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The word "realtor" describes only one aspect of working in the real estate industry. Professionals who own their companies must have a firm grasp on every element that impacts operations - whether the commodity is land, housing or commercial property. The sections that follow span a broad spectrum of subjects key to growing a healthy business.
By Jared James
Let’s be honest for a second: How many of you actually follow your business plan throughout the entire year? I’m willing to bet that almost none of you do, which is understandable because that’s just not how most of us operate. However, that doesn’t diminish the power of having a good business plan. You just need to make sure it works for the way you function. Here are four ways to ensure that your business plan works for you in the coming year so you can get the most out of 2018.
1. Check your ambition. Log into your MLS and search for homes sold in the past year. How many of those transactions were you a part of? The answer should motivate you to be more ambitious and raise your goals and expectations for the next year.
2. Know your numbers. A good business plan doesn’t just lay out what you need to do for the next year; it shows you what you need to do today. You should know exactly how many appointments you went on in 2017 how many of those appointments turned into transactions. This tells you, based on your closing ratios, how many appointments you need each day to reach your goals in 2018.
Think of it like this: If your closing ratio on appointments is 50 percent, then you need to go on 100 appointments in the next year to do 50 transactions (figuring that you will work 50 out of 52 weeks). That breaks down to only two appointments a week—a goal you could easily achieve.
You’ve got to get clear on what constitutes a winning day for you. Being busy doesn’t mean you’re being productive. When you break it down and know the exact number of appointments you need to reach your goals, you’ll have the clarity to focus your efforts toward your desired outcome.
3. Make time blocking nonnegotiable. Create alignment between what you say you want and what you do to get what you want every, or you will never succeed. For example, don’t say you want to run a marathon and then fail to train daily because you’re too busy. Likewise, you can’t say you want a successful real estate business and not make time for things such as follow-ups, vision planning, practicing your dialogues, and prospecting. If you don’t time-block for key revenue-generating tasks and make that time nonnegotiable, you’ll end up spending most of your day putting out fires. You can check out my video on time blocking for more tips.
4. Hold yourself accountable. Most everyone says they are willing to do the work, but they’re less inclined to keep track of their progress and realign if they veer off course. Accountability is where most of us fail because we always start with good intentions. But have you ever had a disconnect between what you intended to do and what you actually did? Of course you have. That’s why it’s important to either hire a coach or get an accountability partner from within your office to help you stay focused on your business plan and goals.
This year should be the year you not only plan but also take action. You need a business plan, but it has to be executed daily for it to matter. Are you ready to make this your year? Do me a favor and go to ConnectWithJared.com, and send me a message about what you’re doing differently this year to ensure that 2018 will be like no other year you’ve had. I look forward to hearing from you!
Source: Realtor Magazine, January 2018 (http://realtormag.realtor.org/well-being/work-life-balance/article/2018/01/4-strategies-for-sticking-your-business-plan)
By Ryan Dezember and Peter Rudegeair
When Blackstone Group LP wanted to borrow hundreds of millions of dollars to buy foreclosed homes after the housing crash, it needed a quick, inexpensive way to value thousands of houses the investment firm already owned and was offering as collateral.
Blackstone and its lender, Deutsche Bank AG, settled on a sort of drive-by valuation done by real-estate agents that are more cursory and cost far less than traditional appraisals.
Congress outlawed the use of such assessments, called broker price opinions, or BPOs, to value properties for traditional mortgages. But the prohibition, enacted as part of postcrash financial regulation, doesn’t apply to investors buying tens of thousands of houses.
Now these perfunctory valuations abound, underpinning tens of billions of dollars of home deals. Sometimes the process is outsourced to India, where companies charge real-estate agents a few dollars to come up with U.S. home values by consulting Google Earth and real-estate websites.
BPOs have been used to value collateral in the more than $20 billion of bonds sold by institutional landlords, such as Blackstone’s Invitation Homes Inc., and in the fast-growing business of lending to individual house flippers. Banks request them when considering whether to foreclose or negotiate repayment plans with delinquent homeowners.
Their popularity shows how Wall Street is finding ways to adapt to government efforts to crack down on some of the excesses that contributed to the housing crisis. Critics say BPOs are ill-suited to gauge home values and could leave debtholders with less collateral than they thought. Properties worth less than their debt could result in losses for investors, while inaccurate price information might misguide a lender in a foreclosure process.
“BPOs are a creature of financial institutions that want deals to close fast, and so they don’t have to use an appraiser,” said Donald Epley, a retired University of South Alabama professor who helped write national appraisal standards after the 1980s savings-and-loan collapse. “You’re just dumbing down the standards to make the loan.”
Their proliferation has drawn attention from the Securities and Exchange Commission, which is investigating whether rental-home companies pushed for higher valuations on properties underlying securities. Meanwhile, appraisers and Realtors say the quality of BPOs has deteriorated as the price for performing them has dropped to as little as $25 a house from $50 or more.
