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If you send out "Find your home value instantly online" postcards to your farm, your marketing efforts are FAILING!

November 07 2013

leadingagent postcard failToday, with technology moving as fast as it does and people becoming more educated than ever before, real estate professionals need to understand that they are dealing with a group of prospective clients that are "smarter than the average bear."

They adopt new technologies and trends quickly, learn about them, and then either stick with them or don't. Sometimes they choose not to stick with something because it's too difficult to use, or simply doesn't bring real value to their lives. Other times though, they choose not to subscribe to a new technology or trend, simply because there is something out there that already exists, which is better.

With that in mind, today I'd like to talk about instant online home estimates and online real estate brokerages.

Where did this all begin?

Let's begin with the start of this all--the dotcom boom, when somebody had the brilliant idea to bring real estate firms online (if you can't sense it in my written words, yes, that is supposed to have a hint of sarcasm).

RealtorsĀ® hated online real estate companies, as it was disruptive and potentially would change the way the entire industry would work. Come to find out, though, consumers did as well. Grouped along with the laundry list of companies that flamed out in glorious fashion during what would be dubbed the "Dot Bomb," online real estate companies such as eHome, Soma Living, etc. failed and closed shop. Not because their technology was buggy, or that they were run by people not up for the task, but because at the end of the day, homeowners believed that real estate is a relationship business. How can you trust something as impersonal as an online service with something as valuable as your family home? The answer was a resounding, "You Can't."

That is the end of that, right?

In 2005, like a phoenix rising from the ashes, Zillow launched and announced yet another online twist on real estate. Their idea was much more simplistic. They would simply tell you the value of your home, instantly, online, with no obligation and no need to ever speak with a RealtorĀ®.

Again, the real estate community postured for a potential uprising. Quickly, though, it became evident that this was not necessary. Simply put, Zillow proved that it is IMPOSSIBLE for a computer to accurately pinpoint the value of a property. Why, you ask? Because if you simply look at sale prices, square footage and school districts, you are ignoring a major piece of the puzzle, which leads you to "the art" of pricing a home (e.g. upgrades, floor plan, location in the neighborhood, etc.).

But did the public buy into this? Well, since their launch, Zillow is still alive and well, and other companies such as Trulia and capture marketing companies such as Corefact have come up with instant online home evaluations of various flavors, as well. That said, there is much debate from people about how "reliable" these estimates are.

Frankly, as I've noted MANY times, our corporate policy is that nobody should EVER tell a homeowner the value of their home unless they are either a) an appraiser, or b) a real estate agent. If you look online, many would agree with this.

Just do a quick Google search. What you find is quite interesting. The first posts you see are actually posts written by Zillow themselves. After that, you see post after post about people describing why "Zestimates" are not accurate. Let's face it. Given what I described above, how can they be?

So how does any of this relate to my marketing?

Should real estate agents stop advertising on sites like Zillow or Trulia? No way. Regardless of what their "home evaluations" show, and no matter how flawed people think the estimates are, the fact remains that people can simply use those sites to search the internet. If you can get a lead from homeowners doing listing searches on these sites, good for you.

Should real estate agents tie into some sort of capture marketing system that promises homeowners an instant online home evaluation, or use some sort of automated email system that tells people what their home value is? NO! In fact, they should run screaming.

The fact of the matter is, as described above, the estimate is going to most likely be significantly off. Keep in mind, it could be off on the high side or on the low side. Both sides have serious consequences for how people view your knowledge and your integrity in your marketplace.

If the value is over inflated, you are just setting yourself up for an argument before you ever step foot in your prospect's home for a listing appointment. You will do your research, come up with a realistic list price and present it to your prospective client. If the house needs more work than other comparable homes, though, and they saw on the online estimate that the home was worth more than you are showing them during the listing appointment, they will either think you are crazy, or trying to pull a "bait and switch" just to get your foot in the door for the listing appointment.

But what if your "online estimate" underestimated the value of a prospective homeowner's home when they went to your online evaluator? The result is even worse. For instance, let's say that their home has actually been upgraded, and it is better in many ways from the most recent sales of homes with comparable square footage and school district in their neighborhood? Simply put, they are going to think you have no grasp of the marketplace, no grasp of what homes are worth in the area, and no idea how to sell a home such as theirs.

After all, "It was on your website. Surely you must know what information is available on your website. If you are off base about my marketplace and the value of my home, why would I ever call you to help me sell my house?"

And that is where the rubber meets the road. Why would you ever spend your hard earned marketing dollars promoting something that is potentially going to build ill will in your marketplace, or even worse, make you seem inexperienced or out of touch?

To view the original article, visit the Leading Agent blogLeading Agent blog.