Spoiler alert, Zillow is going to win because we live in a culture that values celebrity over character. That “valuation” will cost consumers. Those willing to dig deep, will find success working with those who value character. Think Roy Hobbs in “The Natural” wherein he didn’t take money to throw the game – he won the game.
They may have meant well and might have been innocent inquires. One arrived to me the old fashioned way, with a stamp in the upper left hand corner of the envelope. The other came via social media. (We’re so connected we’re disconnected.) They posed the same question: “Do you want to know what your home is worth?” Each offered a complimentary home-value estimate.
To get my value information I logged into a website knowing this was going to alert an agent – who had paid to be part of the marketing effort – to contact me. Agents pay a lot of money to be part of apps like Zillow and Trulia and do this to generate leads. Whenever you enter information you become the customer, not the client. I was entering the “lead-generating zone.”
The instant estimates were provided in minutes. In one report the range of value was $371,000 – $402,000 and listed 14 “similar” condominiums – only 1 of which was a real comparable in terms of location and layout.
The second agent report, again provided within minutes, said the range of value was $479,000 – $565,000 with a likely price of $522,000. Two professional real-estate reports separated by $194,000. Real money.
Long before Ray Dalio, author of the book Principles spoke of “radical truth”, I spoke respectful truth. That truth involves research and life experience. It’s why I started Homebuyer Associates. In honor of Mr. Dalio let me try some radical truth about how things work (really).
1. We are a hurried society – quick news, quick analysis and quick home-value estimates. I’m reminded of the great UCLA basketball coach John Wooden who proclaimed, “Be quick, but don’t be in a hurry.” Remember this principle: Quick can Cost.
2. It’s business. The agents’ efforts to connect with me had nothing to do with my home value and everything to do with generating business to make a living. That’s capitalism.
What I don’t like is that the information is provided quickly as if a virtue… and is wrong. As if quick trumps truth. What the agent really wants is to sell my existing home and then sell me my next home – referred to as a “double pop” in the business.
Speaking of being hurried you will soon begin to see something referred to as “instant offers” or IBuying coming from Zillow and others. It will be in your best interests to understand the underpinnings of what this means to you.
3. The first estimate was off the true value of our condominium by $100,000. This isn’t an opinion but is based on actual sales of similar condominiums in the neighborhood. Does that mean I get to pay a $24,000 commission to an agent and sell my condominium for $100,000 less than value? Quick can cost.
4. The second estimate was $50,000 higher than the value of my condominium. In the real estate business this is called “buying a listing.” The agent offers an opinion on price, which far exceeds the real value…and the agent then gets the listing. Who doesn’t want to hear their home is worth lots more than they think? Over time the agent works the price down to where it really belongs.
This very thing recently happened to a past client of ours when they decided to sell their home.
By the way, what I’ve seen in the past year has caused me to start a consultant business to work in tandem with Homebuyer Associates to give guidance to past clients who want to sell. The goal? To protect past clients from some of the quirks of the real-estate business. I’ll have more on this in the future.
My radical truth: If you are not careful you may be sold a bill of goods and sometimes the bill of goods will cost you money. This can happen on the buying side and the selling side. I’m not saying all agents are bad. I am saying you must ask questions and understand what you are being sold.
I don’t pretend to have all the real-estate answers. While guarantees are difficult, the goal should be to increase the odds that things will work out to your advantage. We increase the odds when we don’t produce instant information – rather we gather information, provide opinion and produce results that favor you. It’s why we are Wisconsin’s most experienced Exclusive Buyer Agents having represented over 1,600 home buyers.
If you or someone you know is looking to buy a home and would like some radical truth feel free to contact Seamus Holloway (seamus.holloway@gmail.com), Mike Dupar (mddupar@gmail.com) or me.
Long before Ray Dalio, author of the book Principles spoke of “radical truth”, I spoke respectful truth. That truth involves research and life experience. It’s why I started Homebuyer Associates. In honor of Mr. Dalio let me try some radical truth about how things work (really).
By the way, what I’ve seen in the past year has caused me to start a consultant business to work in tandem with Homebuyer Associates to give guidance to past clients who want to sell. The goal? To protect past clients from some of the quirks of the real-estate business. I’ll have more on this in the future.