Unlike appraisers, people who perform BPOs don’t need much training or an appraisal license since the estimate is simply meant to suggest listing prices.
BPO proponents, including investors and rental-company executives, say that when pooling thousands of houses in an investment vehicle, individual valuations that are too high or low tend to balance out. The difficulty for appraisers to enter occupied homes also pushes investors toward BPOs, which they say are usually as accurate as appraisals.
“BPOs have really taken hold as a way for lenders and investors to do evaluations en masse,” said Dennis Cisterna, chief executive of Investability Solutions, which provides services to rental-home companies. “Using appraisals on every property usually isn’t financially or operationally feasible.”
When Fannie Mae last year guaranteed about $1 billion of Invitation Homes debt, it accepted BPOs for the 7,204 houses serving as collateral. Assuming a typical appraisal price of $450 and the $95 that Invitation Homes pays per BPO, the company saved about $2.6 million.
Credit-rating firms usually discount BPO values when grading rent-backed bonds. Kroll Bond Rating Agency has trimmed them by about 10% and uses the lower of the reduced BPOs and the amounts spent buying and renovating the homes.
“We’re never taking BPOs at face value,” said Kroll’s Daniel Tegen.
BPOs have been around for decades but boomed in the mortgage meltdown. Lenders ordered reams of them to price repossessed homes. Real-estate agents gobbled up the jobs as home sales dried up. Many, like Barbara Eisman, hoped the valuation work would lead to property listings.
It never did, said Ms. Eisman, a Washington, D.C., Realtor. Yet the roughly 5,000 BPOs she performed over the last decade provided regular income. Her recent assignments have included drive-bys to see if foreclosed homes were vacant and interior exams for mortgage modifications.
Ms. Eisman said an Indian company, AbVin Ventures LLP, offered to do the work for her for $10 a house. AbVin asked for her login credentials for sales databases and the firms that hire her. She declined. “They’ll kick me to the curb if they find someone is logging in and doing the work,” she said.
Edward Wisniowski, a Crest Hill, Ill., broker, dialed back on providing price opinions after pay for many fell below $50. He turned away Indian firms offering to do his work. “I don’t know how they can do it,” he said.
AbVin co-founder Abhishek Shimoga Onkaraswamy said his staff of 50 in Bangalore churns out as many as 300 BPOs a day using the clearinghouses of sales and listings data compiled by Realtors, who he said provide AbVin with login information, as well as websites like Zillow.
“There’s not a big difference between what a broker can do and what we can do,” he said. “We know what these companies are expecting from the brokers.”
Francois Gregoire, a St. Petersburg, Fla., appraiser and former state regulator who has examined thousands of BPOs as a litigation consultant, said quality varies greatly. “Some look like the real-estate broker hired someone to go take photos of the property and did nothing more than sign the BPOs.”
In the prospectus for the loan it guaranteed for Invitation Homes, Fannie Mae said drive-by assessments supplied by Green River Capital valued the collateral homes at 66.7% more than the loan amount, but that “the market values of the properties may not be accurately reflected.”
People familiar with Fannie’s processes said it compared the BPOs to home prices of the same properties in its own database.
In May, Green River parent Radian Group Inc. said the SEC requested information on BPOs it provided for rent-backed bonds. Invitation Homes and three other publicly traded landlords said in September they received subpoenas asking for any communications with Green River about adjusting the valuations, among other documents.
A Radian spokeswoman declined to comment. An Invitation Homes spokeswoman said the company selects, renovates and maintains its properties to the “highest standards,” which is “underscored by the strong and consistent performance of these securities.”
Source: Realtor.com, January 23, 2018 (https://www.realtor.com)
By Mandy Ellis
Young adults are a resourceful bunch. Despite being pegged as financially careless, there’s evidence that many are adept at bargaining for lower prices on goods and services—including negotiating down your commission. First-time sellers who haven’t yet learned the value you bring to the transaction on the selling side may be especially likely to haggle with you. Although some real estate professionals are willing to lower their commission to attain a longer-term goal, such as winning referrals from a satisfied customer, you don’t have to automatically cave to your client’s request.
“Work on it before that question comes up, and when you talk to potential clients, explain what you do and why it’s valuable,” says Paula Monthofer, ABR, GRI, a real estate pro with Realty ONE Group Mountain Desert in Flagstaff, Ariz., and 2017 president of the Arizona Association of REALTORS®. She adds that because many practitioners handle tasks in a seamless way—which can create an impression of effortlessness in their work—clients can underestimate their value. “If you play a good pregame and show them behind the curtain, they won’t question your commission.”
