Zillow Group (Z -1.10%) (ZG -1.13%) operates the most popular real estate websites and mobile apps in the world, with its internet properties receiving 2.8 billion visits during the most recent quarter. And while many investors are likely familiar with the company, it's easy to overlook the technology that powers its digital platform.

In this Backstage Pass video, which aired Sept. 27, 2021, Motley Fool contributor Toby Bordelon explains how Zillow uses artificial intelligence to create a better experience for home buyers and sellers.

10 stocks we like better than Zillow Group (A shares)
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

They just revealed what they believe are the ten best stocks for investors to buy right now... and Zillow Group (A shares) wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks


*Stock Advisor returns as of September 17, 2021


Toby Bordelon: But let's look at Zillow. If you have been searching for a house or even selling a house, you probably used Zillow or a competitor. What are they doing in AI? It's very interesting. One thing they're doing, they're trying to make a smarter search algorithm. The idea with what they're doing here is not to just give you homes that technically are within your search parameters. They want to maybe expand beyond that a little bit serve up what you really want. In essence, they want to give you what you want in response to your search parameters, not just what you say you want, what you actually want. There's a little bit of artificial intelligence machine learning going on there to try to figure out what that is. You put the search engine here. But we think this house that might not quite fit there, you're going to love, and so we want to give that to you. They're trying to improve their search algorithm.

They have something they are working on called a floor plan generator, where they can take the images people upload and generate an actual floor plan with a house for you. They are using that in a virtual reality, sends to you to create their tours of homes just from the pictures you see. Stitching that together with an AI algorithm, they've got the Zestimate. The Zestimate, I assume you are all familiar with, is in many sub-markets now an actual legit offer to buy the house at that price. If you're going to do that, your AI to generate that number. It needs to be really good or you're going to lose a boatload of money. When they do that, that tells you they have a lot of confidence in what their algorithm can do. That they are at the level they are willing to say, we're going to use this AI that processes our Zestimate to make actual cash offers for houses.

That's where they are now. Not everywhere, but it's slowly rolling out to more and more places. Great company.