AVM

Hello all,

"AVM"

Thought this was a good read and a good approach.

Key Takeaways

• Price estimates are largely determined by an algorithm, as opposed to a real estate professional, and they often miss the mark when it comes to the final sales price.
• Consequently, agents are spending too much of their time addressing the misconceptions about AVMs, rather than focusing on the more important conversations they should have with their clients.
• Most consumers stick to one -- maybe two -- search sites total. When an agent presents clients with half a dozen other price estimates, it helps dislodge the clients' misconceptions. 
• Don't just use AVMS; overuse them.

One of the hottest discussion topics in real estate today is the presence of automated valuation models (AVM) — the estimated property prices on third-party search sites. Those price estimates are largely determined by an algorithm, as opposed to a real estate professional, and they often miss the mark when it comes to the final sales price.

Real estate agents are continually frustrated by consumers who see these price estimates and take them as a gold standard for what the asking price should be.

Real estate agents are continually frustrated by consumers who see these price estimates.

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Consequently, agents are spending too much of their time addressing the misconceptions about AVMs, rather than focusing on the more important conversations they should have with their clients.

The reality is that these AVMs aren’t going anywhere anytime soon, and since they are now a part of the real estate landscape, here’s an approach real estate agents use to make the most of them.

The best AVM approach to take

Let’s take the typical scenario where a client comes to you already having looked up what their house is worth on a third-party search site. They have that number firmly in mind, and now your hurdle is to get them to see a price that is more in line with the local market trends.

Typically, a real estate agent’s response at this point in the conversation is to point out the fundamental flaws with AVMs and steer the conversation toward why they — or any agent — are more qualified than a computer algorithm to come up with an estimate.

While this might be true, one drawback is the client’s skepticism that comes when they hear an agent trying to defend their role in the process.

Instead, try this approach.

When clients mention they saw the estimate on a website, pull out your own stack of AVMs from as many search sites as you can find.

Why it works

Most consumers stick to one — maybe two — search sites total. When an agent presents clients with half a dozen other price estimates, not only does he or she demonstrate being well-versed in what’s going on online, but they also immediately prove that any individual AVM is just a ballpark figure.

When a client sees six different price estimates for the same property, they can’t help but realize that the one they researched isn’t set in stone.

When a client sees 6 estimates for the same property, they realize theirs isn’t set in stone.

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This little preparation helps agents tremendously during a listing presentation because they don’t have to spend nearly as much time correcting misconceptions or trying to find that delicate balance of proving their value as an agent without coming across as defensive.

In addition to the free, public sites available on the Internet, Cloud CMA and Homesnap both provide comparative market analyses and include price estimates in their reports.

In short, don’t just use AVMs. Overuse them.

Enjoy the coffee,

Joe

INSPIRATION FOR TODAY:

 

"Opportunities are seldom labeled."

 

~ John A. Shedd
 

 

FILL IN THE BLANK!

 

From "Wellsprings of Wisdom" by Ralph Woods comes this story:

 

A successful businessman was invited to address a group of young executives on the subject of opportunities. He began his talk by tacking to the wall a big sheet of white paper and placing a black dot in the middle of the sheet. "What do you see?" he asked, pointing to the paper on the wall. "A black spot," called out everyone in the audience. "Yes, I see a black dot too," replied the speaker, "but none of you saw the much greater expanse of white. This is the point of my talk on opportunities."

 

While it is so easy to focus on the "black dots" - the immediate tasks that face us each day - how often do you grasp the opportunities that no one else notices in the white space? Don't answer that you haven't the time to notice the white space. Do you ever find yourself daydreaming? When you do, you're visiting that white space. The question is: Do you recognize your ability to bring those daydreams to fruition?

 

Look around you. Do you find yourself envying what others accomplish? Perhaps you can learn from their example. All they have done is to act on their dreams - to recognize the value of their white space and put it into motion.

 

So - what's missing in your life? Why not try filling in the blanks - the white spaces - with the achievement of your dreams? Maybe a legal pad and pencil can help. Try making a list of every dream you've ever had. Write them all down, all of them. When you finish, place an asterisk next to the five you would most like to accomplish or experience.

 

Finally, make those five items the "black dots" upon which you will focus until completed. Once identified, it becomes much easier to concentrate your attention on them. Opportunity knocks!