Mary & Dick's Blog

If Amazon.com Sold Homes

QuestionsMary & I have a new listing, and as we were talking about how we were going to market it, we were struck once again with how little we really know about who the potential buyers for this home are. Sure, we can make a few assumptions: based on the price of the home, we can guess at their socio-economic status; based on its size, we might know something about their family; and we can take a stab at their motivation, since they are buying in “interesting times” for our market.

But for our purposes, we’d like “who” to have a much more specific meaning, in the sense of:

  • What are the names of these potential buyers?
  • Where do they live?
  • What is the most effective way to communicate with them?

If we knew these basic things, our marketing could approach the oft-discussed goal of targeting with a rifle instead of a shotgun. We’d be much better at selling our listings.

Today, I got an e-mail from Amazon.com, containing the usual suggestions about books I might be interested in. And as usual they were right – several were relevant to my interests and I didn’t already own them. Amazon does this often, and they’re very good at it. And it’s no secret how they do it – they pay attention, they analyze their data, and they communicate effectively. They know what I want, they save me the trouble of searching for it, and they offer it to me.

And I thought how excellent we would be at our profession if we were like Amazon – and I wondered what it would take for the real estate industry to develop the same kind of capability and why we aren’t doing it.

Paying Attention (Data):

DataAs an industry, we have NAR’s annual survey, which contains a lot of very useful information about home buyers. But it’s a national survey, and we all know that real estate is a local phenomenon. We need to understand how our local market works – where our home buyers are coming from. It turns out that we’re sitting on a ton of data, in the form of our transaction records and files. And this could easily be supplemented by external sources such as public records and private databases. Information isn’t the problem.

Analysis:

The technology to manipulate large amounts of data to identify trends is widely available, as is the capability to aggregate raw data to respond to privacy protection issues. In theory and practice, it would not be difficult to use available data to characterize our local markets and answer questions such as:

  • AnalysisAre buyers of new 2-story homes local or relocating?
  • What are Gen X & Y buyers purchasing locally?
  • Are buyers actually using QR codes here?
  • Is age still a major factor in identifying buyers of ranch-style homes?
  • Etc. etc.

With the kind of characterization possible, we could have a pretty decent idea of what the typical buyer types were for any new listing in our market area. Analysis isn’t likely to be the problem then, either.

Effective Use (Marketing):

TargetingWe’re all marketers – it’s what we do, and the successful among us not only do it really well – they innovate. This isn’t going to be the bottleneck – if we get a fairly specific and detailed description of the potential buyer for one of our listings, we’ll find an effective way to find them and present an interesting opportunity to them.

(And, on the other side, can you imagine a listing presentation where you can make a substantiated claim that you can identify specific potential buyers for the home?)


So, why aren’t we already doing this?

I believe the main reason we’ve fallen behind the technology curve on this has to do with the structure of our industry. The data, the technology and the ability to put the result to good use are all there. But it would take a big effort and a major investment to put them all together, and I think that the will to do so is lacking.

Most of us are independent contractors of some sort, and we walk out the door every day with a substantial percentage of the industry’s earnings in our individual pockets. Thus, for the large real estate companies – the ones with the capability to make the necessary investment – the profit motive is weak. And whatever the benefits, and no matter how they might be shared, they wouldn’t be immediately available – doing something like this would take time and effort, and, in today’s market environment, there doesn’t seem to be much long-term thinking going on.

But I’d bet that something like this is going to show up someday, maybe even soon. It’s probably going to come from a source external to our industry – maybe a couple of data geeks in a garage somewhere. It’s going to be revolutionary, and if the source is external, it may be disruptive. It might just wind up challenging us more than enhancing us, because we didn’t do it ourselves, and ceded the benefits and control of it to others. Maybe it’s time to start giving this some thought.

Mary & Dick

Mary & Dick Greenberg
New Paradigm Partners LLC
2601 S. Lemay Ave. #41
Fort Collins, CO 80525
970-689-4663
www.maryanddick.com

 

Data Source: IRES MLS

Comment balloon 45 commentsDick Greenberg • September 25 2011 02:57PM

Comments

Featured with no comments! Kudos I do not think I have ever run into this. Anyway its an awesome post and very worthy of the feature just wish I could have read it to get you the suggest before seeing it here!

