be important.A renovated kitchen, beautiful view or new appliances might be nice.Although, after years of working with buyers, I'll tell you that people don't always prioritize things quite as logically as an AI chatbot might expect!Sometimes the white kitchen becomes the must-have while the commute somehow becomes negotiable.That's human nature.The important thing is understanding your priorities before falling in love with a property that doesn't actually fit your life.

5. Don't Choose a Property Based Only on the House

AI recommended choosing your area before choosing the house.In theory, that's great advice.In reality, buyers often balance location against what their money can actually purchase.Would you rather have a newer townhouse in one community or an older detached home somewhere else? Would driving another 15 minutes dramatically improve what you can afford?These are trade-offs buyers make every day.But researching the neighbourhood is extremely important.Visit during different times of day. Look at traffic, transit, schools, parks, commercial properties, railways, major roads and future development.The home itself is only part of what you're buying.

6. A Buyer's Agent Should Do More Than Send Listings

This was one of ChatGPT's better recommendations.A good buyer's agent shouldn't simply set up an automated search and start unlocking doors.Your agent should help you understand:

• What comparable properties actually sold for
• Whether the asking price makes sense
• Differences between neighbourhoods
• Potential resale concerns
• Property history
• Strata issues
• Contracts and conditions
• Negotiation and offer strategy
• Potential problems with the property

The job isn't simply finding a property.It's helping you identify the right property, understand the risks and navigate the transaction.

7. Learn to Ignore the Asking Price

This may have been one of my favourite recommendations.A home listed for $699,000 isn't necessarily worth $699,000.The asking price is a marketing decision.What matters is what comparable properties are actually selling for and, ultimately, what that particular property is worth to you.There's an important distinction between buying something below asking price and buying something below market value.A property could sell 10% below its asking price and still not be a particularly good deal if it was overpriced in the first place.Likewise, there are situations where paying slightly above what comparable sales suggest may make sense to a particular buyer.Maybe it's in exactly the right school catchment. Maybe the layout is perfect. Maybe purchasing another property would require $50,000 in renovations.Value isn't determined solely by the number printed on the listing.

8. Be Extremely Careful With Strata Properties

When buying a condo or townhouse, you're not simply buying the unit.You're buying into the strata corporation.That means reviewing documents including the Form B, budgets, financial statements, contingency reserve fund, depreciation report, insurance, deductibles, bylaws, parking and storage information, special levies and meeting minutes.A seemingly inexpensive condo can become very expensive if you don't understand the financial condition of the building.But I'd expand ChatGPT's advice here.Every property requires due diligence.Detached homes can have title issues, easements, rights-of-way, development restrictions and other concerns that can have enormous consequences.The type of due diligence changes depending on the property and what you intend to do with it.

9. Protect Yourself When Writing an Offer

Depending on the property and circumstances, an offer may include conditions relating to financing, inspection, insurance, title and strata documentation.One important item I thought ChatGPT underemphasized was the Property Disclosure Statement and the importance of reviewing the seller's representations about the property.Conditions give buyers an opportunity to perform their due diligence before becoming fully committed to the transaction.A subject-free offer removes many of those protections.And remember: a mortgage pre-approval doesn't necessarily mean either you or the property has received final approval from the lender.

10. Get the Property Inspected

ChatGPT actually provided excellent advice here.A home inspection isn't necessarily about having someone tell you whether you should buy the property.It's about better understanding what you're buying.An inspector may identify maintenance issues, potential problems and upcoming expenses that weren't apparent during your showing.They're also not going to see everything.Inspectors generally aren't opening walls or pulling up flooring. You're buying a home, and homes require maintenance.The goal isn't necessarily to produce a list of tiny deficiencies that you can use to renegotiate the transaction.It's to understand the property and identify significant concerns before moving forward.

11. Understand BC's Home Buyer Rescission Period

Most qualifying residential transactions in British Columbia include a three-business-day Home Buyer Rescission Period.But this isn't simply a free opportunity to change your mind.Exercising the rescission right generally comes with a financial cost based on the purchase price.In transactions that already contain buyer conditions, those conditions may provide other ways for the buyer to complete their due diligence.Understanding how the rescission period interacts with your contractual conditions is important before writing an offer.

12. Know What Tax Benefits May Be Available

First-time buyers may qualify for exemptions or reductions from BC's Property Transfer Tax, and there may be additional federal or provincial programs available depending on the property and buyer.These programs and their eligibility requirements change.That's why I wouldn't recommend relying on an old article—or even an AI chatbot—to determine exactly what you qualify for.Verify the current rules with the appropriate professional before making your purchase.

So, How Did AI Do?

I would give ChatGPT about an 8 out of 10.Most of the information was good.It understood that buyers should prepare financially before looking at properties. It emphasized due diligence. It recognized that asking price and market value aren't necessarily the same thing. And it correctly identified that a good agent should provide considerably more value than simply sending listings.But it also demonstrated why I don't think AI has replaced experienced professionals—at least not yet.AI can provide information.What it can't necessarily provide is context.Real estate isn't a standardized transaction where every property, buyer, seller and market behaves exactly the same way.The difficult questions aren't usually:"What is a home inspection?"They're:"The inspection found this particular problem, on this particular house, at this particular price, in this particular market. What should I do?"That's where experience, judgement and relationships still matter.I use AI in my own business, and I expect these tools to become increasingly important for buyers, sellers and real estate professionals.But when I have a complicated accounting question, I still call my accountant.When I have a legal problem, I call my lawyer.When I need financial advice, I speak with the professionals I trust.Real estate is no different.Use AI to become a better-informed buyer or seller. Ask questions. Research. Learn.But when hundreds of thousands—or millions—of dollars are involved, information is only part of what you need.You also need someone who knows how to apply it.Written by:
Steve Karrasch PREC
Karrasch Real Properties Team
Macdonald Realty