3 things to do to take advantage of the shifting market

By Jared James

Unless you’ve been on hiatus for the last six months, you have for sure heard the words “shifting market” more times than you care to count. The problem with this is that it puts the focus on the wrong place. The question is not whether the market is shifting; the real question is how you are shifting in your own business to stay ahead of the market and remain the best option for your consumers moving forward.

Let’s talk about that.

I’m a big believer that there is no such thing as a good market or bad market. There’s just the market you are in and what you do with it. I don’t just run one of the largest coaching and training companies in the industry today; I’m one of those rare breeds that actually sold a lot of real estate before getting into this side of the business, and I can tell you that my best year ever selling was 2008. Not exactly the best time to be selling, according to all reports at the time.

So, here we find ourselves again at a time when the headlines are less than ideal and yet opportunities are everywhere if you know where to look and how to
capitalize.

Here are a couple of tips to help you take advantage of the market we are in while so many of your competitors are just hoping things go OK and waiting to see what happens.

1. Don’t build your business on rented land

Would you build a house on rented land? Of course not. Then why are so many of you building your real estate business on sources that you don’t control? That’s a dangerous game when you consider that any one of them could pull the plug on their leads program and you would be out of luck. Building on rented land has more to do with the intent than it does the source. I’m actually all for pulling business from third-party companies and buying leads or paying referral fees, as long as you understand that the ultimate purpose of that customer is to get them into your database. Your database is only business that you actually own and control and have direct access to whenever you need it. When you understand the lifetime value of a real estate client, and aren’t just looking at them as a one-time sale, you will start to understand that the answer to any market or the next disruptor is sitting right under your nose: it’s your database.

2. Build your content library

Our business has changed, and while none of you got into real estate to be a content creator, that’s what it now takes to be a successful Realtor.
We teach our students that our job every day is to give people in your area the opportunity to KNOW you so that they have a chance to NO you. Most of the people that would have worked with you in the past are not even giving you an at-bat in today’s world, because the first thing they do is go online and decide who to talk to. The agent that answers their questions before they ever even get a chance to meet is more times than not the one they use.

If you aren’t sure what videos belong in your content library, it’s simple … just look at the questions that your clients ask you by text and email, and answer those questions one by one on YouTube, Instagram and Facebook. That will be the start you need to get going.

3. It’s time to be a professional again

We just came through a market that was a fool’s gold market for anyone new in the business. That wasn’t a normal market by any standard. We are now entering a market where pros are going to win and winging it won’t cut it anymore. This means that you will actually need to have specific strategies that you follow every day for results. Not sometimes … every day. It will also mean that the words you use will matter again, because, like it or not, we are in sales and the quality of the answers you get will always be determined by the quality of the questions that you ask. So, practice, practice, practice and commit to being a pro.

The coming market should only be scary for those that aren’t prepared, but for the rest of you, get with your coach, come up with your plan for 2023 and then remember what we tell our students every day: consistency is undefeated. It doesn’t matter what you do tomorrow or three days from now. All that matters is what you will still be doing eight months from now if you want to see results and succeed in any market regardless of the conditions around you.

Jared James is an entrepreneur, speaker, coach and author.

Are AVMs (automated valuation models) replacing the CMA?

With the advancement of tech-based real estate services such as Zillow, Realtor.com, Redfin and others, customers can easily research and estimate the value of their homes without involving a Realtor. The big question is, how accurate are they?

Property valuations are the most integral part of a real estate agent’s business. You may find, or already use, easy and quick ways to determine property values. One such method is using an automated valuation model, or AVM. With so many options available, you will want to know how an AVM can benefit you and who the top providers are.

What exactly is a real estate AVM?

A real estate automated valuation model is a machine learning-based system that examines various data points to determine the worth of a particular property.

The information examined often includes details of the property, comparable sales data, the property’s age, market trends and more. There are many available real estate AVMs on the market. Zillow’s “Zestimate” is the most popular.