 

Posted by David Shamansky, Creative, Aggressive & 560 FICO - OK, Colorado Mtg (US Mortgages - David Shamansky) about 7 years ago

MatchMyHome.com

 

A new innovative real estate / career based website that will not only find you the home of your dreams but a job to pay for it. Just answer this 5 page questionnaire and within 10 days you will receive the potential home / job of your dreams. At MatchMyHome.com you will fall in love with your new home and your new job will be . . .

 

I see the URL is available. . . .go for it.

 

Might work???

Posted by Charlie Dresen, Steamboat Springs, CO e-Pro (Steamboat Sotheby's International Realty) about 7 years ago

H David - Surprised me too. I didn't even know it was featured until I read your comment and went "Huh?". I'm glad you read it and liked it - I appreciated your support, as always.

Hi Charlie - That's too funny. But I'm sure we've seen stranger things, and as weird as it sounds, it might work, and you could probably get seed capital for the idea. All we can really do is stay adaptable to change, because it for sure is going to come.

Posted by Dick Greenberg, Northern Colorado Residential Real Estate (New Paradigm Partners LLC) about 7 years ago

In Fair Housing class they always tell you to focus on the property NOT the type of people who would buy it - because that is where discrimination comes to play.  

If you market a home for a family and an individual wants to buy it or vice versa - someone might feel discriminated against.

Posted by Yvette Chisholm, Associate Broker - Rockville, MD 301-758-9500 (Long & Foster Real Estate, Inc.) about 7 years ago

You never know where your buyers are relocating from, across town.. down the street, or half way around the world.  Marketing thoroughly "all over the internet"  on sites that have good SEO and thoroughly marketing the property.. lots of pics, details.. etc.. seems to me to be much better than trying to market to an individual segment of society and as Yvette mentions would appear to be violation of Fair Housing if taken to that level.   Interesting post though. 

Many people fill out listing notifiers and do receive emails about houses similar to the types of emails that you receive from Amazon though..

Posted by 1 ~Judi & Don Barrett & Chassy Eastep - Integrity, BS Ed, Integrity Real Estate Services -IDABEL OK (Integrity Real Estate Services 118 SE AVE N, Idabel, OK 74745) about 7 years ago

Dick as I read your post I thought about how California is moving toward a statewide MLS (with CAR having an ownership interest, hmmm).

What would happen if our MLS systems had a few fields on listings that told us what the sellers plans were when they closed?

So a seller in Northern California lists there house and completes the fields on where in Southern California they would like to move.

“IF” their listings met the seller’s criteria, listing agents in Southern California could forward information to the sellers.

First thoughts would need to think further, but I do think you are on to something.

Posted by David Gibson CNE, 719-304-4684 ~ Colorado Springs Relocation, Relocation, Luxury & Lifestyle residential (Colorado Real Estate Advisers LLC ) about 7 years ago

Your post piqued my interest, Dick!  We Stagers are always trying to refine how to make a house appeal to the target buyers - being able to pinpoint them accurately would be huge!

Posted by Julia Maher, Connecticut Home Stager (Nestings: Connecticut Home Staging and Model Homes) about 7 years ago

Dick, WOW!  You are so insightful. I would have suggested had it not already been approved and featured.  It's a deep intraspective thought process that I don't think most real estate agents tend to consider. Per the 4 color personality assessment, you are a green (analytical, numbers oriented) where as much as 80% of Realtors are blue (social bunnies).  For the record, there are reds (Just Do It/Leaders/Big Picture People) and Yellows (Emotionally driven).  I'd peg you for a green/red guy. 

It would be nice if we had sometype of algorithm but keep in mind, unlike a book or music (already printed/created) homes are more flexible.  Sometimes they are gutted and rebuilt, others as-is no matter how ugly and out of date the home might be so it may be more difficult to do than we think.

