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Big Data, Big Opportunities: How Predictive Analytics Is Changing the Business of Real Estate

Sep 24, 2017 by

“This year the human race is producing more data than the previous 5,000 years combined. Data is so powerful that in the future, nation states will fight over it for power.”

This thought-provoking statistic set the stage for a much-anticipated panel discussion at RISMedia’s 2017 Real Estate CEO Exchange in New York on how brokers are leveraging the application of predictive analytics and big data in their businesses to better serve consumers’ real estate needs.

The opening remarks, presented by panel moderator Dave Garland, partner, Second Century Ventures and director of Strategic Investments for the National Association of REALTORS®, led the way for an engaging discussion with several industry leaders on the forefront of using predictive analytics and big data in real estate to change the way their business is being conducted now and into the future.

So what is predictive analytics, and why is it so important to the real estate industry? Simply put, “Predictive analytics is analyzing extracted data, using old data to predict the future,” Garland explained. “The big difference now is we have new data points that we can apply to our industry. We’re moving from the idea of hindsight to insight to foresight.”

The idea of using data in real estate isn’t new—think tax records, comps, valuations, or even local school, business and crime statistics. But with consumers demanding more and more information, and more data being available on consumer behavior than ever before, the use of predictive analytics—being able to accurately show buyers and sellers what their home will be worth in the future, backed up by data science—is the game-changer.

“‘Big data’ sounds like it’s really far out there, but earlier today I had a meeting downtown and on my phone, it said it’s going to take me 28 minutes to get to the next place I was going, and here’s an Uber so you can get there,” said Jeremy Sicklick, co-founder and CEO of HouseCanary. “The fact that it knew where I was, where my next meeting was and what the traffic was, and linked to an Uber to get me there—that is predictive analytics. So what does that look like in real estate over time?”

HouseCanary CEO and Co-Founder Jeremy Sicklick discusses predictive analytics during RISMedia's 2017 CEO Exchange session "A Better Crystal Ball: How to Leverage Predictive Analytics."

HouseCanary CEO and Co-Founder Jeremy Sicklick discusses predictive analytics during RISMedia’s 2017 CEO Exchange session “A Better Crystal Ball: How to Leverage Predictive Analytics.”

San Francisco-based HouseCanary is a real estate analytics company using data science to accurately value and forecast over 18,000 U.S. zip codes, 3 million blocks and 100 million properties.

Sicklick said one of the key opportunities predictive analytics provides in real estate is having the ability to know the property value of a home, and knowing where the value is going to go, to help consumers make better home-buying and -selling decisions. HouseCanary’s home value reports also allow users to add or remove properties or property details to instantly adjust a home’s comparable value, for example, or add a bathroom or remodel the kitchen and see how that affects the home’s value.

Arming the agent with that kind of statistic-based data science is key in working with today’s real estate consumers, he said.

“When is the right time to sell my home?” Sicklick said. “We said, ‘Let’s look at the data and see what’s really happening here.’ We now have enough information to help them make those decisions. Should I improve my home, sell my home or refinance? Being able to quantify and visualize it is where big data is going. Being able to show people and arm people with the ‘why’ it’s occurring and explain it to someone who is trying to make a decision—and putting brokers and agents at the center of those decisions to help [buyers and sellers] see their options—that’s the opportunity.”

Mark Choey, co-founder and CTO of the innovative boutique firm Climb Real Estate in San Francisco, emphasized the importance to brokerages of collecting data on buyers and sellers, noting the many tools available now to help the effort. “I wouldn’t recommend hiring a data scientist,” he said. “There are a lot of tools out there to help you get started.”

One of those that he uses is the Gmail extension Crystal, which uses personality detection technology to predict behavior and help businesses communicate with their clients in a more customized way, based on their personalities. Their tools use the DISC assessment, which uses four primary personality types to determine behavior: dominant, influential, steady, and calculating.

“I used the system before sending an email to someone I didn’t know, and it showed that the person likes their time respected and speaks in short, concise statements and bold language,” he said. “I wrote my email like that and got a very positive response. That’s one example of a great tool you can use to increase sales conversion.”

He also noted, “The No. 1 question people ask is, ‘Should I buy now?’ or ‘Should I sell now?’ so arming agents with data and historical context is important. When we get leads, the No. 1 thing an agent asks is, ‘Who is this lead?’ These types of new tools out there can help figure out who these people are.”

