Real estate broker John Murray closed 1,709 deals in 2013 with his team of five agents, the most of any team reporting their production to Real Trends that year.
Murray, who owns the Rockford, Illinois-based brokerage KeyRealty Inc. and runs his own team, credits his success to his proprietary system that analyzes vast amounts of data to help him generate high-quality leads.
Whether they know it or not, “Realtors are in the business of big data,” Murray said.
Access to the insights made possible by the massive amount of data around housing, demographics, school rankings, social media and other sources of “big data” now available on a scale not seen before is changing the way brokers and agents prospect for sellers.
Historically, seller leads have been difficult to generate with lead gen tools because they typically come through the cultivation of relationships in an agent’s sphere of influence.
John Murray
Unlike buyers, sellers are usually rooted in the community they’ll be transacting in, and may already know prominent agents in the area from yard signs, local events, or through local friends and acquaintances.
But agents like Murray are beginning to leverage big data tools to get in front of homeowners looking to sell, or on the verge of selling, at the right time.
Getting in front of sellers at the right time is important, because 87 percent of sellers interview only one or two agents, and 70 percent choose to list with the first agent they interview, according to the National Association of Realtors’ 2014 Profile of Home Buyers and Sellers.
To determine the likelihood that a homeowner is ready to sell, Murray’s system takes into account info like how long they have owned the house, how old they are, if they have kids, if they’re recent empty nesters, the date of their last home improvement, and time it takes homes to turnover in their market.
Murray’s platform is proprietary, but it resembles solutions offered by firms like SmartZip Analytics Inc., Benutech Inc. and CoreLogic that mash up vast quantities of info, churn it through models and pinpoint which homeowners are most likely to sell soon.
SmartZip Analytics, which is available nationwide, has thousands of agent subscribers, according to SmartZip Analytics CEO Avi Gupta.
Subscribers to SmartZip Analytics’ SmartTargeting tool have access to detailed insights and analytics on each contact in the territory they’ve licensed. The platform, which is available in native Android and iOS mobile apps, also highlights the top 20 percent of homeowners in the agents’ territories who are most likely to sell soon. Agents can implement direct mail, online or Facebook marketing campaigns targeted to those sellers through a dashboard within the system.
One of eight startups in the 2014 class of the National Association of Realtors’ “REach” tech accelerator, SmartZip Analytics raised $12 million in a Series B funding round in July.
Benutech’s seller-prospecting tool, ReboGateway, alerts agents to specific events associated with homes in their “farm,” like a divorce or mortgage default, that signal an increased likelihood that the home will go on the market within a year (see chart below).
Using the desktop or mobile-optimized version of ReboGateway, the app’s nearly 30,000 subscribers can search for homes associated with the events ReboGateway tracks by drawing a radius around a property on a map view in the platform, or by filtering their search by city, ZIP code and other attributes.
The California Association of Realtors began offering ReboGateway to its 165,000 members in March as one of the products featured in its subsidiary Real Estate Business Services Inc.’s CAR Business Products Store. CAR members will receive periodic discounts on the platform.
Agents using SmartZip Analytics and Benutech say they’ve seen results.
Since signing up with SmartZip Analytic’s flagship product, SmartTargeting, in 2011, Tom Corte, an agent with ERA Matilla Realty in Playa del Rey, California, says he’s cut his marketing and lead gen expenses in half, while quadrupling the number of listings he and his team of five agents land each year.
His annual marketing costs went from $93,000 to $47,000, and his annual lead gen expenses went from $42,000 to $23,000, Corte said.
Todd Hennigar, broker-owner of Pridemark Real Estate in Orange County, California, uses Benutech’s ReboGateway.
Pulling data from county records, multiple listing services and other sources, ReboGateway alerts users to the occurrence of homeowner life events, like a divorce or death, which suggest an increase in the likelihood they will sell their home soon.
Propensity of “life events” to result in a home sale
| Homeowner “life event” | Percentage of sales within 12 months |
| No life event | 2% to 4% |
| Probate | 19.2% |
| Divorce | 22.1% |
| FSBO | 27.8% (agent-mediated) |
| Mortgage defaults | 52.0% |
Source: Benutech Inc.
Hennigar, who has been using ReboGateway for about six months, targets the divorcees the system spotlights by increasing the number of mailings he sends to their homes.
That strategy has already paid off. He sent one divorcee three mailings, which landed him the $1.3 million listing, which has since sold.
Todd Hennigar
While Hennigar hasn’t reduced his average monthly marketing spend of approximately $3,000, he says ReboGateway has increased his return on the investment.
CoreLogic’s Prospect Check provides a letter grade for specific prospects based on property value, equity, approximate income and potential foreclosure status.
