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Predictive Analytics: How Real Estate's Magic 8-Ball Foretells Future Listings

August 11 2017

August is Analytics Month at RE Technology—predictive analytics, that is. Together, we'll learn more about predictive analytics and explore platforms built for every level of the industry: for agents, for brokerages, and for MLSs.

Today, we're kicking things off with a solution for real estate agents that can predict which homeowners are most likely to list their home for sale. SmartZip, an app highlighted in our 2017-18 Technology Guide2017-18 Technology Guide, not only helps agents identify likely seller leads, but also provides agents the tools needed to market directly to those leads.

But First: What Is Predictive Analytics?

past and future signsWhen you hear the word "analytics," most agents probably think of market analytics—the data about how many homes sold in a given time period, their sale price, their average Days on Market, and more. This data gives you a snapshot of market activity in the recent past—and regular analytics is just that: the past. It's a record of what has already happened.

Predictive analytics, on the other hand, uses data to predict what may happen in the future.

In the case of SmartZip, that means predicting which homes are most likely to go on the market soon. SmartZip does this by analyzing over 2000 individual homeowner attributes like length of time in home, last sale date, loan details, number of residents, consumer habits, income, hobbies and interests, owner savings, school rating, credit status, LTV ratio, home equity, owner's life stage, age of home, and more.

Why Should Agents Use Predictive Analytics?

Predictive analytics helps agents lower their marketing budget by pursuing only those leads that are the most likely to convert. Rather than blanketing your geographic farm of, say, 2000 homes with marketing postcards, a predictive analytics solution can hone in on the 20 percent of homeowners in that area who are most likely to sell in the next 6-12 months. That means you'll be sending (and spending on) marketing materials to only 400 homes--and these owners are far more likely to be interested in what you have to say.

Of course, knowing who to target isn't the same as knowing how to turn this information into commissions. SmartZip makes this easy on agents by offering a suite of automated marketing materials—like online banner ads, Facebook ads, high end direct mail, digitally handwritten letters, and email nurture campaigns—that agents can use to target specific prospects.

Most recently, the company added a cold-calling campaigns to their list of outreach offerings. This new service targets the top 20 percent of your farm with phone calls to gauge the interest of each homeowner's interest in selling. When SmartZip's outreach team finds a prospect that wants to sell, they will connect the lead directly to you in order to get you a listing appointment. In pilot testing for this program, 75 percent of people got a listing within a two month time period.

Unique Ways to Use Predictive Analytics

In addition to enabling you to market smarter, not harder, predictive analytics can streamline activities like door knocking. For example, if you door knock a neighborhood before an open house, you can use a predictive analytics tool to tell you which nearby homeowners are most likely to be interested in selling soon. Rather than knocking on everyone's doors, you can spend time on introducing yourself only to those neighbors who are most likely to be interested in your services.

And if any of your new leads—whether from door knocking, online marketing, or advertising to your farm--need "social proof" to move them along your funnel, SmartZip's recent acquisition can help. Reach150 automates the solicitation and posting of testimonials from former clients, bolstering your reputation when someone Googles your business.

Want to learn more? We're co-hosting a free webinar with SmartZip and Reach150 next Wednesday. Register now to save your seat!

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