With technology innovation at his company’s core, Choey said Climb also utilizes social media data to better understand clients, and is constantly testing different tech platforms to achieve higher conversions.

“Most everyone here represents a brokerage that has been using lists for a long time,” he said. “Now we have much easier automation, more refined information, combined with good valuations. We can see if offers are coming in above or below where they should be. We can inform [buyers] and say take it and run or hold off for a better offer. At any one time we’re testing out 10-15 different technologies for widgets, apps, CRMs, landing pages, different listing sources. We look at lists from CoreLogic and constantly benchmark it against our own data. Our goal is to constantly improve sales conversions and we work on it all the time.”

From L to R: Key Realty Managing Broker/President John Murray; RE/MAX Gateway Broker/Owner/President Scott MacDonald

From L to R: Key Realty Managing Broker/President John Murray; RE/MAX Gateway Broker/Owner/President Scott MacDonald

John Murray, managing broker and president of Rockford, Ill.-based Key Realty, echoed Choey’s support for brokerages utilizing data tools available, rather than hiring a data scientist.

“One of the core competencies of our brokerage is to help improve conversion to do more sales,” Murray said. “We have leads coming out of our eyeballs, but what do we do with them? Companies providing predictive analytics are emerging and some are better than others. If you don’t have the expertise, you can work with these companies. Some bigger shops are hiring data scientists, but the majority of brokerages should focus on how to use the data and work with these companies to improve their data—then everyone wins.”

He added, “Data is great, but it’s all about how you use that data to find out what’s important to your clients.”

Scott MacDonald, broker/owner and president of RE/MAX Gateway in Chantilly, Va., agreed, explaining the use of data in real estate, like social media data, can be effective, but only if it’s used in the right ways.

“We look at where buyers come from; we look at their profiles and know where to target our marketing,” MacDonald said. “But it’s not only knowing what to look for, but how do we use it effectively?”

MacDonald said it’s all about giving agents the best tools to use, especially given the competitive complexity of the industry today. “You have the discounters, the disruptors and the DIYers,” he said. “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.”

In an industry where valuations have been called into question, Murray also commented that while the accuracy of data is paramount, so is the industry’s ability to interpret it for real estate consumers.

“It’s the utilization and interpretation of the information that we can all do in our businesses to restore some credibility to the industry—we’ve lost some of that,” Murray said. “Data is readily available and we have to be better at interpreting what it means. If we stick to being brokers and focus on customer service and restore our credibility with knowledge, it will help us recapture some of the credibility we’ve lost.”

Choey added, “There is a lot of talk about Zestimates, Redfin and realtor.com®. What we train our agents to do is take those three and bring them to a listing appointment as the basis for discussion. The challenge is consumers have all the data in the world and know everything you’re doing as an agent. Everything is out in the open. So we really try to advise agents to use the data, and help sellers and buyers analyze the data.”

Big Data Lightning Round Q&A

To close the session, Garland proposed a “lightning round” of big data questions to the panel.

What data is concealed today but will be revealed tomorrow?

Murray: Offer data
MacDonald: Instant offers
Choey: Pre-MLS, off-market data—knowing when a seller is going to sell before they sign a listing agreement
Sicklick: Really understanding days on market

What is the most important dataset for a thriving brokerage of the future?

Choey: Our agents’ happiness
MacDonald: Agent engagement. Their level of engagement is critical.
Murray: Buyer-seller propensity
Sicklick: Understanding current and past customer equity. In knowing how much equity they have, you can help them figure out what to do next.

What is the most important buyer data?

MacDonald: It goes back to price.
Murray: Buyers are looking for deals.
Sicklick: Price of property today and price at highest and best use so they understand what they are buying and what the opportunity is
Choey: Buyers want to know what the seller is going to accept.

What will be the most indispensable tool five years from now?

MacDonald: Tools that help agents communicate on a deeper level with clients about property condition. To know the value if they improve the kitchen by $ 50,000 or finish their basement. Tools that will help the buyer know more at a deeper level.
Murray: Workflow and tasking software that allows agents to scale in a more automated fashion.
Choey: Happiness customer score—what button can I push to make the customer happy
Sicklick: Doing our job

Sicklick offered some closing thoughts to industry leaders about the importance, and the future, of big data, not only in real estate, but in so many aspects of our daily lives.

“I get to see it through the eyes of my kids every day and how they learn. If they have a question they look it up on their iPad. They’re learning in a different way. It’s at their fingertips to search; they teach themselves. We have the first generation of people coming of age who don’t remember AOL or Prodigy. They grew up with everything at their fingertips. The way they research, buy things, get a loan, engage with people, is all really different from even 10-20 years ago. They are just going to expect it.