 

Posted by Cathy Criado, Making Real Estate Profitable (Criado Realty ) about 7 years ago

Thanks, everyone for your comments.

Hi Yvette - Interesting point, and I have to admit I hadn't thought about it, but now that I have, I'm pretty sure you could craft a targeted marketing campaign without violating either the letter or the spirit of fair housing law.

Hi Judi - But if I really knew that a specific buyer pool - and I mean specific down to individual names - had characteristics that made them statistically likely to be interested in my listing - something like "a family with 4 children living in a home they had owned for 5+ years less than 15 miles from my listing, with two wage earners", it would change the odds considerably.

Hi David - And that's another possibility. We could try to gather data about tastes and intentions that would make targeting much more powerful. Amazon does know what I like.

Hi Julia - And I'm sure that, if we had such data available we'd freely share it with our stagers - we both have the same goals.

Hi Cathy - Mary's my blue/yellow, so we've got the complete color wheel covered, and at times, total confusion and chaos.

Posted by Dick Greenberg, Northern Colorado Residential Real Estate (New Paradigm Partners LLC) about 7 years ago

I for one already tried to access this data but was told by my local board that no one was tracking this. Too bad. I would love to get my hands on this info. It sure would make my job easier.

Posted by Tammie White, Broker, Franklin TN Homes for Sale (Franklin Homes Realty LLC) about 7 years ago

Very insightful, Dick.  If it were as simple as Amazon (and I don't mean do downplay what Amazon has done in any way) then it would already have been done.  But I think you're really onto something.  If I knew where it was coming from, I'd look to get in on a piece of the pie.  You've got me thinking...

Posted by Peter Preston-Thomas (Real Ottawa) about 7 years ago

In order to track it we first have to document it.  What if when a listing is sold, we had to enter a few lines of anonymous data about the buyer.  Age range, property use, family size and structure, occupation?  The census collects that sort of thing, but it is never current.  We coud all request that out MLSs add these fields, then we could search it, extract data, whatever.  ARMLS adds fields weekly, it seems, shouldn't be a problem to add these. 

Posted by Marge Piwowarski, Phoenix AZ Horse Property, LLC (Phoenix AZ Horse Property) about 7 years ago

Actually I brainstorm this with sellers, trying to determine who the potential buyers out there are. Most Boomers are Fleeing steps and multi levels !

Posted by Michael J. Perry, Lancaster, PA Relo Specialist (KW Elite ) about 7 years ago

Dick ~ Amazon style technology for predicting where buyers for my area come from is something I have dreamed about. I think, similar to Cathy's comment real estate is different, especially when you add the ingredient of more than one decision maker.

Posted by Diane M. Phillips Realtor 443-286-4365, Specializing in Carroll Co., MD (Frankly Real Estate Inc.) about 7 years ago

Hi Dick -

Fantastic post!  I scrolled up to click suggest and see you've already been suggested.  Awesome!

Best regards from The Q

Posted by John McCormack, AlbuquerqueHomes.com, Albuquerque Homes Realty (Albuquerque Homes Realty * www.AlbuquerqueHomes.com) about 7 years ago

If Amazon.com sold homes? I think it's coming sooner that we think. Glad this one got featured.

Posted by Aaron Seekford, Ranked Top 1% Nationwide 703-836-6116 (Arlington Realty, Inc.) about 7 years ago

Dick - I so love your posts.  And congratulations on the feature.  This was so terrific in so many ways....thanks. 

Posted by Suzanne McLaughlin, Sabinske & Associates, Realtor (Sabinske & Associates, Inc. (Albertville, St. Michael)) about 7 years ago

Dick, congrats on the feature!  I wonder if this would be possible.  It seems like so many clients don't really know what they are looking for so how could a program or company figure it out?  This is definately something to ponder, you have my wheels a turning...  --Krystal

Posted by Krystal Knott, Breckenridge CO Real Estate & All Summit County CO (LIV Sotheby's International Realty) about 7 years ago

Dick  - That's a very interesting thought and probably something we should give some attention to before as you point out some other company or industry does.