It seems you may find yourself in this situation with many different clients, not just those who are new to selling. While 66 percent of millennial sellers say they’ve attempted to negotiate their real estate agent’s commission, according to a Redfin survey in December 2016, 58 percent of Generation X members and 39 percent of baby boomers report the same.
Heather Davis, a sales associate with RE/MAX Preferred Properties in Oklahoma City, says how you defend your commission is a reflection of how you will represent your clients in a real estate transaction. “How am I supposed to represent and stand up for my seller if I can’t defend my own pricing and commission?” she says. “If you’re serious about your business, you need to have your principles and be sure that you’re providing a service that justifies your payment schedule.”
Of course, your defense should be tactful and respectful. Rather than justifying why you charge your specific commission rate, give your clients a justification for paying it. Spell out how your negotiation skills, home inspection know-how, or ability to identify serious offers will help your sellers get the most profitable sale, says Terry Miller, CRB, CRS, managing broker at Coldwell Banker Bain in Seattle. “Millennials love data, and they want you to be quick and efficient and prove why they should hire you,” she says. “The take-home is to help them see you’re the obvious choice.”
Remember that your commission isn’t based solely on hours spent with the client, which is why fighting for it is essential. Your commission also covers items such as the work you do to market a property and organize vendors and contractors for needed repair work to the home. When you think more intentionally about your business, you don’t treat your commission like a negotiation chip, Monthofer says.
If you’re still in the interview process with a prospective client, you don’t need to verbally defend your commission right away. Demonstrate your expertise first, and consider attaching an agency pamphlet, along with links to your testimonials and online reviews, to the email confirmation for your initial appointment. If prospects want additional sources, connect with past clients who are willing to share their experiences working with you. “Show clients how you’ve sold in their neighborhood and facts on what you bring to the table,” says Pete Kopf, principal broker at Kopf Hunter Haas, REALTORS®, in Cincinnati. “The relationship is how you present yourself and illustrate value, and the different ways you deliver that value is how to handle a question on commission.”
If you’re already working with a seller, track your work to create a strong case for your commission in case the client questions it later in the transaction process. Update your client at the end of every week on the calls, reports, and tasks you completed for them. This builds accountability and makes it hard to argue against commission percentages when you’ve been consistently communicating your actions.
“Dozens of clients ask to lower my commission because I’m in a competitive market, and I say, ‘I don’t discount, and here are the reasons why,’” says Marie Presti, ABR, CRS, broker-owner of The Presti Group Inc. in Newton, Mass. She adds that sellers often ask her to reduce her commission if they accept an offer below their asking price. “I say, ‘I’m not a party of this transaction. I have an agreement with you, and you can accept, reject, or counter the offer, but my commission isn’t part of the discussion.’”
“No” is a fair answer, and if your client won’t accept it, you can walk away from the relationship. However, if you’ve made a mistake, you should pay for it, Kopf says. After all, it’s your job to make sure the transaction goes smoothly. “We’re like the PGA Tour: We don’t get paid if we don’t play well,” Kopf says. “Good brokers show their value throughout the process. I often get a hug at the closing because my customers know I’ve earned that paycheck.”
When you truly believe in your value proposition, it’s much easier to explain the “why” of your commission percentage. “Once you know what you’re worth, you’ll stop giving discounts,” Monthofer says.
Source: REALTORMag, November 2017 (http://realtormag.realtor.org/sales-and-marketing/relationship-management/article/2017/11/defend-your-commission-scrappy-sellers)
By Chadwick Ciocci
Real estate brokering is a highly competitive business. Breaking into it is difficult, to say the least. In fact, it's commonly shared that 87% of new real estate agents fail within the first five years.
The reason? Most new real estate agents don’t make the sort of income they need or want in order to continue in the business.
While real estate will always be a competitive business, there are several strategies you can adopt to give yourself a leg up. Perhaps the most productive and least utilized of these is creating a niche — a sort of area you specialize in and promote that attracts new customers to you.
What is the benefit of having a niche?
A niche creates the ability for you to more easily build trust among potential clientele, which increases the likelihood of you gaining new clientele and therefore closing more deals. For example, if you become an expert on waterfront properties and all of the particular issues that surround those type of deals and properties, then owners of waterfront homes (as well as those looking to buy them) are far more likely to trust your expertise and judgment when it is offered. If a buyer believes you understand flood insurance better than most other agents, they would be more likely to use you as their agent.
A niche sets you apart, which creates opportunities for branding and marketing (and after all, what good is having a niche if you don’t brand and market it?). Going back to our waterfront niche example, an agent might consider sending a mailer to waterfront properties in the area they service explaining new FEMA rules and how they might impact the sale of a property, or they might send out tips on how to reduce the risk of flooding in the event of a hurricane. This is a subtle marketing technique that, over time, will establish you as an expert in this particular niche. When the time comes, you will be top of mind for those looking to sell their waterfront properties.
