With the plethora of available real estate data online, it is Realtors’ responsibility to educate buyers and sellers about the different valuation models and data available, according to panelists at a property valuation forum here at the 2014 Realtors Conference & Expo.
The speakers addressed the challenges of educating consumers regarding the differences between actual appraisals versus automated valuation models (AVMs) from online real estate search sites, helping them to discern the facts about Broker Price Opinions (BPOs), and Comparative Market Analysis (CMAs), both of which are keys to residential transactions.
Panelist John Anderson with Twin Oaks Realty Inc., said confusion often arises when buyers and sellers conduct research online and draw conclusions from property valuations based on AVMs – a computer generated pricing report – before speaking to an agent.
“AVMs are designed to help consumers become aware of current market conditions and availability of property and are not meant to be an appraisal. Realtors® have a responsibility to educate consumers about the differences in valuation models and available data. The lines can be blurred between everything that is out there.”
Some AVMs are missing information
Marty Frame with Realtors Property Resource® added that some AVMs are missing direct information from an MLS and don’t have the ‘human touch’ that can make adjustments for home upgrades such as granite countertops or a finished basement. They may also include homes that are not good comparables, he said.
Frame added, “RPR’s AVM is different from others in the marketplace, because it uses MLS data that is updated every 15 minutes.”
Panelists weigh in on BPOs
BPOs are often used by lenders and mortgage companies to avoid the expense or delay of an appraisal and are often completed by real estate professionals and not licensed appraisers.
According to the panelists, when working with clients to list their home or make an offer on one for sale, running a CMA is much closer to what an appraiser will do when he or she performs an appraisal for potential buyers who plan to apply for a mortgage. CMAs give an overview of what is actually happening in a particular area, such as the percent of list price that sellers are receiving, current inventory in the area and days on market for similar properties.
Melanie McLane, an appraiser with Jackson Real Estate Group, said comparables are the building blocks for all kinds of valuation reports, but it’s important to know which ones to use. “Ideally, comparables should be within a one-mile radius, but that’s not always possible – especially in more rural areas of the country. Comparables further away are OK if they are the only ones available.”
How to actually help consumers
On the topic of making the right price adjustments, the panelists agreed it’s necessary to help clients understand the difference between actual improvements and upgrades – such as a new garage – versus necessary maintenance, such as a new furnace or roof. Furthermore, knowing the price range of properties in the neighborhood will help determine how much of an adjustment to make for improvements.
The session concluded with a discussion about the challenges of communicating to sellers that the price appraised on their home when they purchased it five years ago may not be an accurate comparison to the value of the home today.
“An appraisal is a snapshot of a certain period of time that depends on several economic factors,” said McLane. “Values change and it’s up to Realtors® to work with their clients to manage their expectations and serve in their best interest.”
The rapidly evolving listing syndication ecosystem [video]
Real estate listing syndication remains top of mind, and things are changing quickly. Today, we talk about the pain points of syndication, what brokers and MLSs should be asking, and what to expect in the near future.
Listing syndication remains top of mind for most practitioners, as most boots on the ground now understand the basic math behind the process (insert listing here, make it go there). The moving parts of this equation are rapidly changing, and the listing ecosystem is evolving.
At the forefront of that evolution is ListHub, which combined with the newly acquired Point2, powers syndication for over 80 percent of listings in the U.S., adding 800 broker accounts each month. They are provide listings to over 130 publishers, like Zillow and Trulia, and as a company, makes zero decisions about listings, simply providing the technology framework to enable brokers to make the decisions and ensure the data protections are in place.
In the following video, we chat with Celeste Starchild, the Vice President and General Manager at ListHub who succinctly addresses the primary pain points of listing syndication, and what brokers and MLSs should be asking themselves when it comes to their syndication needs.
Starchild also discusses the potentiality of the single platform theory, and how ListHub aims to improve industry productivity.