“How do we bring that data and capability to the next generation? This is how they want to do business. It’s just a different world now. Data is the first part of that that enables people to streamline transactions in ways we haven’t seen yet.”

Stay tuned to RISMedia for continuing coverage of this year’s CEO Exchange sessions:

Beth McGuire is RISMedia’s online managing editor. Email her your real estate news ideas at beth@rismedia.com.

For the latest real estate news and trends, bookmark RISMedia.com.

The post Big Data, Big Opportunities: How Predictive Analytics Is Changing the Business of Real Estate appeared first on RISMedia.

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Changing Lives: More Than Just a Home Inspection

Dec 4, 2016 by

Innovation primes Pillar To Post Home Inspectors® for future success

Every industry needs a leader.

A simple—yet profound—statement, it’s a driving force for everyone at Pillar To Post. With 23 years of experience under its belt, the home inspection company has helped nearly 3 million families move into homes over the years. But as the needs of the industry and customers continue to change, a good home inspection is no longer good enough. “We have to address the needs of the real estate professional and buyer or seller in a holistic way,” says Dan Steward, Pillar To Post’s current CEO. For Pillar To Post, doing so boils down to being deeply engaged with both sides of the equation and fully committed to acting as a trusted advisor to everyone the company serves.

Laying the Groundwork for Continued Success
The largest home inspection company in North America—a title held since 1999—Pillar To Post currently has over 550 offices in 49 states, as well as nine provinces in Canada. Tracking toward a goal of 1,000 offices by 2020, the team at Pillar To Post is steadfast in its commitment to delivering leadership and drive into the real estate industry.

“While home inspections have been part of the real estate process for 35 years, today they’re integral to the transaction of residential real estate,” says Steward, who goes on to explain that the home inspection industry has come a long way since its inception.

“What began as an industry made up primarily of retired homebuilders, the home inspection industry has evolved into a more organized element of the real estate industry today,” adds Steward.

And Pillar To Post has been at the forefront every step of the way.

The first to establish a curriculum for selecting and training franchisees, create a home inspection protocol/report and computerize the report and include color photos within it, Pillar To Post was also ahead of the game when it came to offering inspection packages to serve the unique needs of buyers across the country.

Delivering an Exceptional Experience
For Pillar To Post’s Vice President of Marketing and Customer Engagement Ken Blackburn, there’s a specific reason behind every company’s decision to be in business. And for Pillar To Post, changing lives is the name of the game.

“Everything we do as a business is focused on helping the agent deliver an exceptional experience to their clients,” says Blackburn, positioning Pillar To Post as a key and trusted piece of the agent team.

Blackburn points to four key parts of the company’s value proposition that enable Pillar To Post to deliver a great brand experience to buyers and sellers via real estate professionals, beginning with the on-site production of an inspection report immediately following the inspection.

Not only does walking the client through the report then and there allow for questions to be answered, it also lays the foundation for providing a level of confidence that’s instrumental in moving the transaction forward.

“Delivering reports on-site may seem old-fashioned, but there’s incredible technology that goes into it, all of which is used to fulfill the needs of both the real estate professional and the consumer,” says Steward, who notes that clients are encouraged to be present during the inspection.

The next step toward adding peace of mind to the process comes in the form of E&O insurance, something each inspector carries. “If something goes wrong, our insurance covers the inspector, the agent and the broker,” says Blackburn, “leaving the agent with nothing to worry about.”

Blackburn also points to the company’s extensive continuing education program for agents as a key piece toward ensuring a great experience from beginning to end.

With 34 different topics available that touch on everything from home renovations and repairs to remodeling and even radon gas and wet basements, the training provided through Pillar To Post goes a long way toward adding to the agent’s perceived value to the client.

The company recently launched a learning management platform that allows Pillar To Post to continue to focus on ongoing education among their franchisees and inspectors. “With the ultimate goal of expanding the platform to be used among real estate professionals, agents can quickly and efficiently get the information they need, rather than wait for a Pillar To Post franchisee to come to the office for a live training session,” says Steward.

Last but not least, the company has made scheduling home inspections simple. “No matter how an agent wants to connect with us—whether it’s via phone, email, online or smartphone app—we have them covered,” says Blackburn, which is important to today’s agents, as it positions them as both professional and in control when working with buyers and sellers.

