Editor’s Note: This was originally posted on RISMedia’s blog, Housecall. See what else is cooking now at blog.rismedia.com:
In this second article in a three-part series, learn how realtors can use predictive analytics to make positive changes and predictions in their business.
You are always looking for ways to show your value and stay ahead of the market. One way to do this is to use predictive analytics.
As we explained in a previous article, predictive analytics is nothing new, but real estate professionals have been slow to adopt it, experts say. With so much relevant data at your fingertips, from consumer demographics to housing trends to historical property prices, predictive analytics gives you an edge in a competitive landscape. Here are some specific ways to use it in your real estate business.
Give more confidence to buyers and sellers
The most relevant way for agents to use predictive analytics is to target the right customers for their marketing efforts in order to find the right types of buyers for specific ads. This allows you to focus on your strengths: negotiation and relationship building.
Rudy Pierre used HouseCanari for about a year. YellowBrick Real Estate’s real estate agent in Stamford, Connecticut, says he uses predictive home price forecasts to give buyers more confidence in their investments. The data helps bullet his logic when suggesting a listing price that sellers might disagree with, he adds.
When you can identify where the most up-to-date comparables are, in which direction the prices are moving and show the numbers to the sellers, Peter says, “It’s hard for sellers to argue with you… I’ve seen a slight increase ads because I’m showing them something that no one else is.
Gone are the days of agents leading buyers on tours to highlight a home’s features; buyers can find most of these details online. However, when you share predictive data reports with them, you add value to their lives, says Stan Humphries, chief analytics officer and chief economist of the Zillow Group.
Agents who use predictive analytics in their businesses make an instant impression on potential customers, he adds.
“The difference between a poor agent and a great agent is magnified by technology, because you are using tools that have more impact,” says Humphries. “Great agents are using the technology to move the needle.”
Find motivated owners to sell
Jay Macklin loves what predictive analytics does for his business. The RE / MAX Platinum Living broker / owner in Scottsdale, Ariz uses SmartZip analysis to target homeowners who may be more likely to sell their homes.
The service pulls data from the U.S. Census to track the lifecycle of salespeople based on public records, such as divorces, deaths, and marriages, Macklin explains. From there, the algorithms can predict a certain percentage of homeowners who are most likely to sell their homes, so agents can call them (using homeowner scripts) to gauge their timing and seriousness.
“Many agents will hear from people who want to know what their home is worth, but that doesn’t tell them if someone is ready to sell their home,” Macklin says, adding that agents can better “get the message across” in their marketing campaigns. .
Another smart use of predictive data is to pair sellers in the field whose homes aren’t (yet) on the market with the right buyers ready to bid, like pocket ads. This strategy can also be applied to expired and canceled ads and FSBOs, Macklin explains.
Worth the investment
The costs of the predictive analytics program may vary depending on how much (or how little) data you request and whether or not you are requesting proprietary algorithms for the specific needs of your market. Macklin says his agents close an average of 10 transactions per year using predictive analytics. With an average selling price of $ 425,000 to $ 450,000 in the affluent Scottsdale market, that represents significant commissions, he says.
Pierre agrees. The time he saves through predictive analytics more than pays off as he can spend more time with clients and negotiating deals, he says.
“Previously, I had to manually pull properties from MLS and spend most of the day before an appointment preparing for an ad presentation,” Pierre explains. “Now I can do it in a few minutes and go out. It makes you look smarter than the average agent, and the time I save using it is golden. “
Stay tuned for the final part of our series, which will look at specific ways brokers can use predictive analytics to recruit and retain top agents.
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