Digging deeper into listing syndication
Learn more at NAR convention
On November 8th at 9:00am in Room 228 at the Morial Convention Center at the National Association of Realtors Conference, Starchild will be presenting on “Connecting All Your Systems With a Single Platform.”
Brokers will learn more detailed information on the topics addressed below, how to think about them and apply them for their own situations, and walk away with three things they can immediately implement to ensure they’re taking advantage of the rights and opportunities regarding their listing content.
This video has been brought to you by ListHub. Be sure to visit Starchild at the NAR Conference this coming weekend.
FindTheBest Homes launches as “the most comprehensive real estate research engine”
FindTheBest has launched a home research tool that has tremendous traction prior to its launch and offers insanely useful tools.
FindTheBest.com launched three years ago as a research engine, offering detailed information on thousands of topics, explained in human terms so that if you want to compare an iPhone to a Samsung Galaxy, you learn about the value, not just two spec sheets side by side. The company has now launched FindTheBest Homes, to give the “fullest understanding of any property,” with over 105 million homes for sale, foreclosed, and not-for-sale properties.
“Every home has a story, and today’s real-estate search solutions are only able to tell a fraction of it,” said Kevin O’Connor, FindTheBest CEO. “We’re aiming to connect the dots and give researchers all the information they should know not just about their house, but the surrounding context that makes that house a home.”
With nine people and six months, this team created a beautifully designed product that not only allows consumers to compare homes side by side, but offers extensive research data and market conditions presented graphically as well as in a narrative with non-jargon terms, appealing to all types of buyers, not just the data nerds or just the creatives.
They claim to provide more property attributes and transaction history than other real estate websites, and their proprietary local content gives researchers a “more complete picture of what it’s really like to live in a home.”
Consumers can expect intuitive market analysis and learn how a home’s features like lot size, price, or living space, compare to other properties in a given area.
How do they do all of this?
Through partnerships with CoreLogic, ListHub, Maponics, and others, FindTheBest has partnered with the direct data sources right out of the gate. The section entered pre-launch three months ago, and without any advertising push, they’re already seeing over one million visitors a month. ONE.MILLION. Without trying.
They believe they’ll get to four to five million visitors a month by the end of the year, and we suspect they’re right, because they’re not counting on the practitioner to spread the word, rather, they have a popular platform where users are already in research mode – a huge win.
Take a look at just one listing in Beverly Hills, California:
What practitioners need to know about this sleeping giant
The team was honest about their competing with Zillow and Trulia, but it doesn’t sound like they will be hiring real estate evangelists or kissing influencer ass, rather, they’ll be talking directly to consumers because they already have those eyeballs, and they’ll be reaching out to brokers to opt in to syndication via one tiny button in their ListHub panel.
Currently, listings cannot be edited or manually uploaded, but the team says users will be able to submit edits when information is inaccurate or out of date. It sounds to us like the ability to upload listings will be coming in the near future.
In non-disclosure states, the language differs in the property information, offering “estimated taxes” and the history excludes sales price data, but includes sales dates and even dates a property was refinanced.
Homes do not have ratings. The forefathers of real estate have tried to open addresses up to being rated or reviewed, but at this time, the company doesn’t offer that as a feature, despite being a ratings platform – there may be confusion, but the many, many users are not using the site for that reason (to give ratings), rather than to absorb information.
There are no featured listings. All listings are equal, period. You cannot pay to game the system. Listing agent data is at the foot of the page as is tradition, and instead of hiding all of the information behind registration walls, the name and phone number are immediately visible, and clicking “View Email” presents the email address without changing pages, and even offers a link directly to the listing page on the broker’s site.
One of the coolest things ever since ever
FindTheBest offers something wicked awesome that really impressed us – each section of information and market analysis can be embedded on your site through FindTheBest Places, which offers context to your listings that many IDX companies or reasl estate search companies fail to offer. When blogging about a new listing, go grab some of the embed codes of market data and include them in your post to add a ton of useful information to tell the story of your listing.
