Information is Power
We’ve all heard the term, “information is power.” But what does that mean in the Real Estate Industry? Let’s take a look at big time investors. What do they look at. Price of course. How do big time investors know if they are getting their best price? This applies to both the seller and buyer side. They check comparable properties in the general location. This is far more difficult for an industrial or retail property than for a single family home. They also look at local demographics. The key here is, “local.” It doesn’t matter what is on the other side of town with 32 competitors in between. The smaller the area is in the report, the more concentrated the information is. A new fast food store is concerned with local traffic. How many cars pass by in an hour and how many per day. What attractions are near by. You heard the term, “the most important thing in Real Estate is location.” Then why do people rely on websites to tell them a market price on a home they are going to buy or sell?
Website estimated values have major draw backs. They typically look at the zip code. Sure they have computer programs that give you an estimated price. The problem with computer programs is, garbage in – garbage out. What experience does the programmer have in Real Estate? What does the programmer know about your neighborhood? If major investors look at opportunities in a block by block spectrum, shouldn’t you take advise from successful people?
Websites have another problem. They want to increase site visits. The truth as it sits rarely attracts the flow of visitors those websites are looking for. So they add a little spice. They try to predict future market trends. A market crash attracts the most amount of attention. That is why you see websites predicting so many market crashes over the past three years when we have seen nothing but increased prices.
Those websites also predict high numbers of future foreclosures. The information is false, but it drives in repeat visitors. Those websites don’t have to be right. All they have to do is keep predicting news and information that brings in the maximum amount of visitors.
Websites sell ads based on number of visitors, clicks, time spent on the website, and a few other factors. Numbers are all those websites are concerned about. They could care less if you sell your home, or if you receive the right market price. On the other hand, a good, local Real Estate Agent only gets paid if the property is set at the right market price, receives an accepted offer, and closes. Real Estate Agents are paid after the closing. They have a lot riding on their local market analysis. They have to be right all the time. And they have the tools to look at a specific neighborhood for prices, time on the market, and actual sale prices.
Buying and selling a home is one of the few times when knowledge, the data you review has to be concentrated. It has to be local. It has to be up to date. And it has to be easy to understand. Get a report on the house you are selling, or looking at buying. No buyer or seller should make that final decision without a market report.