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When I was first licensed in the 1990s, if a house didn’t sell for a period of time like 30 or 60 days, we would often reduce the price. Sometimes it was because we had too few showings, or because the showings we had didn’t yield any offers. On occasion, some home sellers would voice concern at a price change because no one had seen the house to give them price feedback. We’d have to explain that the feedback was the actual absence of showings. It wasn’t a truly data-driven process, however, because we had no means of measuring who saw the house either through their agent’s analog means (like seeing it in a broker’s binder) or advertised in publications and passed on it. We did have ample evidence that once a price was reduced, that the market responded.
It’s very different today. We have a number of digital means of measuring the interest -or lack of it- in a listing based on online metrics.
A few examples:
- Web traffic. We have access to dozens of websites that can inform us how many people have viewed the property, saved it, and if they viewed it multiple times. Zillow, Trulia, Realtor.com, our own website, and our client platforms all have some form of revealing the listing’s performance.
- Saved or Bookmarked listings. The same online assets can also tell us how many people added a listing to their favorite or saved list.
- Proprietary client portals stats. Often when a buyer client is working with an agent, that agent’s brokerage has an online client platform (ours is called RealScout) that tells us when a particular listing is opened or saved. This is not like raw web traffic. These are active clients who have a representation contract with an agency and have a login to a concierge type site that gives us rich data on a listing’s performance.
- Predictive analytics. This is crazy stuff. The program uses big data and is enhanced by AI, and can give us a far deeper dive into activity around a listing, and also tells us how many registered clients would likely save or match up with a listing by an algorithm fueled by web behavior. Simply put, it will tell me that a listing will garner 40 interested parties at $840,000 but 65 interested parties at $799,000. This is extremely data-driven and granular.
- Reverse prospecting. This is in the back office of the MLS and gives a listing agent a list of every instance where a fellow MLS member has sent this listing to a client.
Given that with virtual tours, floor plans, high resolution photos and even drone imaging every listing is virtually an open house online 24/7, we can therefore see if the listing’s performance is in sync with the online metrics, or if a price reduction is in order. Let’s take, for example, two similar listings with comparable characteristics; one is priced at $699,000, the other at $729,000. The 699 home has 500 unique views, 25 favorites, 20 showings the first two weeks, 35 reverse prospecting matches, and 2 offers. The 729 house has 350 unique views, 3 favorites, 8 showings the first 2 weeks, 15 reverse prospecting matches, and one offer below asking. It doesn’t take much to conclude that $729,000, even in this market, is too high.
If a home is under performing on the market, the seller should ask their agent to see the data on the home’s online metrics with consumers. The agent should be able to compare their performance with a comparable property, and even use the predictive model to see what would change with a price improvement. The math defines the path- armed with data, the agent and client should be able to know what the best move should be for pricing.
Upon occasion, we are asked by the seller if the perception of the public will change with a price drop. The concern is that the seller might appear desperate or something like that. Soon, I will write a piece on the things we overthink in this industry. That question will be prominent. In this market, those fears evaporate when the buyer competition heats up with a correctly priced listing.
The conventional wisdom for people with a house they own who want to buy a new home has always been that they sell their current home before they made an offer on a new home because no seller wants a “contingent” deal on their sale. Also known as a Hubbard Clause or a sales contingency, it has always posed a risk for a seller because their sale depends on their buyer finding a buyer of their own. As a listing agent I’ve even had newer agents tell me that once my seller client agrees, their buyer will list their home for sale. Since it’s always been easier to buy than to sell, that seldom worked out.
In 1962, my older brother Paul, then just 4 years old, got gravely ill and was rushed to the hospital.
In 2015 I was asked to attend a hearing at the Town Hall of New Castle, NY to hear local residents speak on the expansion of a local children’s hospital, the Sunshine Home. I expected formalities. The expansion of a children’s hospital didn’t strike me as something anyone would oppose.
This past week I was contacted by the Sunshine administration and invited to take a tour of the nearly completed expansion. I was able to walk through with the director and got a tour of the magnificent job they did. In addition to increasing the bed count from about 50 to over 120, the resources available to the patients and their families are so extensive and first class that even my big mouth can hardly do it justice. The physical plant itself doesn’t feel like a hospital. It is a bright, airy, colorful lodge.