Take for example the detail page for Hyde Park, a cool neighborhood in Austin. Hover over any section and you’ll see a grey link icon subtly pop up on the left hand side of the page, indicating an embeddable section.
Sections you can embed include graphs and written explanations that compare each of the following metrics with the surrounding area:
- School ratings
- Commute times
- Education levels
- Ownership rates
- Language spoken at home
- Family size
- Median sales price
- Median listing price
- Days on market
- Owner costs (mortgage)
- Rent prices
- Economic profile
- Natural disaster risks
If any of these are missing on your site, go pull it for free from FindTheBest, and simply copy/paste the information into your own site. Bingo.
An honest look at FindTheBest’s advantages and disadvantages
FindTheBest is brand new this week, they’re a baby in the industry, but they’re launching with an understanding of research that some of their competitors are still struggling to understand, nearly a decade into their existence.
A massive advantage they have is that they’ve had to sit down as a company and consider the complexities of over 2,000 topics, and having considered things as complex as how to compare the habits of birds and how to compare H1-B Visa stats, and even how to compare ingredients of foods. They assert that humans are consistent, and that a lot of topics are interconnected – in other words, it doesn’t take a real estate insider to solve the complex issues like geocoding, it may just take data nerds.
FindTheBest Home’s main advantages are that they are a very lean team with an eye for design and data detail, and they’ve spent that last three years engaged in providing research data to consumers, no matter the product or item, be it animals, foods, cars, phones, or even properties.
While they’ve unraveled the complex and offered context to consumers, they suffer from a disadvantage – being new. This means that while they have property data on millions of addresses, they only have around one million active listings. They’ve partnered with ListHub to receive listings, so all brokers have to do is go flip the “on” switch in their ListHub dashboard, but FindTheBest has to be a blip on their radar so that brokers large and small even know they exist.
So, are they the next Zillow? They forecast property values and compare homes, but if they continue on their current path without taking any bizarre detours, they could quietly come in and erode some hard-earned market share in the real estate industry. Will practitioners embrace them and use the data, ignore their existence, or buck the idea that their data is pretty and presentation style is damn impressive?
Gary Keller’s neighbor opts to FSBO instead of list again with KW
Keller Williams’ Co-Founder’s neighbor goes FSBO after listing years prior with a KW listing – what does this say about the industry?
Gary Keller founded Keller Williams in 1983 with a single office in Austin, Texas, where he still resides in a gorgeous home in a quiet neighborhood in the hill country. Not all properties in the neighborhood are as upgraded as his family home, in fact, some are very small older homes on desirable lots, selling for hundreds of thousands over what they paid for them, simply for the land where they sit.
Enter Gary Keller’s neighbor whose driveway is across the street from his – In November 2008, the property was listed for sale with a Keller Williams agent for $490,000, the price was dropped to $465,000 in January 2009, and the listing was removed later that month.
Choosing not to hire an agent
The owners stayed, and recently, they listed the property on Zillow as a For Sale By Owner without an agent.
There are a couple of different possibilities here, as this could be indicative of a trend that consumers are posting directly, while others know it is possible that the owners are simply willing to wait it out, having doubled their asking price in a much more improved market than 2009 offered.
It’s possible that it isn’t a personal swipe against Keller Williams, and the owners could be choosing an alternative path for reasons that have nothing to do with KW, but some people are choosing to translate this move as an anti-agent or anti-KW moment.
On the flip side
Some time ago, we broke the story on AGBeat.com that the ForSalebyOwner.com founder gave up on his own listing and hired a real estate broker, and speculation varied equally back then. His decision wasn’t necessarily a statement against FSBOs either, but it provided an alternative view into the state of the industry.
Does Keller’s neighbor’s home being listed as a FSBO on Zillow mean an insult to the industry, or is it simply a shift in attitude of consumers who want a bigger piece of the pie?
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