There is an almost unlimited amount of niches, and more than half may have nothing to actually do with real estate itself. Still, establishing yourself in one can be instrumental to your success in the real estate business.
1. Social Niches
Social niches are those that you create in your non-real estate life.
Do you coach Little League? Forming a niche within the Little League community can be a fantastic opportunity to gain clientele from the parents of the kids you coach. This type of a niche is not dissimilar to leveraging your spheres of influence for your business, but it requires a higher level of commitment and self-promotion. You are likely not the only real estate agent in your area coaching Little League, so go above and beyond. Sponsor a team or tournament, or bring in a guest coach so that you can brand these teams and events with your business, thus connecting your business with the success of your clients’ children — a surefire way to bring positive attention to you as a real estate agent.
Similar niches can be found in your house of worship, the PTA, yoga class and almost any other group, club or activity you, your family or children take part in.
At my firm, we’ve managed to create a niche out of the art community. In fact, over 90% of our real estate clientele are somehow involved in the arts as artists, collectors, dealers or gallery owners.
2. Geographic Niches
Geographic niches — focusing on a particular neighborhood, development or part of town — can be incredibly powerful. Success in this type of niche, more than others, requires two things: focus and expertise.
Focusing on a town as a whole is not a niche — a town is a town, a niche is a niche. A niche is a neighborhood, a few streets, an apartment complex. This isn’t to say you shouldn’t take or pursue business outside of your niche (of course you should!) -- just to say that gaining expertise in a very particular area and then marketing that expertise to the area is more likely to result in new business than marketing yourself as a generalist to a much larger area.
A geographic niche is almost inseparable from becoming a leader in your area of specialty. If sewer assessments are unfairly going up in your geographic niche, this is a great opportunity to bring in a local leader for an informational meeting, mail your geographical niche about this meeting and then not only help your neighbors, but capitalize on this effort by making sure they know you are in real estate and that you are there to help them in several different ways.
3. Real Estate Niches
Real estate niches are perhaps the most lucrative for your business, and there are so many potential niches that it is almost impossible not to find one that will interest you. Potential real estate niches include waterfront, equestrian, luxury, new construction, condos, historic homes and so many more.
If I am a homeowner with an equestrian property, then I am going to want someone who knows all of the issues surrounding this type of property, not only because they are more likely to be connected to someone interested in purchasing an equestrian property, but also because they will be more easily able to handle the transaction when problems arise.
Can the property be subdivided? How many horses can someone have on this size of property? Are there any special insurance issues buyers should understand? If this is your niche, people will know they can ask you these questions.
To find your niche, find something you are passionate about and actively involved in (or even something you want to learn more about or get involved in) then become an expert in that something and make sure everyone knows about your expertise.
Source: Forbes, December 27, 2017 (https://www.forbes.com/sites/forbesrealestatecouncil/2017/12/27/how-to-create-a-niche-as-a-real-estate-agent)
By Maria Patterson
How HouseCanary Is Giving Agents a Competitive Edge
It’s no secret: The value of the real estate agent is under attack. With a slew of disruptors determined to diminish their role in the real estate transaction, it’s become incumbent upon agents to bolster their value proposition to the consumer with more service, more guidance, more information…whatever it takes to stand apart and make themselves an indispensable advisor in an increasingly competitive and crowded market.
That’s where data comes in. But while consumers seem to have access to all the real estate data they could possibly want these days, there are vast discrepancies in the quality of that data. Every real estate agent out there probably has at least one tale to tell of how an inaccurate home valuation bungled a deal. And that’s exactly what makes HouseCanary a game-changer.
Not only has the San Francisco-based firm redefined the practice of home valuation in terms of accuracy—with a median error of 2.5 percent and declining every month as the company’s algorithms process more data—it is helping real estate professionals set themselves apart with the burgeoning power of predictive analytics, elevating them from average real estate agent to invaluable financial advisor. By leveraging 40 years of U.S. home sales and a billion transactions to predict the direction of virtually every metro, zip code and block in the United States, HouseCanary can provide agents with branded, property-specific reports that depict how their client’s home value has increased, where the value of the home is headed, and which improvements will have the biggest impact on that value. Now, instead of the typical listing presentation, agents can explain—in precise detail—the “why” behind a home’s current and future value.
Co-founded by CEO Jeremy Sicklick and Chief of Research Chris Stroud in 2014 to help investors and lenders make better real estate decisions, HouseCanary created one of the most accurate forecasting models in the industry, then packaged it into easy-to-use software solutions for appraisers, brokers, investors and lenders, including Wall Street investors like Blackstone and the nation’s top three mortgage lenders; $64 million in venture capital funding from the likes of Eric Schmidt, chairman of Google parent Alphabet, former Commerce Secretary Penny Pritzker, and top venture capital firms helped solidify HouseCanary’s status as the real deal.
