Why Zillow’s ‘Instant Offers’ Pilot Program Doesn’t Matter

Zillow is testing a new program in a couple of markets.  They have a pool of investors who will generate an instant offer on your house, picking it up on the cheap without the time, hassel or expenses usually associated with an ordinary real estate transaction.

There’s nothing new about this. For more than a decade, investor groups have created marketing campaigns to help them identify home owners who will take significantly less for their properties to have a swift and hassel free transaction.  And there are people for whom such an offer has great appeal.

I think about my good friend who, at age 80, wanted to divest himself of a rental condo that was a mess.  He considered the value, and was about to list (with a Help-U-Sell broker!), when an investor group contacted him out of the blue.  They gave him about 80% of fair market value.  He took the offer because he wouldn’t have to clean the place, do extensive repairs, sweat out inspections and appraisals or pay many of the normal costs associated with a sale.  Yes, he lost money . . . or rather he exchanged some money for convenience and quickness.  For him, it made sense.

As the real estate industry continues to scramble and ‘innovate’ to re-establish an identity with consumers, some recent entries to the business have adoped a similar approach.  Open Door, now in Phoenix and a few other markets, is buying houses in much the same way.  They are marketing the program as a new approach to residential real estate, one that relieves many of the ‘pressure points’ that weigh so heavily on home sellers. (Translation:  they are buying low, paying cash, fixing and flipping).

The first time I encountered this kind of program was back in the 1970s, when ERA Real Estate built their whole marketing program around the notion, ‘If we don’t sell your house, we’ll buy it!’  It sounded pretty good.  But after a few years it became very obvious that they weren’t buying many (or any) houses!  The terms of ‘we’ll buy it’ included a sales price based on 70 – 80 % of value, and few sellers were willing to take that kind of hit!

The Zillow program – if it survives the pilot, which it should – will appeal to some home sellers;  but they are the same home sellers who are by-passing brokers to take a quick fix already.  It is competition for HomeVestors (the ‘We Buy Ugly Houses’ guys) and Open Door more than competition for us.

Listen:  we have the best program in the business for home sellers interested in making a move with minimum inconvenience while maximizing their hard earned equity.  While  40+ years old, it still looks wildly innovative compared to current alternatives.  Don’t get distracted!  Remember who you are:  you are in the Equity Preservation business!*  And nobody does it better than you!

*Everyone else is in the Equity Consumption business!  They are into taking as big a bite out of the seller’s equity as possible.  The ‘We’ll buy your house’ people are just taking an even bigger bite!

Focus Your Website: For Buyers? Sellers? . . . or Both?

The primary function of most real estate broker websites is pretty obvious:  provide information to and hopefully capture prospective buyers.  That’s why the home search function is usually front an center and why IDX is so important.  This is certainly true of Help-U-Sell Broker websites with their scrolling ‘Featured Listings’ and nearly dominant search field.

It makes sense too:  almost every bit of advertising we do, from For Sale signs with URLs to flyers with QR codes, is intended – at least as a secondary function – to drive buyer traffic to the website where quality information and powerful search tools deliver value that makes  buyer lead capture more possible.

But what about Help-U-Sell?  Our whole marketing thrust for 36 years has been to target Sellers, take more than our share of listings and let the listings create Buyer Leads.  Since the lion’s share of real estate marketing has gone online – and since a major portion of that online presence centers on the office website – isn’t there a disconnect between the heavy Buyer orientation of Help-U-Sell Broker websites and our own ‘Secret Sauce?’  Maybe.

I’m not suggesting that our Broker sites shouldn’t LEAD with tools and tips for Buyers.  As I said, almost all of our advertising is designed to drive buyers to the website where a value experience makes them ‘capturable.’  In fact, I want our guys to be pulling Buyer leads OFF Zillow, Trulia, Realtor.com and a dozen other online sources and offering them a better experience on their own Broker sites with language like:

Have you noticed that a lot of the listings you’re seeing on XXXXX.com are already sold?  Have you seen duplicates and inaccuracies?  That’s because that’s a National website trying to do a Local job.  They receive data from dozens of different sources and sometimes their machines have difficulty telling what is true and most recent.  How would you like to get up-t0-date access to the data in our Local MLS?  There is no better data anywhere for a home search here in Anytown.  You’ll be searching for homes just like I do, with the same information I use;  it’s free and easy to use.  Great – let me get your email address and I’ll set you up an account.

So, Buyer orientation and tools prominent on the first page:  YES!