“The technology that’s built in behind the scenes of our booking app plays into the overall theme of how we can best serve real estate professionals,” adds Steward. “With 24/7 access, agents have the ability to view the schedule of their favorite inspector, as well as the schedules of all Pillar To Post inspectors in a given service area.”

Keeping Pace with Buyers, Sellers and Real Estate Advisors
Value proposition aside, Steward points to Pillar To Post’s customer focus as one difference-maker that continues to drive the company’s success year after year.

“We know that what we do affects people’s lives. If we don’t deeply understand and engage with the emotions involved in the process of buying a home, we’re not being a good professional advisor,” says Steward.

Performing both pre-purchase and pre-listing inspections, the team at Pillar To Post is dedicated to providing highly valuable information to each party involved in a transaction, a feat that can only be accomplished by understanding the unique needs of real estate professionals, buyers and sellers.

“On the industry side, we’re deeply engaged through research and industry involvement so that we can get the necessary feedback in order to focus on and serve the needs of real estate professionals today and into the future,” says Steward.

The same can be said for the consumer side of the equation, where consumer-driven research is used to develop services and experiences to fulfill the needs in the journey of buyers and sellers.

“The better we understand what’s driving a client’s experience, the better we can put the right services and experience together,” adds Steward, who goes on to explain that being able to effectively communicate with those they serve is a key piece of the puzzle that can’t be overlooked.

Being in the information business, everyone at Pillar To Post is committed to keeping the lines of communication open among buyers, sellers and their real estate advisors so they can make informed decisions and have peace of mind with the decision they ultimately make.

“Sense of care is so important to us—whether we’re interacting with the buyer, seller or their real estate advisor—so we have to be there with empathy and passion for the situation in order to deliver an experience that’s second to none,” says Steward.

With the Right People, Everything Is Possible
With a customer-focused approach to everything they do, having the right people in place across the board is crucial.

“We can’t hold the customer at the center of our world if the people serving the customer don’t also believe that,” says Steward. “Therefore, we focus intensively on selecting our franchisee partners. We are determined that they fit into our culture and share the same vision and passion we do for the brand.”

Lorri Ratliff, a Pillar To Post franchisee in Southwestern Washington, is one such partner.

“Being part of the Pillar To Post franchise system allows us to really focus on the home inspection experience with our clients and REALTORS®. The franchise system provides an excellent core structure for business owners (franchisees), allowing us to build and grow our marketshare,” says Ratliff, who can’t say enough about the ways in which Pillar To Post’s brand experience differentiates them from the rest of the pack.

“Pillar To Post fosters, through their systems and support structure, a methodology for us to stand out as the best home inspection company in North America. Our clients love the variety of services we offer and the fact that we’re easy to do business with,” adds Ratliff.

“Everything we’ve learned throughout our history, and the way we’ve anchored ourselves for the future, is entirely about our front-line people,” says Steward, “underscoring the importance of knowing that our reputation is everything in an industry where we’re looked to as trusted advisors.”

Innovation and Technology Set to Rule the Future
With a true focus on those delivering the service day-in-and-day-out, the future is looking bright for Pillar To Post as the company prepares to raise the bar even higher.

“There are a bunch of rapidly changing dimensions in the inspection world,” says Steward. “Whether it’s the aging housing stock, the expansion of technology found within homes, the vast needs of buyers and sellers when it comes to information, growing concerns about healthy homes and the environments in which we live, in addition to concerns about energy efficiency overall, Pillar To Post’s long history of innovation will continue to fuel the future as we look at the core issues in housing in America throughout the next decade.”

One thing that won’t change? Pillar To Post’s focus on technology, and its role as the core in everything they’re doing today—and well into the future.

To that end, the company has made a massive investment in technology in order to plug in more completely with the real estate process.

In fact, Pillar To Post recently made a change to the technology platform they use to conduct home inspections, allowing for heads-up inspecting through the use of iPads.

“We’re truly excited about this concept,” says Steward, “as it’ll allow our home inspectors to engage more readily with the client as they make their way through the inspection process.”

Pillar To Post is also looking forward to increasing their use of data when it comes to looking at the evolution of closings and transaction management software.

“We touch hundreds of thousands of people a year in what we do,” concludes Steward. “It’s an incredible responsibility because people are counting on us to do good work, and it’s an incredible honor as a brand when it comes to the responsibility we hold in helping real estate professionals and their clients.”