In 2016, HouseCanary made that same data available to real estate professionals—now, that same information lenders had been using to decide whether or not to extend a loan, could also be accessed by a real estate agent working on the front lines with the consumer. Imagine being able to sit down with clients and walk them through the exact financials of why they should make a particular offer—an offer based on real data and real numbers. Interactions like this cast the real estate agent in a whole new light.
“Innovative lenders and savvy loan originators are leveraging HouseCanary’s data to give their clients confidence in the home purchase decision they’re about to make,” says Joe Dahleen, executive vice president and chief strategy officer at MortgageHippo. “A homebuyer can feel confident with boosting their offer by $20,000 to win seller acceptance because HouseCanary’s accurate data helps them make an educated and informed real estate decision. The company’s in-depth understanding of the current market and three-year future value forecast help today’s buyers win.”
Forward-thinking real estate professionals understand the potential. Quality data based on HouseCanary’s predictive analytics can vault their positioning in the marketplace. “We have a distinct competitive advantage if we are armed with more accurate data and more detailed content,” says Todd Hetherington, CEO of NM Management and CENTURY 21 New Millennium, serving Maryland, Virginia, and the Washington, D.C., area. “HouseCanary can help provide this advantage through its ability to refine and analyze literally thousands of different variables and algorithms—that’s incredibly powerful.”
That’s why many brokers and agents have already gotten on board. “We started working with HouseCanary after meeting with them at the REALTORS® Conference and Legislative Meetings in Washington, D.C., last May,” says Scott MacDonald, president of RE/MAX Gateway in Northern Virginia. “We made the decision because we embrace the idea of predictive analytics and how it relates to the buying and selling of real estate.”
Redefining Accuracy
What really sets HouseCanary apart in the world of big data is its unprecedented approach to accuracy. HouseCanary’s platform leverages machine learning models that draw upon the most robust real estate database, and correlates those with mortgage markets, jobs, population shifts and an amazing array of local, block-level data to be able to predict the direction of every metro, zip code and block in the United States, analyzed and visualized in real-time for better, faster decision-making.
“It’s true that data permeates every part of the real estate industry to help agents and brokers support their clients—but not all real estate databases are created equal,” explains Sicklick. “Most agents are familiar with the pitfalls of the housing data available on major real estate portals and would prefer that their clients use home-search options that contain accurate, up-to-date data. HouseCanary has built the most robust—and most accurate—home database in the industry, so agents and brokers can feel confident that the valuation or appraisal generated by our products is pinpoint-accurate.”
“In order to move beyond the pre-canned automated valuation models (AVMs), or even baseline reporting on a home’s past value adjusted for current sales, we need bigger data sets and stronger algorithms to project future value with a high degree of accuracy,” says Dave Garland, a partner with Second Century Ventures and the director of Strategic Investments for the National Association of REALTORS®.
“HouseCanary aims to not only capture and curate those data sets, but also works with real estate practitioners to better predict what will happen home by home, block by block, for virtually every home in America.”
A member of the National Association of REALTORS®’ s 2017 REach® technology accelerator program, HouseCanary is representative of the evolution of how residential real estate is appraised, valued, purchased and sold. Using its software solutions, agents can quickly pull up complete and accurate home valuations and analytics and price per square foot for all nearby comparables, as well as three-year price growth for all homes near the listed property. Going well beyond the standard CMA, HouseCanary’s Value Report puts powerful information into agents’ hands, allowing them to truly differentiate themselves from the competition and validate their value to consumers.
HouseCanary has also begun to integrate with leading CRMs, with more to be rolled out shortly, enabling agents to put data to work as an ongoing engagement tool.
“HouseCanary has the ability to analyze properties down the block, which helps with the accuracy of their information,” says MacDonald. “Our agents can see who is opening the Value Reports and can, in turn, reach out to their clients to start a conversation.”
Using predictive analytics, HouseCanary upended the real estate valuation process, benefiting everyone involved in the transaction process. “The real estate process is slow and cumbersome, and that’s even truer for the mortgage loan process,” explains Stroud. “One of the major reasons for delays is collateral valuation or appraisals, which can take as long as six to eight weeks in some high-demand areas, and can cost upwards of $500. By embracing predictive analytics, HouseCanary is addressing the most critical hurdles of collateral valuation and significantly shortening the amount of time it takes to get an accurate appraisal from weeks to days—or even the same day, in some cases—and providing those appraisals for a reduced cost to the consumer. Through predictive analytics, real estate agents and brokers can help their clients reach the closing table faster and keep more money to use toward the home purchase. There’s also a significant benefit to consumers when agents and brokers are familiar with predictive analytics: They can help individual homebuyers understand the risk and reward of their new investment, leading to increased confidence and trust from real estate clients.”