But, are you also using your website to attract Sellers, to educate them about your program, to do the job so much of our marketing did in years gone by?  There are ways to do this you know.  Step one is to create a page (or pages) that provides the kind of information that caused Sellers to contact you in the past:

  • Sold and Saves
  • Testimonials
  • Easy Way/Smarter Way
  • Seller Savings Comparison
  • Brief Description of your program

Take out an old paper ETM – the one we delivered in thousands of mailboxes each month.  Can you build a page on your website with the same elements, presented in the same powerful way?  (By the way, the answer is ‘Yes.’  The tools are there and they are easy to use, especially when you have the Sarasota Tech Team standing by to help every step of the way).  The Sellers Savings Comparison has been up and operational for several months, and Robbie just introduced the new Sold And Saved banners (thanks to input from the great Brokers who attended this year’s Success Summit).

Step two is to start driving Seller traffic to this page, just like you drive Buyer traffic to page one of your Website.  That means first, buying an easy to remember URL for the new page, something like:  www.sell-and-save.com, and pointing it at the Seller page.  Then include it in every bit of advertising your do that may be seen by Sellers.  It also means taking advantage of new marketing opportunities to drive traffic:  QR codes on postcards that tease:  Find out how you can sell your home fast and save thousands.

I’m glossing over Step two rather quickly because it’s more about a way of thinking than anything else.  Attracting the Seller Inquiry has been so much a part of who we are that it is like breathing.  It’s automatic.  It’s a lifestyle.  But the real estate ditch of the last six years had us scrambling for Buyer Leads and Institutional Sellers, not genuine Seller Leads because they were (alas) non-existent.  It’s time to take the new seller tools we have for Broker Websites and become just as obsessed with exploiting them as we once were with our next ETM.

Step three is to build Landing Pages for your targeted call to action advertising.  These are simple fill-in web forms for gathering contact information on a potential client after an offer of something of value in return.  Here’s an example from the fine folks in Waynesboro, VA, Help-U-Sell Direct Savings Real Estate:  LINK.  This one is for a Market Analysis, something of great value to today’s homeowners.  You’d drive traffic to this landing page with postcards, flyers and other advertising, teasing:  Find out what your home is worth TODAY!

You might build similar landing pages for ‘Find out how you can save thousands when selling your home‘, or ‘Free E-Book:  How to Save Thousands When Selling Your Home.’  And so on.

Once again, when Boo probably would have been sufficient,  I’ve said Boo-H00-Hoo.  Forgive me:  I’m on vacation (Ole!).  But I hope you will take my enthusiasm for this topic and the new tools available to you to get back to doing what we have always been about:  Attracting inquiries from Sellers with our Superior Offer, Converting those Inquiries into Listings most of the time, and Letting the Marketing of those Listings drive a steady stream of Buyer Leads into our offices.

Building and Managing Your Online Presence

Nick Taylor from Zillow spoke to the Help-U-Sell team at our Success Summit last November.  He brought a wealth of good information, not only about Zillow but also about online marketing in general.  In the four months since I’ve heard from several brokers who have increased their lead generation success using what they learned.  Nick just revised that presentation and posted it online.  It’s still a presentation – and would be best with a presenter (Nick), but the slides are full of good information if you simply read them.  Here it is:

Nick Taylor’s Online Marketing Presentation

Please Do The Analysis!

On today’s Power Hour Web Conference, I asked all Help-U-Sell brokers to do a little analysis.  I asked them to see just how accurate the big real estate aggregation sites (Trulia, Zillow, et al) are in their local marketplaces.  I asked that they search for homes for sale in a reasonable, manageable price range in their own Zip Code on, say, Zillow  and then to compare those results with the same search done on the MLS.  This is the same experiment the broker mentioned in my last post did – the one where she found 159 bad or questionable listings out of the 220 her search turned up on the aggregator site.  But I’m asking Help-U-Sell people to go one step further:  identify which listings on the aggregator site are not in MLS and then find out why.  Are they duplicates?  Old sold listings that have not been purged?  Are they FSBOs or broker listings not on MLS?  It’s probably an hour’s worth of effort but I think it will pay big dividends.

See, the aggregators are getting slammed right now for having bad or stale data.  It is my belief that the housing information available on your own Help-U-Sell website with an IDX feed from the local MLS is far more up to date and accurate than anything a national site could offer.  What I want to do is document that – locally, office by office.  We can then start talking with consumers about this and (hopefully) switch them off the national sites (where they are vulnerable to any agent)  and on to our own.

