A couple of weeks ago I spent a few days with Hobb Herder in a course called MegaManagement. I have since signed up for their coaching for owners and managers of real estate offices however one of the things that I came home with was the idea that most real estate offices are essentially dinosaurs. They are effectively frogs in a pot of water that has become fatally hot and yet they have no idea that it is happening. What they do know is that its hard to recruit talent. It’s hard to keep talent. The techniques that most of the offices are coaching are from the 70′s and 80′s and really doesn’t reflect the new internet economy in the least. Hobbs Herder which is an advertising firm for real estate agents really spends a significant amount of time in the off line collatoral business and the building of agents personal brands. First this makes a lot of sense, as most agents don’t have a good idea of how to differentiate themselves from all the other agents in the marketplace. The main reason is that in the personal services industry like being a real estate professional it really comes down to number of impressions over time to become top of mind when your contact or client decides to buy or sell. What is discounted however is the use of social media and how social media has displaced at least for the younger generation print media.
If you read any publication like Inc, or Fast Company you’ve probably seen Facebook mentioned on the cover at least a couple of times this last year and if you took some time to read the article you would see how Facebook started as a place for college students to network. Since that time Facebook has expanded to allow anyone with a social network to build their own relationship trees and to share information with friends and associates. However what may be missed is that Facebook is a highly efficient system for disseminating information about what you are up to to these people. I can’t tell you how many times during the last year I get phone calls from people just wanting to know what I’m up to and we chat and of course I inquire at the same time as to what they are up to. We might chat for 20 minutes while multitasking on the computer or whatever and even though I was in the conversation I forget the commentary. However with Facebook I am able to log into my page. Update information on myself which automatically updates everyone who I’m a friend with on my update so they can see what I’m up to on their Facebook page. What’s even more interesting is how many people are online Facebook of people who I am keeping up to date on Facebook. It seems that Facebook through its highly addicting interface and its efficiency of tranfer of information allows me to see what other people are up to quickly and they are able to do the same with my information. This ultimately makes me more efficient.
Now how does this play into building a personal brand as a real estate or any other personal services professional. Well ultimately you want all your clients to be on Facebook or something like Facebook. Why, for the same reasons I talked about earlier. Clients are looking for highly efficient models of keeping track of everyone else they know including their agents. It keeps us top of mind with our clients and because their friends who will be part of their network will likely look through the photos and “how we met” portions of the friends photos it gives you a way to get referred without even trying.
So what is the message here…. Be on Facebook and make sure that you have invited all of your “good” clients to be on Facebook as well. If you do this then it is highly likely that your client will remember you without having to mail out monthly recipe cards and its likely that your clients friends may end up wanting to be your friend too and ultimately doing business with you.
November 12th, 2007
Zillow for me went from being an asset for quick and dirty home valuations to a liability.Â
Okay if you are a real estate agent who is even slightly tech you’ve no doubt ran across Zillow and probably even tried to see if it would short cut the CMA process on homes. For those who aren’t real estate agents, CMA stands for “Comparative Market Analysis” and it’s a process of using the MLS and knowledge of homes in the area to come up with a valuation of a home for a prospective seller to ultimately determine the highest sales price of the home in a reasonable period of time (say three months).
As a prior HouseValues subscriber who subscribed to the valuation requests, Zillow looked like the Holy Grail to a process that normally would take anywhere from an hour to three hours to generate a range of value that home might sell for and for all intents and purposes had the potential of reducing the period to 10 – 15 minutes, simply the time to transpose the data from Zillow into the HouseValues system.
It became obvious fairly quickly after running a few CMA’s that way that the valuations just didn’t feel very accurate. Sure I knew the neighborhoods and in many cases had already viewed some of the homes which Zillow had called out as comparables and in reality the range of value that I entered wasn’t inaccurate, however it also didn’t feel accurate either. It really came down to the fact that I didn’t have faith in the estimate of value coming out of Zillow.
What drove me to write this particular blog however is one of my past clients who purchased a home about three years back is now thinking of selling. I would from time to time type in the address into Zillow, again with the idea that it would kick out a value that I could simply have on the top of my head should I talk to my client. That number by the way was about $365,000 according to Zillow. Recently she asked if I would be interested in listing it and I obviously I said I would. The subject of price came up and without skipping a beat I suggested the home would probably list between $340,000 – $365,000. (I didn’t want to err on the high side so I used the Zillow zestimate as the top end.) If my CMA came back above $365,000 then we would obviously look at listing at the higher valuation. I asked one of the agent on our team to work up a CMA to send to my client and much to my chagrin her CMA came in at $309,000. Oh no!!! What the heck is going on here. Zillow is showing me $365,000 for a quick and dirty estimate of value and the agent on our team came back with $309,000.
What’s wrong with this picture. Well what is obvious is that someone or something is wrong… Guess what, I wanted to see the comparables. I need to save face with my client (by the way I haven’t talked to my client yet… This is a bit of my vent in advance of that), however the comparables look pretty darn accurate. In fact based on recent solds and recent listings $309,000 looks dead on, anything more then $5000 – $10,000 above that is going to reduce the number of showings considerably and the likelihood of an offer beyond that.
I’ll probably get a little slack from my client (who has become a friend since she bought the house) when I tell her where my initial estimate of value came from, but it makes me sound a bit uneducated on the market by simply throwing out a figure without actually pulling the comparables before making the call.
I even decided to visit the Zillow site and see what it said about is valuation model and its quite telling if you actually read the fine print. In Washington State the mean percentage from actual selling price is 5.7%. That doesn’t sound too bad, however mean is different then average. If you take all of the valuations that Zillow does and you compute the deviation from the selling price 5.7% sound good, however if the valuations that were more then 5.7% were a lot more then 5.7% then the average could in fact be a lot larger. Another stat for Washington State was that 72% of the time the selling price was within 10% of the zestimate. That means that in reality that’s a 20% potential spread 72% of the time. On a $309,000 home that means that if they were accurate with their zestimate then for their estimate to be even in the ballpark it would have had to be a high of $339,900 and a low of $278,100. This zestimate obviously fell into that 28% of the time that they are off more then 10% on valuation. Assuming that we ultimately do sell the home for $309,000 that is a difference of in excess of 18% from the Zillow valuation.
My bottom line on Zillow is it’s a novelty. If you want to for grins and giggles see what a computer comes up with on the valuation of your home then go for it, however I do not recommend that serious home buyers or sellers use Zillow without a second opinion from a knowledgeable agent.
Zillow is like the trusted friend who pulls a fast one….
Fool me once, shame on you! Fool me twice, shame on me! Zillow will not fool me twice.
March 4th, 2007