And for real estate consumers, the value of their investment is the most essential piece of information in the decision-making process.
“We as REALTORS® and brokers don’t determine which data is of value—the consumer/client determines which data is of value,” explains Hetherington. “From a seller’s standpoint, they’re only concerned with the market value of their home, days on market and what will appeal to a buyer. From a buyer’s standpoint, they’re concerned more with a broad-based data knowledge for comparing different markets and neighborhoods.”
But the issue to-date has been inaccurate home valuations. HouseCanary is out to change the game in that regard.
“The problem with many AVMs is that they’re using poor-quality data to generate a valuation, which means the margin of error can often be pretty wide—leaving it up to real estate agents to explain to consumers why the AVM number isn’t realistic,” says Sicklick. “HouseCanary also gives real estate professionals—as well as lenders and appraisers—the ability to tweak existing property details and data to more accurately reflect the home as it stands, marrying technology with human understanding and intuition.”
Predictive Analytics Powering Real Estate Agents
As all real estate professionals know, no matter how much data one has, no two homes are alike. An endless number of factors affect a home’s value, from high walkability to being on the right side of the highway to having a wooded backyard. Yet traditional valuation models fail to take these details into account. HouseCanary, however, takes valuation a huge step further by empowering agents with data on how a remodeling project will impact the value of a home. Will adding another bathroom increase my home’s value in two years? Is putting in a pool a bad idea? This is how HouseCanary is further maximizing the power of predictive analytics for real estate professionals.
“Whether the remodel involves adding square footage to the home in question through a new wing or addition, or something simpler like putting a deck on a home, HouseCanary’s predictive analytics can help consumers understand where their current home stands in terms of building size and lot size, and can parse the popularity of different home attributes within the neighborhood,” explains Sicklick. “Homeowners can use that information to make educated decisions about where to spend their upgrade money—and agents and brokers can help shed insight by explaining to sellers or potential move-up clients what they can do to capture top dollar for their homes.”
No matter how predictive analytics is put to use, it is clearly an imperative strategy for success going forward in the real estate business. “While predictive analytics has been around for a while in other industries, we are just starting to see its impact in residential real estate,” says Garland. “With faster processing, improved and expanded data sets, and the application of machine learning techniques, we are quickly moving from data-driven hindsight and insight to foresight. That is the promise of predictive analytics.”
“We look at where buyers come from; we look at their profiles and know where to target our marketing,” says MacDonald. “The more you can arm your agents with information about what happened in the past and what’s coming in the future, the better able they will be to serve their clients. HouseCanary’s predictive analytics allows the agent to stay relevant in their consumers’ eyes by providing them with valuable content.”
“At some point, if you aren’t using predictive tools to engage the customer upstream before they even realize they’re a customer, others will be, and they’re going to be working with the customer before you,” said Key Realty Broker/Owner John Murray during RISMedia’s recent Power Broker Forum at the REALTORS® Conference & Expo in Chicago.
“Used effectively, predictive analytics can be used as a fantastic ice breaker, attention-grabber, and call to action,” agrees Hetherington. “If we have the data and our competition doesn’t, it would be an incredible recruiting and retention tool.”
What’s Next for Big Data
As technology and data continue to develop at an exponential pace, HouseCanary’s trajectory stands to rise quickly—as do the benefits for real estate professionals and the consumers they serve.
“We are very confident that within the next five years, artificial intelligence (AI) and ‘big data’ will enable incredibly accurate automated valuations, leading to at least partial unbundling of the appraisal process,” says Stroud. “This will boost appraisers’ productivity, allowing them to appraise more homes in less time and streamlining the purchase process for consumers.”
For real estate professionals, it’s important to continue to look toward partners who can show them how to work with advancements in data and predictive analytics instead of trying to fight against the tides of change.
“With growing volumes and types of data, the greater the capability to produce valuable insights,” says Garland.” Organizations that capture and maintain these accurate data sets will be in control of a powerful crystal ball.”
Since hitting the market in 2014, HouseCanary has achieved several key milestones during its meteoric rise:
Source: RIS Media, December 3, 2017 (http://rismedia.com/2017/12/03/when-data-makes-difference/)
By Deborah Kearns
As other real estate portals focus on scaling and capturing more consumer traffic, Homes.com is focused on meeting the needs of the industry.
The company isn’t worrying about attracting tens of millions of eyeballs to its website. It has a vision that’s much more focused: to be a trusted friend of the industry while driving quality consumers to their advertisers.
Gaining—and keeping—credibility with brokers and agents can be challenging when competitors introduce features that can cut real estate agents out of the process completely. It’s no wonder there’s a certain amount of skepticism and fear among agents who are forced to pay to get leads back on their own listings.
But there’s no confusion about Homes.com’s motives.