Posted by Christine Donovan, Broker/Attorney 714-319-9751 DRE01267479 - Costa M (Donovan Blatt Realty) about 7 years ago

If you generate online leads and maintain a database, you should already have this data. I work for an agent that has over 1k+ leads in her websites backend that she knows exactly what type of homes they are looking at. I think the problem is with Realtors not maintaining a database and not generating leads. 

If you have a website that generates buyer leads and you have an IDX that sends them listings based on their search criteria, you can target those buyers in your listings price range with an email. She does this all the time when she gets new listings. She will tell her leads about the listing before it even hits the market to  peak their interst, just as Amazon does with emails. The only difference is that Amazon is autmoated based on algorithims, my client does it somewhat manually, but the system is in place.

These comments on this blog are kind of scary. As listing agents, don't you have a large database of potential buyers out there you can market your listings to? You should know what types of homes they are looking at, am I right? If not, I think that should be where you put your next investment. Building a database through IDX is exactly what you're looking for, and it's been around for a long time. Email me if you want to bounce some ideas around, I'm sure I can give you some excellent incite to how you can setup a system like this. I think you would be surprised with the amount of investment, it's really not that expensive. 

Posted by Chase Green, Utah SEO & Internet Marketing (Pursuit Troop) about 7 years ago

Hi Dick,

Great information and thought!  We do need to think more about how to use the available data and technology to make our business faster and easier for both buyers and sellers.  But there is a lot of emotion involved in the whole transaction cycle.  Not sure looking at a list of books to buy has nearly as much emotion attached.  And the process is different for the first time buyer versus the repeat buyer or seller.  Continued success to you and Mary!

Posted by Jordon Wheeler, J W Group Real Estate Sales and Service (The Jordon Wheeler Group) about 7 years ago

Excellent thoughts, Dick.  There is a lot to learn from companies like Amazon.  I can remember when they had been around for a couple years and hadn't made a dime.  I guess it took a while for their plan to kick it, but boy did it ever kick in!  Have a great day!

Posted by Mike Cooper, Your Winchester, VA Real Estate Sales Pro (Cornerstone Business Group Inc) about 7 years ago

What a thought provoking concept.  If it's external to us, it will most definitely cost us money out of our pockets.  I think that the difference between the books you read and the home you buy is price.  A book is comparatively speaking an impulse buy.  Most people (or maybe just me) don't spend a lot of time thinking about the book they're going to buy and certainly they certainly don't need to get financing for it! 

Posted by Nancy Pav, Nancy Pav, Your "GottaHave" Realtor (Long & Foster) about 7 years ago

Amazon vs. Google.

Apples vs. Oranges.

Products vs. Services

Directory vs. Search

Closed-end advertising vs. Search-result advertising

Posted by Lenn Harley, Real Estate Broker - Virginia & Maryland (Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate) about 7 years ago

I usually try and determine where the buyer will come from and spend a few extra advertising dollars in that arena.  Google, yahoo and all these SE we use daily store tons of material about buyers and sellers of all kinds!  Type in what type of buyer you are lookiing for or type in the sentence as though you were a buyer searching for that type of property and see what search results come up!  Usually on page 1 (of course!!) there are a few great ideas as to where to market your property or where to search for a buyer.  I have had good luck with this and I let the big SE do the work for me and they are always current whereas data we might get that is published once a year may be old news by the time we got it.

I enjoyed your post!

Posted by Teresa Tedder (Carolina Realty of Wilkes Inc) about 7 years ago

Dick -- you got me wired...will have to do some brainstorming with 'out of the box' ideas for different models of targeting, more buyer oriented needs...thanks. Peter Michelbach (9 Million Dollar Club) David Grace R/E Perth, W.A.

Posted by Peter Michelbach about 7 years ago

I too think you should have developed this already through a company.  My company even does recommended listings that the client has not seen, then you can send it in a few clicks.  Secondly, facebook has a great tool for advertising exactly as you had discussed.  you really do need to keep up on the technology.