Please, Help-U-Sell Brokers: Get Busy!  Do this book work and share your results with me.  And if you’d like a little inspiration, check out this article from today’s Inman News

 

The Flaw In Zillow’s Strength: Your Competitive Advantage

Yesterday, Kendra Gemma sent me a link to an article in the San Diego Union Tribune about the real estate syndication flap.  That, in itself, is pretty amazing:  Kendra, who is in Sarasota, is sending me a link to an article in my hometown newspaper!  (Here is a link to the article)

The piece was a rehashing of the syndication battle but focused on one of the underlying truths about the big aggregator sites (Trulia, Zillow, Et. Al.):  their data is littered with errors and inaccuracies.  It’s easy to see why:  Zillow, for example, receives real estate listing data feeds from dozens of sources.  Your Help-U-Sell listing may get to Zillow via your MLS, your ListHub account, Help-U-Sell, personal input, and on and on.  Zillow has an algorhythm that kicks in when it spots duplicate listings and grants priority to feeds they deem most reliable, but it has to recognize the listings in question as duplicates first.  So there are duplicates on Zillow.  And status changes are often mishandled by agents and/or syndicators, so there is the potential for many homes listed as ‘For Sale’ on Zillow actually being sold and closed.

One San Diego broker did a test last month.  She went ‘one of the popular real estate search sites’ (unnamed) and did a search for houses in her Scripps Ranch Zip Code:  92131. She then did the same search in her MLS and compared the results.

There were 220+ results on the search site.

• 54 were not for sale on the MLS

• 46 were condos, although she limited her search to houses.

• 24 had sold. One dated back more than a year.

• 17 were contingent.

• 10 were in escrow.

• 8 were expired, canceled or withdrawn.

If you do the arithmetic, there were problems with 159 of the 220 results!  The article mentioned that this particular broker has a problem with syndication in general, and I have no idea whether or not that played into the results, BUT I think you’d be wise to do your own search and comparison for your area.  And, please, when you do:  share the results with me!

(Before we go any further let me remind you that I LIKE Zillow.  They took an opportunity on which the REALTOR community turned its back and quickly became the home search tool of choice for consumers.  Bravo.  Now they kick off leads like crazy to brokers who are sharp enough to pay their price.  Instead of moaning about how wrong that whole scenario is, I think it’s wiser to recognize that at this moment in time, Zillow is a lead generating titan, and to find ways to tap into that flow of potential buyers and sellers. )

Here is a lesson in packaging.  I found it  not in the article, but in the comments to it:

Mark and Karla Stuart, Prudential California Realty:  We were so frustrated with the innacuracies created by all of the different IDX sites, including Trulia and Zillow, we created our own….exclusively for San Diego County. It is 100% accurate, and doesn’t waste our client’s time with “Pending” and “Sold” listings, and is updated overnight, every night. Our goal was to be 100% accurate with regards to what is coming from the realtor’s database, the MLS. Though expensive, it has served our customers quite well. http://www.freesandiegosearch.com

Wow!  Their website sounds like a dream come true!  No inaccuracies!  Just as up-to-date as the local MLS!  You can’t beat that! And you know what?  It’s the same IDX feed you have you your website. The feed you have on your Help-U-Sell site comes straight from the MLS, every night, and is as accurate as the MLS is at that moment in time.

It’s time to start working on how we communicate this to potential buyers.  It has to be done quickly and elegantly during the first meeting.  Something like:

Agent:  How long have you been looking?

Buyer:  Oh, a few weeks, I guess.

Agent:  You found me on Zillow, is that how you’ve doing your searches?

Buyer:  Yes.

Agent:  It is very easy to use, I know. . . but have you noticed how many homes on there are not really for sale?

Buyer:  Well, now that you mention it . . .

Agent:  They have a real challenge there; it’s because they’re trying to do a local job on a world-wide platform.  They get housing information from so many sources it even confuses them!  Listen, how about letting me give you access to the local MLS – without all the data from Boston and St. Louis and Puerto Rico gumming up the works!  You’ll have the most accurate and best information on houses for sale today in this market?

Buyer:  You can do that?

Agent:  Sure.  I just need an email address and phone number and I can set you up with a buyer’s account  on my website.  You can search to your heart’s content, save listings, even set up email alerts when new properties that meet your needs come on the market.  Plus, any time you have a question or want to see something, I’m just a click away.

Buyer:  Sounds pretty good.

It’s the same basic pitch the Listingbook folks use.  Of course, their feed is real-time, not once a day, and they have ways of tracking buyer behavior on their site that are very powerful.  But the same concept applies:  The most popular home search tool buyers have is loaded with bad data.  You can give potential buyers a better search tool without the inaccuracies.  I’m suggesting you set a registration threshhold on your website – use either option:  3 searches and then register or register to get detailed information.  When you use your dialogue and sign up a new buyer, you go into OMS, create a buyer account for them, and communicate it back to them via email.  By doing it this way (as opposed to having them do it themselves), you’re giving them something of value.  And since the perception of Value is a key consideration when choosing a real estate professional,  it could be the start of a wonderful working relationship!

(If you haven’t read our discussion about syndication, you can access it by following these links: Syndication Storm, Syndication Update, The Final Word on Syndication and Another Word on Syndication.