Since its inception in 1992, Homes.com has connected buyers and sellers with professional real estate agents. It also offers direct exposure for agents’ listings without a pay-to-play expectation.
And that means directing all leads—whether a listing agent pays for marketing on Homes.com or not—back to that listing agent for each and every listing displayed on its site, says Homes.com President David Mele.
“Our business model is different; we want to be the broker partner portal that brokers can trust to not compete with them for business,” Mele says. “We’re not growing our brand at their expense.”
When brokers decide whether to advertise on portals with more than 100 million monthly views, it becomes a matter of diminishing returns, he points out.
“If you’re paying money to market your listings on a site with that many visitors, it’s like looking for a needle in a haystack to find the right buyers.”
With more than 400 employees spread among its headquarters in Norfolk, Va., and three other offices in Florida and California, Homes.com is growing at a measured pace.
Its focus on pursuing “transaction-ready consumers” instead of more passive shoppers makes Homes.com’s value impossible to discount, Mele says.
“Our core clients are real estate brokers and agents; we want them to trust us,” Mele says. “That’s why we have no plans to get into the real estate brokerage or sales business, and we’re up front about that.”
Keeping Agents at the Center of the Transaction
With a clearly defined business model that avoids stepping into the murky waters of real estate brokerage sales, Homes.com wants agents to know leads on their listings will always go to them. Simple concept, right?
But that’s a challenge to communicate when bigger portals blur those lines, says Andy Woolley, vice president of industry development at Homes.com.
“Unless you pay to advertise on some of those sites, you won’t get the leads on your listings,” Woolley says. “Many brokers don’t realize that.”
Brokers and agents who want the highest return for their advertising dollars should ask these three key questions before agreeing to advertise on search portals:
1. Do I always get free leads on all of my listings?
Don’t assume. “Some of the largest real estate portals don’t always do this and will require that the listing be upgraded for the listing agent to receive leads,” Woolley says.
“Brokers need to remember that, as the broker of record, they are in control—and have the power to turn publishing destinations on or off,” adds Woolley. “There must be a fair exchange where you (or your agents) are getting value back in return for providing the content.”
2. Will your website clearly list my name and contact information on all of my listings?
Another point of contention among brokers is that a listing agent’s name and contact information should be displayed on their own listings. After all, they’re investing time and marketing to sell the property.
But this isn’t always done on other search portals; you have to read the fine print of your contracts, Woolley cautions. On Homes.com, however, each listing clearly identifies the listing agent’s name, phone number, photo (when available) and a “listing agent” title to make it clear to consumers who they should contact about that listing, he says.
3. Do your listing pages display all of the property photos uploaded on the MLS?
Many MLSs no longer restrict the number of property photos you can upload with your listing, but search portals sometimes do. If all the listing photos are not being displayed, your listing could be missing out on potential buyers.
You worked hard to get the business, so make sure all of your photos are being displayed. If a portal limits the number of displayed photos, do you get any say in which images are used? (Another item to look for in the sales contract.)
Starting at the Source
You’ll find little disagreement among brokers and agents that listing data from the MLS is the most accurate and timely information about properties. After all, who knows listings better than the agents who are selling and marketing them?
That’s why, Woolley says, it’s important for brokerages and industry leaders to work hand-in-hand with MLSs. Doing so ensures that consumers get the latest and greatest data about listings on the market as easily and transparently as possible, Woolley says.
The majority of Homes.com’s listings are sourced directly from MLSs or franchise groups, with permission from brokers. The scale of Homes.com’s data aggregation effort is massive, with more than 3 million active listings and 45 million images processed from over 700 local sources. That effort requires significant technical expertise, coordinated with a diligent industry development program.
“There are so many MLSs, it’s difficult to coordinate with all of them,” Woolley says. “Each MLS is unique, not only in terms of their data formats, but also their expectations with respect to publishers like us.”
Homes.com is a big believer in the new Council of Multiple Listing Services’ nationwide campaign, “Making the Market Work,” which communicates the fundamental place the MLS holds as a guarantor of basic principles real estate professionals rely upon. Woolley is at the table as a partner and liaison to the industry, having recently been elected to the board of directors of the Council of Multiple Listing Services, or CMLS, which represents some of the largest and most influential MLS organizations across the country.
As business partner director for the Council, Woolley says his goal is to advocate for MLSs. Of course, it’s this type of visible leadership on pressing industry issues that helps reinforce Homes.com’s position as a friend to the industry.
Gearing Up for the Future of Home Search
You won’t see Homes.com in flashy TV commercials, because the company’s focus is on providing value to the real estate industry.
Instead of spending on mass marketing, Homes.com is investing in product innovation. In fact, they are in the process of completely rebuilding their website from scratch to deliver a best-in-class home search experience.
Most real estate sites greet users with a search bar that shows only a limited number of items buyers are looking for, such as the price range or the number of desired bedrooms and bathrooms.
