This past weekend, the Today Show spotlighted an interesting segment titled “The Science of Selling Real Estate.” As science was a part of my “past life,” prior to real estate state, this title held particular fascination. The focus was an interview with the Redfin CEO, Glenn Kelman who shared several “scientific” insights about Selling Real Estate. According to the segment’s introduction, …Seller’s should forget EVERYTHING their real estate agent had ever told them. Kelman who was being interviewed by Meredith Vieira clarifies at the beginning of the segment that Redfin (presumably the Redfin programmers) are computer scientists NOT sales people. The segment’s stated aim was to separate the Sales Voodoo from the True Real Estate Data. So, without further ado, we now compare the “Science” according to Redfin and the LOCAL Real Estate Facts in Grand Rapids, Michigan according to Grand Rapids, Michigan Real Estate Broker, Lola Audu.
1. Don’t Over-Price the home. This will create a longer marketing time and result in price reductions of up to 88% vs only a 97% reduction if the home is priced right. Kelman went on to say that real estate agents try to get home owners to sell as HIGH as possible. Huh???
Grand Rapids, Michigan Real Estate Facts: The penalty for over-pricing in Grand Rapids starts at about 25% and can go as high as almost 35% or more. Pricing the home is so critically important that the battle is getting home owners to be realistic in ACCEPTING the market price NOT Pricing a home above the market! Homes that were priced correctly did get about 96% ~ 97% of the List Price in Grand Rapids as well.
2. Be Web Saavy About Pricing Your Home. Kelman indicates that the web is where all the buyers are. Pricing Thresholds online increase in bracket of about $25,000 ~$50,000. Price ranges above the threshold can prevent your home from being seen by potential home buyers who won’t look $1 more. According to Redfin, you can loose 7% of your audience.
Grand Rapids, Michigan Real Estate Facts: In Grand Rapids, Michigan…the thresholds are much smaller. Our thresholds are between $5,000 ~ $10,000 price adjustments.
3. Debut Your Home on Friday. According to Redfin, their scientific study indicates that you should always debut your home on the market on Friday. The worst days according to Redfin is Thursday or Monday.
Grand Rapids, Michigan Real Estate Facts: If you debut your home on Friday and you are priced incorrectly, You WON’T SELL IT or have Tons of people looking at it. On the other hand, well-priced homes can’t be kept a Secret on Tuesday, Wednesday or Thursday either.
4. Look For Foreclosures in Your Neighborhood: According to Redfin, foreclosures can be a real problem in the market. According to Glenn Kelman, Real estate agents don’t include them in their market analysis.
Grand Rapids, Michigan Real Estate Facts: Once again I’m mystified by the source of this “science.” I just did a listing presentation today where I explained to the seller the implications of a real estate foreclosure in his neighborhood from a pricing standpoint. Good real estate brokers utilize all appropriate pieces of data when advising clients about pricing in their particular market.)
5. List Your Home on Craigslist: Your Real Estate Agent Wont’ Do This!
Grand Rapids Real Estate Facts: Once again, I’m surprised by the science of this study. A quick perusal will quickly show that many real estate agents list homes on Craigslist, Trulia and Zillow.com. Web savvy agents like those associated with Audu Real Estate create real estate shows which are shipped to Google and other web portals. Home seller’s don’t have to do this or rely on questionable science…they can simply hire a good Real Estate Agent!
When I was in college, the study of Science was carefully defined. The word science comes from the Latin “scientia,” meaning knowledge. How do we define science? According to Webster’s New Collegiate Dictionary, the definition of science is “knowledge attained through study or practice,” or “knowledge covering general truths of the operation of general laws, esp. as obtained and tested through scientific method [and] concerned with the physical world.”
The basis of the Redfin’s “Scientific” hypothesis was totally inaccurate! The presumption being that listeners were being given information they would NOT be given by a real estate professionals. Not only was this misleading…it was patently FALSE! As real estate agents, the items on the list are the beginning basis for our presentation. Our listing appointments go into much greater detail and depth. Perhaps, one old adage still remains true…You get what you pay for…or it could be stated…You charge What You’re Worth!
This interview demonstrates why it is vitally important for home owners and prospective home purchasers to rely on the services of qualified professionals. There is a good reason why computer scientist should stick to selling the software that sorts out data and let real estate professionals interpret the data intelligently.
Photo courtesy of White African’s photo stream on flickr. Glenn Kelman is seated front and center.
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