Blog Leadership

AI Psychosis in Real Estate: Why Unproven Tech is Putting Agents Out of Business

Derek Middlebrook

Founder, Real Estate OS

February 25, 2025 8 min read

AI psychosis is real. I've encountered it multiple times in the last few days. People are full-fledged crazy with AI and think they're invincible. And they're coming for real estate agents.

The Dangerous Reality of Unproven Tech

Here's what's happening: Tech builders with zero real estate experience are creating products they don't fully understand, selling them to agents who don't know better, and ignoring the complex web of regulations that govern our industry.

They don't understand:

Rather than researching the laws and adjusting their products accordingly, they'd rather ignore the issues entirely. This is super dangerous for the real estate industry.

The Harsh Truth About Business Failures

According to the top 10 business failures in America, real estate businesses rank #6 — behind restaurants and clothing brands. Taking the wrong direction from somebody can put you out of business in 12 months, especially in today's difficult real estate environment.

"You should only take direction from those who have achieved what you most want to achieve. Agents, teams, or coaches who have a track record of success and proven systems that are tried and tested and work."

Anyone who DMs you on LinkedIn or email without a proven system should be instantly ignored. Following the wrong advice can cost your business thousands or even millions, depending on your scale — not to mention potential lawsuits.

What Makes Real Estate OS Different

Every system in Real Estate OS has been built first in my own business, or tested in one of our OS members' businesses, then shared for everyone to use. These aren't products we just started using or tried for a week before bragging about results.

These are systems tested with thousands of leads that deliver proven results.

My Competitors Fall Into Three Categories:

1. Solo Tech Builders
No experience, no knowledge, building sketchy products that over-promise and under-deliver. No testing. No brand to back them up.

2. Big Corporations
Seeded with millions of dollars but disconnected from the real problems agents face today. Building shiny products that technically work but don't get real results.

3. Coaching Programs
Tell you what to do but ultimately disconnected because their paychecks don't depend on your results. Videos and trainings are outdated because updating systems is too resource-heavy — they make more money on acquisition than retention.

The Real Estate OS Difference

We're the middle ground. Built by current real estate operators inside the trenches. If the systems don't get results and the trainings aren't working, our real estate business loses money. We don't have seed money to build cool features that get no results.

Every system we build and every training has to maximize results because of our limited resources.

Surviving the AI Tsunami

My vision has always been steps ahead of everyone. My focus now for Real Estate OS is to survive and thrive through the AI Tsunami. God has gifted me with vision, future thinking, and the ability to predict market trends and psychology.

I'm taking Real Estate OS in the opposite direction of all the cool AI tech. Instead, we're building your own Real Estate Business Bunker that can withstand any storm.

Agents chasing shiny AI products will run up massive bills and run themselves out of business. I'm a big believer in not selling a product you don't need.

Our Philosophy: Results Over Revenue

I'm not in the business of taking money. I'm in the business of getting results.

The Foundry: A New Model for Tech Implementation

This morning I woke up with 5 appointments booked on my calendar from prospective REOS agents. I'm in no rush to build my client base. God is providing people to find me.

Soon I'm going to need to hire a full-time assistant, but I'm not ready for scale yet. I'm still tightening onboarding and systems and making the product perfect.

For scale, I'm doing something unheard of:

The Real Estate OS Foundry — a "brokerage" of tech implementers who onboard agents to Real Estate OS. I'll give them 50% of revenue to build their own book of business and nurture it.

This is completely unheard of in the tech industry. The same way brokerages for loan officers and realtors operate, I'm creating for tech implementers. I'll introduce them to agents, show them how to grow their book of business like insurance agents, and hand them the system and the keys.

Real Estate OS is Agents and Techies First

My vision is to serve everyone first. I am second to everyone. This is my gift to the industry.

It's been pretty fun to build this project. I still remember the first Saturday morning when I sat down and began building. I would've never believed it would get this far. I spoke to executives at companies about a company that didn't exist, shared my vision, and just kept building. Things and partnerships just kept falling into place.

After meeting many executives over the past 12 months, I believe I'm a special founder who somehow fell into a lucky situation.

Everything I do is to serve other people. I've got helping others in my subconscious, and my goal is to help thousands of realtors. I want to put this brand on the map and build a full team to scale this thing.

Join the Movement

If you're tired of:

Then join Real Estate OS. Built by operators, for operators. Tested in the trenches. Designed to survive the AI Tsunami.

Interested in the Foundry?

We're looking for solo AI developers, automation builders, and tech entrepreneurs who want to build their own book of business inside real estate.

Learn About Foundry