Homes.com won’t mimic that tried-and-true and predictable experience. Instead, it will use artificial intelligence, or AI, to generate more precise listing-to-buyer matches based on less rigid filters and more personalized results.
“With AI, we can match the consumer to listings in order of ‘must-have’ to ‘nice-to-have’ amenities and features,” Mele says. “Consumers will get a tailored experience that adds value not only to them, but to agents and brokers, as well. By completely reimagining the site, more consumers will find homes they love, resulting in more quality leads sent to Homes.com advertisers.”
Other features of the new Homes.com include online collaboration and sharing that allows users to send listings to relatives or friends to view photos and details, and gather feedback on the homes.
All in all, Homes.com’s new consumer search experience will continue to keep agents at the forefront of the home-search process, and provide them more transaction-ready consumers for a quicker path to conversion.
Complete Marketing Partner
Real estate agents have to market listings if they want to get to the closing table with the right buyer. Homes.com provides exposure to a transaction-ready consumer audience to help agents do just that. In addition to advertising on Homes.com, the company offers marketing tools for modern-day agents—without abandoning the traditional emphasis on building personal client relationships.
One such tool is SEO Fuel, a marketing system that offers a two-pronged approach to help real estate websites rank higher in a search engine’s organic results, says Erin Ruane, Homes.com’s senior vice president of marketing and sales. The higher the ranking, the more likely a consumer will learn about and visit a website.
Homes.com’s SEO experts focus first on onsite optimization to make sure their customers’ content is relevant and crawlable by the search engines.
Secondly, the SEO Fuel program publishes relevant content for homebuyers and sellers across the web, linking those interested consumers to their customers’ websites, further driving interested traffic.
“Effective SEO is in demand because agents want high-quality traffic to their own websites as they face off against stiff competition,” Ruane says. “We’re focused on helping them level the playing field with SEO Fuel.”
Another popular marketing tool is Social Fuel—a comprehensive social media solution for effectively managing social media presence and online reputation for agents and brokers. The program posts regional content and manages Facebook ad campaigns on behalf of the agents. It also monitors the agent’s online reputation, gauging it against that of his/her competition.
“Social media is the new word-of-mouth,” Ruane says. “We offer Social Fuel to ensure our customers are able to have a conversation with their sphere of influence in a way that’s public, positions them as the market expert and translates into consumer inquiries.”
Here’s a list of other key marketing tools Homes.com offers:
Lead Concierge – The service screens inquiries on the agent’s behalf, and will live transfer interested buyers and sellers directly to agents so they never miss a chance to convert an inquiry into a prospect.
Homes.com Fusion websites – These websites are built on a responsive design platform created specifically for real estate, Ruane says. The websites feature simple yet powerful search options, including map search, detailed neighborhood reports, large photo display, and easy save-and-share options.
.Homes domain names – A new offering, .Homes is the perfect domain name extension for agents or brokers who want a more intuitive URL for their business website. Having a truly unique URL is becoming more difficult, as domain names with a traditional .com extension are harder to secure. The .Homes domain names are also exclusive for use within the real estate industry with only validated, real estate-related businesses allowed to purchase and use the .Homes domain extension.
Local Connect – On Homes.com, this advertising product helps agents connect with active buyers and sellers in their target market, by zip code. When buyers and sellers are ready to connect with a local expert, Local Connect puts agents in the right place at the right time to receive those inquiries.
Featured Agent/Broker – This program prominently brands the agent/broker and their listings on the search results page of Homes.com, while driving traffic to an agent/broker’s listings, website, and social media accounts through direct links and calls-to-action.
Putting Your Brand, Knowledge on Display
Since 2005, Homes.com has powered remax.com, the RE/MAX® brand’s consumer-facing website, and has listing display agreements with all the Realogy brands, along with other major brokerages throughout the U.S. and Canada.
The value proposition to these enterprise partners, as Woolley calls them, has always been constant: drive their agents as much business as possible—even if the lead comes directly to Homes.com. The goal is to always direct those leads downstream from Homes.com to a broker or an individual listing agent.
The big portals—Zillow, Trulia and realtor.com®—operate as consumer companies with an outward-facing brand. But having too much control over consumers’ exposure to listings can hurt rather than help the industry, explains Woolley.
“If you’re a broker or agent, you want to leverage your presence on a national website to drive buyers and sellers downstream to you, but that’s not how all big portals want the process to work,” Woolley says. “We’re not worried about keeping every consumer on Homes.com for life; otherwise, we wouldn’t bother offering agent or brokerage websites. Before you advertise on Zillow or Trulia, ask what’s more important to them: your brand…or theirs?”
Source: RIS Media, November 5, 2017 (http://rismedia.com/2017/11/05/which-real-estate-portals-can-you-trust/)