“[Prospect Check] stops us from marketing to D-grade prospects,” said Rajeev Sajja, vice president of digital innovation at Berkshire Hathaway HomeServices Fox & Roach Realtors, which has over 4,000 agents in Pennsylvania, New Jersey and Delaware.
Though not a direct lead source, the tool, which integrates with Fox & Roach’s AgentAchieve customer relationship management platform from CoreLogic, provides qualified seller leads to agents, Sajja said.
Rajeev Sajja
When an agent plugs an address into the platform, Prospect Check spits out the household’s estimated income, public record data, date of the last transaction, the equity in the home, whether it’s underwater or not, its valuation and other data, Sajja said.
Before the year’s out, Fox & Roach will be launching another product from CoreLogic, ePropertyWatch, that automatically sends branded emails to homeowners on behalf of agents when triggered by CoreLogic info like neighborhood house prices, market trends and property valuations, Sajja said.
Big data leads still a lot of work
Corte says the SmartTargeting leads give him more confidence in reaching out to potential sellers the old-fashioned way.
He’ll walk his SmartTargeting farm areas — one includes 3,200 homes, another 2,200 homes — and knock on the doors of homes the platform has highlighted, he said.
Tom Corte
His team works the SmartTargeting leads hard. On average, he touches them an average of 70 times per year with door knocking, mailers and in other ways, he said.
When the SmartZip Analytics system highlights homeowners as likely to sell on two successive quarterly reports, Corte takes note and doubles his marketing efforts targeting those homes.
Homeowners highlighted by the system are sometimes surprised by the attention, Corte said. On one occasion he reached out to a homeowner flagged by the system who said he wasn’t planning on selling soon, only to get the listing within a matter of months.
The system seemed to know the homeowner would sell before the homeowner himself did, Corte said.
Behind SmartZip Analytics’ SmartTargeting
Generating seller leads was the whole idea behind the Pleasanton, California-based SmartZip Analytics, Gupta said.
SmartZip collects many types of data related to homes, homeowners, local housing trends and demographics and scrubs it against one of dozens of statistical models to suggest the top 20 percent of homeowners in any area (typically about 2,000 homes) who are most likely to sell in the next six to 12 months.
Avi Gupta
Each farm area of approximately 2,000 homes costs approximately $700 per month on an annual contract, Gupta said.
At the household level, the platform crunches data like the number and age of kids in the household; the owners’ buying behavior; last date of the mortgage; assets; profession; and length of time in the home.
SmartZip’s mobile app shows the homes most likely to sell in the area an agent has licensed. Homes marked with red are in the top 5 percent of homes that SmartZip’s algorithm predicts will sell soon. Homes in orange represents homes in the top 6 to 10 percent range.
To predict which homeowners are the most likely to sell, the system also incorporates neighborhood-level data like demographic shifts, changes in school ratings, status of the local job market, and migration patterns.
Every quarter, SmartZip’s algorithm runs both the home and neighborhood data through one of 130 hyperlocal models and provides subscribers with a list of the homeowners who the models shows have the highest probability of moving within the next six to 12 months.
Currently, the tool doesn’t get data from multiple listing services, but Gupta says the firm’s exploring how to work with MLSs to incorporate their data into the SmartZip platform.
The tool includes an automated marketing component with Facebook ads, agent-branded mailers, and targeted online ads that follow the target sellers as they surf the Internet.
Behind Benutech’s ReboGateway
By giving subscribers specific insight into the public data available about homes in their farm area, ReboGateway differs from SmartZip.
In most of the markets where it’s available — in Southern California, Florida, Texas, Nevada, Oregon and Washington — ReboGateway also gets MLS data, said Benutech CEO Ryan Marshall.
ReboGateway’s biggest asset is the data it collates from court records, local county websites and other sources around homeowner life events, Marshall said.
Like Murray’s personal big data platform, the idea for ReboGateway came from Marshall’s life as an agent. He would track some of the data that is now in ReboGateway in elaborate spreadsheets to help him gin up sellers.
Since the platform is linked to the MLS in many markets where it’s active, ReboGateway also tracks just-listed, just-sold and expired listings.
Users can also set up daily email notifications for specific properties in their farm and filter homes by city, county, ZIP code and date range.
In October, the firm added three new filters. One highlights likely empty nesters — homes with three or more bedrooms whose owners have been there for 20 years or longer. The other two filters spotlight homes whose owners live out of state, and homes purchased at the height of the market.
ReboGateway is planning to track additional life events by home, including marriages, births, bankruptcies and involuntary liens, said Andrea McColl, a researcher at Benutech.
In June, Benutech partnered with print marketing firm Corefact to make it easier for its ReboGateway subscribers to mail postcards, fliers and brochures to prospective sellers.
The service costs $44 per month per county, which includes up to eight farms of up to 1,000 homes each. Agents can pay more to track additional homes within a county.