Why and How Real Estate Agents Should Use Predictive Analytics
In this digital age, there is a question of necessity for real estate agents. People are confused as to why they should pay money for a person to tell them about a property or area when the information is available at their very fingertips. Today’s technology and data has given buyers, sellers, and investors access to the same information that real estate companies use . . . but that doesn’t mean agents are dispensable.
Why are agents needed?
Agents are in fact needed because the process of buying and selling is extremely overwhelming for an amateur. While people might be able to find information about the home and neighborhood online, there are other factors that are too complex to understand without the help of an agent. Knowing what should be included in a contract is reason in itself to seek an agent’s help.
People may value saving money by not hiring an agent but that doesn’t mean they won’t have to give something else up: convenience. Without an agent, handling logistics can get overwhelming and confusing. An agent schedules appointments for buyers to look at houses and for sellers to meet prospective buyers. An agent is also a guardian for for a buyer or seller because they are obliged to do everything to support their client. They can act as the messenger if things get awkward or tense between the two parties.
It’s usually during the online search when people come to believe that agents are obsolete. The information they need is in front of them and all that’s left is to visit the property. Nope! Here’s how agents should act from here.
How can agents prove them wrong? . . . Predictive analytics
Agents should not feel threatened by the available information through technology but rather, should feel empowered by it. Very simply, an agent’s experience plus a computer’s data is very valuable to clients.
There are many different types of predictive analytics that can enhance an agent’s service. If agents are more aware about consumer behavior, they can help sellers apply this information to their listing. They can also help meet buyers’ expectations.
But let’s take it to a further level — the real estate search goes beyond looking at pictures of a home’s interior and exterior. Buyers are looking at location, crime, job opportunities and a lot more to make their decision. An agent should be able to use predictive analytics to create a profile of what a buyer wants and identify the locations that will most likely appeal to them and meet their expectations.
With buyers who are looking for investment properties, they may not have as many personal expectations but they will expect returns on their property. This is an opportunity for agents to dig deeper with investors and appeal to them through numbers.
What should they do with predictive analytics?
Investment property predictive analytics is available and easy to look at. Still, buying a rental property and estimating its returns is a complicated process. Calculating and estimating returns is now done by investors making their own spreadsheets or using tools like Mashvisor. They calculate cash on cash returns, expenses, income and can find useful data like occupancy rate and tenant insight. Agents should also make use of this type of tool to be able to answer questions about returns and filter out properties that are unacceptable to their clients.
How much more comprehensible would this data be if an agent could make it come to life by offering more details to the numbers? For example, an agent and client find a property on Mashvisor and see that it has great potential returns and a high occupancy rate. The agent then tells the client about the neighborhood and the persona of the average tenant living in the area to help make the property suitable for tenants.
Furthermore, if investors are curious about how other investment properties are performing, that information is also available on the website but an agent has access to historical data like selling price and number of days on the market.
Beyond finding a property, investors will eventually need one important thing — tenants! Agents have access to leads and can put people in touch with their client’s rental property.
If an agent were to totally utilize predictive analytics, they could answer questions about where are the top neighborhoods, the most sought out properties, people looking to rent, best investment locations and advise about what to charge for rent, what expenses to look out for, how to reduce them, etc. Agents can essentially become an investing consultant by using predictive analytics in real estate.
Originally published at www.mashvisor.com.