The Zestimate

Zestimate is a key feature offered by Zillow and one of the first AVMs made available to the general public. When introduced, it caused some controversy, particularly among real estate agents. However, the Zestimate is so prevalent in clients’ minds that agents frequently intentionally bring it up during their listing presentations, detailing why it is either high or low or, perhaps, exactly right.

Zestimate pros and cons

The main benefit of Zestimate is that it gives users a basic idea of the value of their homes. On the other hand, Zillow’s estimates frequently rely on data submitted by users; as such, they can only be as reliable as the information given to them. Users’ errors or omissions can jeopardize the accuracy of the data.

Other common real estate AVMs: Realtor.com’s AVM; Trulia’s AVM; CoreLogic RealAVM; House Canary; Realtor Property Resource (RPR); Homesnap; Freddie Mac Home Value Explorer; ATTOM Data Solutions; Collateral Analytics (Black Knight); Veros; Quantarium (Xome); Clear Capital.

AVMs are always estimates — they will never compare to a CMA

AVMs should not be used to give a home’s final value. They only provide estimates and can be misleading. Any AVM should be described as an estimate. Most of the commercial sites use them as a catalyst, not a stand-in, to encourage website visitors to contact one of their subscribed agents and to sell the leads. This is one of the many ways they make their money. AVM estimates are not intended to take the place of a more thorough property evaluation that involves an in-home inspection and a detailed comparative market analysis (CMA) from an experienced agent.

Actually, AVMs are a starting point when determining values that you, as a Realtor, will be able to use to establish yourself as an expert in your area for pricing and win more business.

I recommend that you use two to three of them when doing listing presentations so that you can show the homeowner how these AVMs can vary in their valuations and then take another step to show a more detailed CMA (Comparative Market Analysis) that factors in details like home improvements, functional obsolescence, desirable/undesirable lot, etc. This is especially important in areas that are not homogenized like large cities where AVMs often use a condo as a comparison for a single-family home which can really skew the numbers.

Three good AVMs to consider:

1. Realtor Property Resource (RPR)

RPR is a free online tool that helps Realtors estimate a home’s value based on the property’s features, renovations and the housing market. This tool can also assist consumers in deciding whether it is cost-effective to buy a house and later remodel it.

Realtors can use the report obtained to educate prospective buyers and sellers regarding what the local market offers, which helps set reasonable goals. So far, there are no significant pitfalls, but it needs to be updated often for easy navigation.

2. CoreLogic RealAVM

RealAVM is one of CoreLogic’s efficient and easy-to-use products. It provides the first glimpse at recent house price movements, providing an initial baseline for appropriately valuing collateral (and mortgage risk).

The RealAVM is just one component of the property information sheet for real estate agents using CoreLogic’s Realist software; it is not a consumer-facing AVM but a great tool to use for determining value.

3. ATTOM Data Solutions

ATTOM is a trustworthy source for reliable, nationwide real estate data. It offers analytics-ready data for real-world applications with flexible delivery solutions like ATTOM Cloud and one of the market’s top real estate data APIs.

Your individual needs, opportunities and goals will be met by ATTOM’s adaptable property data delivery solutions. Through a range of delivery methods, ATTOM Data can quickly establish data management processes and address your real estate data needs.

Bottom line

Major AVM providers highlight their precision, thoroughness and time-saving abilities. But AVMs work with averages. They are, therefore, instrumental in areas with fairly uniform property stock. On the other hand, they might not be as precise or helpful in areas with a wider variety of homes.

While their use is expanding, AVMs have not replaced human valuation estimates and will never compete with a Realtor-made CMA. Take advantage of these useful information resources, but then show your value as an expert real estate home evaluator with detailed and accurate pricing derived from your CMA. You will impress your clients and boost their confidence in you. This will win you listings and attract more buyers as you become their trusted Realtor. More listings and more buyers means a better bottom line!

Anne Ewasko is a veteran Realtor in the Chicago area and a longtime techie. Visit her at anne.luxhomechicago.com.