Willy Wonka than the expected utilitarian feel of a hospital. The utility is still there- it’s the presentation, however, that makes such a huge difference.
Buyers don’t need a buyer agent simply because they can open a lockbox and facilitate an offer. To do their job properly, buyer agents have an obligation to perform due diligence on the property they represent their buyers on, and sadly I’m not seeing that all too often. Buyers should expect that their agent will do verify a significant amount of information on behalf of their client:
This was clearly being sold by someone who was into do it yourself projects on the property. There was ductwork for central air that was not utilized. There were split units on many walls, part of an extensive system that was hard to piece together for us. A separate flue had been added to the heating system that was unused. There were drainage grates on one side of the house with electrical wires going down into the drain itself. The basement workshop appeared to be an active one, with pipes, hoses, and registers and systems that appeared to be connected to the split units. Outside, electric cables were run alongside the house, partially enclosed with downspouts.
The following is a list of good reasons for a buyer to waive their home inspection:
This past weekend some agents on my team held an open house for a listing in Mahopac. It was busy, with 25 separate parties and possibly 50 or 60 people walking through the home. The one wrinkle was that street parking was sparce. It had a driveway that could fit up to 10 cars, but only one car wide. This is workable with reasonable cooperative people.
Years ago, I was the listing agent on a property where an offer came in significantly below asking price. The pre approval accompanying the offer was for the exact amount offered, tens of thousands of dollars below asking. My client asked why, if they were only approved for $450,000, that they’d even look at a home listed for $500,000.
Recently, a client shared with me that a friend advised them to avoid homes on septic and to only buy a home with a public sewer connection.
This past Sunday I covered for one of our agents and met up with some first time homebuyers for their very first home tour. We had a big day scheduled: 5 confirmed appointments, all of the homes looked good, and the clients were excited to get their dream home.
My last two posts have addressed the fact that despite the higher interest rates, it remains a seller’s market because of low inventory of listings. I wrote about why inventory is so low yesterday, and today I’m going to pretend I’m the HUD secretary and Housing Emperor (a position I made up but I’d love that job) to talk about how to get out of the corner the housing market has painted itself into.
Yesterday I wrote about the low inventory and the challenges buyers face with supply not measuring up to demand. I did not address the reason why buyers have so little to choose from, and that’s what I’ll attempt to tackle.
But we aren’t in a typical market here in Westchester and the surrounding areas, and we haven’t been since the Covid pandemic. Right now, the low inventory has resulted in a significant amount of pent up demand, and homes listed around the holidays are enjoying attention that makes it feel like spring despite the temperature. There are legions of prospective home buyers who didn’t have much luck in the spring or summer who are still looking in earnest.
$449,000 will buy you a condominium with Hudson Views like the one I just closed on. The MLS description for the property are as follows:
How Online Reviews Have Impacted Real Estate Agents
My reviews were very nice, which was gratifying, and for the few years I acted as a Redfin referral partner agent I compiled more good ratings. It was all within their ecosystem, and while it was a tiny bit nerve wracking to wait for the responses, they were all positive.
Enter Zillow.
In late 2010, Zillow announced their own agent review platform, and it was different. Unlike Redfin, which surveyed their own clients’ transactions, Zillow’s reviews would be open to anyone. This concerned me. I wrote in the linked post a worry that the integrity of the reviews could be compromised by competitors and people gaming the system with bogus reviews, among other things.
Well, Zillow did the right thing and ensured that controls would be in place to prevent fraud. And here we are 13 years later and agent reviews are ubiquitous- Zillow, Google my Business, Facebook, and Yelp, to name the most recognizable names. These days we train our agents to get as many reviews as possible. How far we’ve come from the time when 20 reviews was considered a high amount, and my Zillow profile just got my 400th review.
The public now expects reviews for agent just as they do on Amazon products, Uber drivers, or restaurants. Looking back, I think the angst was more about the pain of change than worries that we’d get bad reviews. Real estate is a funny business- anytime transparency is introduced, the address, price or marketing history, and these days the agent commission, people worry that we’ll lose our value proposition. But we’ve never been good gate keepers, and more people use agents to represent them than before the Internet became prominent. The truth has never been our enemy.