Why real estate agents are adding things like "value estimating buttons" to their web pages.
For a short time, some of the large "display" and "lead generation" real estate sites have tried to reduce valuing a home to a programmers equation. The surfer enters an address or some other identifying data, and voila! - a value appears. Unfortunately the value is often very incorrect. So, why are real estate agents adding "Value Estimator" buttons to their pages?
The addition of this type of "resource" to agent web pages is inevitable. As technology evolves and as agents learn more about how to use technology and as they learn more about how to provide information to the surfing public, they will make changes to their own web pages that will encourage surfers to visit. The move from the large real estate site has already begun. In April of 2007, the Northwest MLS and its 27,000 member real estate licensees will stop feeding their listings to sites like Realtor dot Com.
Agents are learning how to make their pages more effective by optimizing for search engines, advertising their domains, and by providing better local content than the conglomerates. "Value Estimate" buttons are a current example of these lessons learned. An "estimating formula" can be put on any web page for a "generic" valuation. It incorporates, assessment (each town can be near or far from market value), recent sales, recent sale to list price, days on the market, etc. The value is different for each town (and each agent) because the variables are different and are valued differently by agents.
Most agents and brokers have a similar formula in mind when they speak in general terms about a property. Because they are in their market on a daily basis, they can easily modify the weight that the variables have on their formula. Some of the variables they consider are list to sell percentage, days on the market, and assessed value when it is current. When the larger conglomerate sites started putting "Instant Value" estimates on their pages, agents and brokers looked for a way to provide a similar estimation equation.
Whether they use one they have developed themselves or use one of the free ones that are available, agents and brokers are adopting the technology that surfers are looking for. The struggle for most of the larger sites is, that evolving technology is available to everyone, and even the smallest companies often have very useful and informative local websites.
Many surfers are also starting to appreciate the ability of a local real estate web site to provide much more relevant and current local information about listings, taxes, schools, and businesses. Although many people use real estate as an excuse to surf the net, real estate has become one of the items consumers expect to be able to research when they get serious about buying or selling. Agents and brokers are quickly providing new information and improving their sites in order to make themselves more useful to consumers. Many brokers and agents often surf other company pages for technology ideas as well as "pocket listings".
Because real estate will always be a "one-off" purchase item, mathematical equations or computer programs will never produce a very accurate value. Market conditions, property conditions, location, social prejudice or preference, and many other variables make correctly valuing a property more than math. Equations are only as good as their variables - ask any economist, statistician, or pollster. And everyone knows (even if they don't admit it) that there are unseen preferences for location that are only understood by humans.
But, the surfing public likes to see things like the "Instant Value Estimator" button on a site, so agents and brokers are adding them. For every value that is near the target price of a home, there are many times that many values which are completely incorrect, and until computers become intuitive, most intelligent consumers will consult a human that knows the values in their town better than the button. As long as the "Value Buttons" aren't taken too seriously, they can be fun to use.
There are many other unique things on local agent pages that help consumers. Things like Lava Flow Maps, Pollution Reports, or explanations of the difference in a Septic versus a Sewer system are a few examples. Local real estate pages are usually the best source for real estate information, and agents are working hard to improve them for consumers.
So have fun with the button. And don't worry when thousands of agents and brokers pull out of the big sites. It is a natural evolution of the Internet, because agents are able to provide better resources on their own pages for consumers locally.
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