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Forget Buyer Leads, I Need Sellers

June 11 2013

binaryIn business, inversion is a deviation from the normal conditions of economic stability represented by a dramatic shift when conditions hit a tipping point. It is hard to spot the tipping point in real estate economics because it happens in local markets at certain price points first, then spreads systemically until it saturates a region or the nation.

Clearly, we have moved from a buyer's market to a seller's market in real estate. Now it is time for a shift in marketing from buyer lead generation to seller lead generation. Its time to shift marketing money from online advertising over to direct marketing. The good news is that technology can help.

I have written before about tools that leverage big data to power brokerages that want to predict the likelihood of customers purchasing affiliated services. There are a number of monitoring tools that can signal a mortgage company when it becomes in the consumer's best interest to refinance. Using the closing date of a home purchase, insurance companies can target renewal or take away business for homeowner's insurance and other insurance bundles. These solutions should be fundamental in the operations of brokerages offering a complete line of homeownership services. The new emerging category is using big data to predict what homeowners are likely to sell.

There is a unique intersection in business between businesses and marketing that usually takes on the term of market research. Marketers build profiles of target customers, then the magicians or mathematicians take over. In today's parlance, they call it algorithm development. In the simplest of terms, any real estate professional can tell you what and who is selling today. Using those signals, algorithms can be developed to ascertain a model for predicting who is likely to sell next. It is not intuition, it's predictive math.

In today's big data economy, you can skip the phase of asking real estate professionals what and who is selling. That core data is published each day in the MLS and public record databases. Big data absorbs that information and profiles properties and sellers in real time. There are two products in the marketplace today that support real estate professionals in predicting future transactions, ePropertyWatch and Value Appeal Analytics.

ePropertyWatch Pro is offered by CoreLogic. It is a direct email marketing solution that enables real estate professionals to send an AVM (property value estimate) to their customer base each month, or whenever there is transaction activity in a homeowner's neighborhood. A new listing, a notice of foreclosure, a sale, or a significant change in value up or down will trigger an email from the agent to the customer. It is all nicely branded. You can sign up for free at epropertywatch.com/proepropertywatch.com/pro. If you are an agent reading this article and you do not sign up for ePropertywatch right now, something is wrong with you. It's free email marketing and it is CAN-SPAM compliant.

Value Appeal Analytics works a bit like ePropertyWatch, but is a direct mail marketing solution that sends a postcard on behalf of the agent when a consumer is likely to list their home for sale. Value Appeal Analytics analyzes farming areas selected by the agent, removing homes from the area that have had recent transactions, bad credit performance, poor debt-to-equity ratios, and other magic criteria that typically discourage homeowners from selling.

It allows the professional to send a postcard with a home valuation and offer listing services. Value Appeal Analytics drives the consumer to a webpage where they enter their email address to get information. That email address is then available to the agent. This solution is a paid service because of the costs associated with printing and mailing the postcards. Click here to learn more.

If I were a listing agent today, I would be using both of these solutions in concert. I would start with Value Appeal Analytics direct mail marketing to build an inventory of consumer email addresses, then use ePropertyWatch to keep in contact with the farm – removing them from the direct mail list to reduce marketing costs.

Side note about AVMs: Both of these products use AVMs to predict the value of the property. Like any AVM, the accuracy varies. If you have ever taken a look at Zillow's Zestimates, or RPR's RVM – you know what I am talking about. CoreLogic has a solid reputation in the financial services business as being one of the best AVM providers. It's the AVM that the banks use. Banks are not using Zestimates or RVM to my knowledge today. Given that many transactions hinge on bank financing, I would lean into CoreLogic AVMs first, and use the RVM to negotiate with banks to support buyers when the appraisal comes in low.

Other articles of interest: AgentOffice | MLSFinder.com