Posted by Mark Welsh about 7 years ago

Dick, I think the demographics are out there without violating Fair Housing. Putting it together would be a huge task.

Posted by Michael Setunsky, Your Commercial Real Estate Link to Northern VA about 7 years ago

Dick, Google, Amazon, Facebook....one of them will come out of the pack soon and try to put individual realtors and brokers out on the street.  Sad.

Posted by Ron Marshall, Birdhouse Builder Extraordinaire (Marshall Enterprises) about 7 years ago

You would have to control the platform on which purchasers are searching (e.g. Trulia or StreetEasy in NYC). If you owned the platform, the data would be available to you.  Agents can't do this because they don't have the platform.  If your own website had enough traffic you could do it with the dataset there but the key to Amazon is that they have a huge market share to justify the effort.  

Posted by Kate Akerly, Manhattan Beach Residential Sales (Kaminsky Group) about 7 years ago

Since buyers continue to buy homes they didn't even desire when we first started searching, not sure how accurate data from anywhere would be. Would be nice to have this data though...

Posted by The Derrick Team - Indy Metro Realtors, Your Pet Friendly Realtors (Carpenter Realtors) about 7 years ago

Hi Everyone -

There is a bit of confusion about what I meant - which is not to say that your comments aren't great and full of food for thought. But I'm not talking about mining something like MLS or Trulia or an IDX site to see what buyers are looking at.

What I'd like to see developed is a statistical predictive model, based on actual home sales data correlated with other sources, that tells me in specific detail what types of buyers are buying what types of homes. Thus, if I had listed a 5 bedroom ranch with a finished basement in Loveland, CO, the output would say something like: 87% of buyers for that type of home in that region live within 15 miles of the home they bought; 47% were empty nesters, 35% had 2+ children; 67% were 2 wage earner households and 12% were retired; 76% moved from a home they had lived in 7+ years, etc. etc. And I want that data locally, not nationally.

That kind of data would let me identify a pool of prospective buyers for whom I could get names, addresses and probably e-mail addresses. Then I could market to that group.

Everything is available for such an effort, short of someone actually willing to invest the time and money in doing it.

Posted by Dick Greenberg, Northern Colorado Residential Real Estate (New Paradigm Partners LLC) about 7 years ago

Dick, excellent thoughts!!  

I am not a realtor, but one of the many who really want to get out of the "home ownership nighmare".    I am 35, married, 2 school age children our household income is between $75K-$130K (purposly being kinda vague) We have made a total 180 in the type of lifestyle and home we will want to live in next.  When talking to all of my friends who are very similar to me, most want the same thing.  

The mortgage payments should not exceed $1200/mo on a 15year mortgage.  Why??  because that is the max anyone of us is going to live in that house!  We need that place paid off BEFORE we have to pay for our kids college!  We want very well built homes, energy effecient, neutral architecture, no maintenance flooring (hardwoods,tile), smart design with huge kitchens/central gathering area, office for whole family to do work & homework, small bedrooms w/built-ins instead of closets eliminating furniture except a bed and occasional chair, seamless easy to clean/spray down bathrooms, no maintenance yards  that have enough sun if you want to grown your own food. We are sick of working our butts off to pay for the exorbant energy costs, maintenance, upkeep, etc...  on these rediculously large homes!

So YES the house will need to be smaller.  YES it will not be 3 stories, 4 baths, huge master suites w/sitting rooms, living rooms, dinings rooms, family rooms, office and then yeah you also have a basement media room...  that is just crazy!!  We need high quality affordable homes in safe areas. Unfortunatlly if you want to live in an economical home you usually are stuck in a high crime area. :(  Please prove me wrong!  I WANT to live in those 50's ranches again!

Posted by Lori Bonicelli (Bonicelli Design) about 7 years ago

Analytics is easy, securing the data is not, yet when you compare the data available to Amazon to your local MLS, the economy of scale isn't affordable to its members. Finally, most agents wouldn't utilize the information anyway, just my opinion.