Indeed, one such professional, Executive Vice President of RE/MAX, LLC, Mike Ryan seems to agree.

“When it comes to home inspections for new purchases or listings, Pillar To Post is always at the top of the rankings. Pillar To Post Home Inspectors® has been a RE/MAX Approved Supplier for a long time, and our agents and brokers value and appreciate the service they deliver to our customers.”

Download a sample inspection report here.

For more information, please visit www.pillartopost.com.

Paige Tepping is RISMedia’s managing editor. Email her your real estate news ideas at paige@rismedia.com.

For the latest real estate news and trends, bookmark RISMedia.com.

The post Changing Lives: More Than Just a Home Inspection appeared first on RISMedia.

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Four Ways Millennials Are Changing the Real Estate Industry

Oct 23, 2016 by

Millennials have grown to represent 32 percent of homebuyers, which is the largest portion of the home-buying market. According to millennial Austin Hale, product manager for real estate investment software company Realeflow, “Millennials present an entirely new dynamic in the real estate market. [They’re] much more likely to rent, to congregate in urban areas, and to be cautious when taking on debt.”

The purchasing and lifestyle habits of millennials shape the economy and affect everything from the energy market to how TV is made. Real estate professionals need to understand the effect millennials have on the real estate market, so here are four things to know about millennial homebuyers.

  1. Millennials Prefer to Rent

The millennial generation favors renting over buying property for a number of reasons. They wait to commit to homes; desire to live in trendier, more expensive areas; or want the freedom to pick up and go with relative ease. A survey found that 10 percent of millennials don’t feel ready to manage a property and prefer having a landlord to take care of maintenance issues.

Effects on the Real Estate Industry: Millennials may start investing in home equity as they get older, but rising debt and delayed life events make it more difficult for them to settle down and invest in property. As a result, millennials look to lower barriers to entry into real estate, including buying rental units and condos they can rent out if they move away.

  1. Millennials Search for Themselves

Millennials are tech-savvy and more likely to look for housing online than through an agent—50 percent of millennials found homes using the internet compared with 31 percent who found homes using an agent. Almost all millennials still use a real estate agent or broker to purchase a home, but they prioritize those with websites that include photos, interactive maps, and detailed home information.

Effects on the Real Estate Industry: Real estate professionals need to have websites that include many high-quality photos—as exemplified by successful home-searching sites such as Hubzu and Trulia. Real estate companies with weak online presences are less likely to be successful with the millennial generation. It’s also valuable to have a strong presence on social media that shows you’re engaged and able to speak their language.

  1. Millennials Seek Out Small, Efficient Spaces

Many millennials like the ideals of minimalist living—fewer possessions and smaller spaces—because it provides them with the flexibility and financial stability they crave. Similarly, they also value energy-efficient appliances to help keep their bills and carbon footprints low. Millennials are comfortable in small spaces because they see their living quarters as a home base, not necessarily where they want to spend all their time.

Effects on the Real Estate Industry: Real estate agents must be familiar with smaller floor plans and understand the benefits of limited living spaces. The more multi-functional and environmentally friendly a space is, the more likely it is to appeal to millennials. The industry will need to keep increasing its green home and energy-efficient property offerings.

  1. Millennials Don’t Shop Around for Real Estate Agents

Working with real estate agents is a new venture for many millennials, 23 percent of whom are unaware that they can negotiate a real estate agent’s commission and fees. Nearly half of millennials find their real estate agent through a friend, neighbor, or relative, and 72 percent of millennial sellers only contact one agent.

Effects on the Real Estate Industry: Millennials cite honesty, trustworthiness, and reputation as the three most important qualities in a professional real estate agent. As 68 percent of millennials who use a real estate agent interview only one agent, they are often willing to stick with an agent they trust, even if there are cheaper options out there. That means agents must work hard to ensure solid referrals from clients.

Millennials have just begun to shape the housing market. As their incomes increase with age and they start wanting to settle down, they’ll continue to effect change. If the real estate industry can understand their needs and innovate where necessary, it may be able to convince millennials to give up renting and move into the comfort of their own home.

This post was originally published on RISMedia’s blog, Housecall. Visit the blog daily for housing and real estate tips and trends.

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Bye Bye Refi Things are Changing Now

Sep 23, 2016 by

Things are changing guys and today we’ve got Barry Habib letting us know how, when and why.  Be sure to tune in and prepare to say bye bye refi.

The post Bye Bye Refi Things are Changing Now appeared first on National Real Estate Post.

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