Posted by Kimo Jarrett, Pro Lifestyle Solutions (WikiWiki Realty) about 7 years ago

Well, I think if we had a database of what people were looking at on all the real estate sites, we may be able to come up with such predictions.

Posted by Gabe Sanders, Stuart Florida Real Estate (Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales) about 7 years ago

Hi Dick,

Nice article and ideas.

That kind of data would be useful if it were easily available and affordable.

My thoughts are that in a reasonable active local market, an active agent should know where their buyers are coming from and what their basic demographics are simply by their personal interactions and those of their colleagues.

It does require one to be aware of this and to ask the question "whom am I speaking to".  This is dependent on several factors such as whether they're buying, selling, renting or investing, the size and style of the property, location, amenities etc....

I keep a paragraph of my typical Hoboken condo buyer profile and I include what their needs, wants,  fears and desires are.  It's a tool I picked up from Michael Russer, aka, MR Internet.

Whenever I design any marketing piece, I make try to make sure that I'm "speaking" to the right person.

Thanks again for sharing your thoughts!

 

 

Posted by Edward Perez (Sothbey's International Realty) about 7 years ago

Dick, what a well written post!  And colorful to boot!

Posted by Bob Miller, The Ocala Dream Team (Keller Williams Cornerstone Realty) about 7 years ago

Very thought provoking post. I have a couple of internet geek friends who've already done some back end work in RE. Maybe I'll put a bug in their ear about what you (and I) would like to have.

 

Posted by Deb McNeill, Fort Worth Real Estate (Flying M Team Small World Realty Fort Worth, Tx) about 7 years ago

I don't know if you're familiar with Seth Godin, but he wrote a book that explains the power of permission advertising. If you can find out who your target market is you can advertise to them in the right places and have a better chance of advertising to someone who will actually buy. You could start gathering this information about your customers with a good website and database. But I respect how hard it is to complete this kind of research, but I'm sure it will pay off as you hit your market with a rifle instead of a shotgun as you expressed earlier.

Posted by The Real Estate Professionals (Real Estate Professionals) about 7 years ago

Years ago Dunn and Bradstreet had that kind of info available in order to target market. I think you have to market to the internet and let it do its work. Pick whatever your poison might be and go for it,

Posted by Bill Reddington, Destin Florida Real Estate (Re/max Southern Realty) about 7 years ago

The closest thing that I have seen is those companies say they can target who the most likely sellers are in a limited geographic area.

Posted by Mike Henderson, HUD Home Hub - 303-949-5848 (Your complete source for buying HUD homes) about 7 years ago

Great post well deserving of the feature status. None of us have Amazon volume, but all of us have data in our own offices. We discuss "buyer profile" at all our meetings and make an effort to understand if new buyers are local, regional, or national. We try to categorize them by generation, profession, and interests. There's no reason not to have your own early form of an analytical approach to your buyers. 

Posted by Dave Roberts (Healdsburg Sotheby's International Realty) about 7 years ago

Very well written, thought provoking blog post.  I have enjoyed all of the comments made.

Posted by Kathy Sheehan, Senior Loan Officer (Bay Equity, LLC 770-634-4021) about 7 years ago

I'm afraid I don't see the connection. Amazon is marketing to YOU based on previous purchases, so they know  something about you. This isn''t true when sellinfa listing. You are marketin to people you have no prior experience with. You can make some assumptions about the buyer  based on the specs of the home. But you can't make any assumptions specific to the buyer. I always try to write a prifile of the most likely buyer of each listing, but beyond that I think the best idea is to try to appeal to the widest possible aqudience.

Posted by Linda Fidgeon, Make your next move your best move! (Berkshire Hathaway Homeservices Page Realty) about 7 years ago

What a wonderful topic! I have often thought the same thing. I have often wondered that Realtor.com hasn't come up with something like this. But until then, I use my email newsletter to do something similar. Subscribers are able to choose specific categories homes, land, farm and such. Not perfect but helps me narrow my target a bit. Then I am able to compile new listings or "feature" properties that I have in those categories to send them.

Posted by Larry Atkins (State Wide Realty Co.) about 7 years ago

Participate