In December, Victor Lund, a founding partner of the WAV Group, named the Automated Valuation Model (AVM) as one of the top five 2014 real estate trends. As National Sales Manager at Onboard, I speak with people everyday who are interested in our AVM. Oddly enough, hardly any of them are brokers. The vast majority of people who inquire about AVM are lead gen providers and/or portals. It seems to me that a brokerage could produce its own leads by using an AVM tool. According to Lund, we will see this shift on a national level as an estimated 39% of brokers plan to implement an AVM tool in 2014. Objections to using AVM range from accuracy to effectiveness to a need for the agent to be the “local expert.” Let’s dig a little deeper to understand how each of these reasons might be addressed.
- Accuracy - No data will ever be 100% correct. However, this doesn’t mean AVMs are going away. In fact, valuation models are on the rise, with more companies than ever creating unique versions. While no AVM provider can guarantee 100% accuracy, they can promise that if you do not offer it on your website, a user will go elsewhere to find it. Consumers are starting to expect AVMs in the market. You risk losing potential clients by not offering this tool.
- Risk of Undercutting the Agent’s Local Knowledge - An AVM is not the final authority. It simply gives the potential seller a taste. Ultimately, this tool will lead to discussions with real estate agents who can elevate the level of conversation and offer a Competitive Market Analysis (CMA). There is no better local area expert than your agent. The AVM is a tool that will undoubtedly help initiate meaningful discourse between your agents and their clients.
- Effectiveness – The AVM is extremely effective in generating leads. The more leads you bring in, the more discussions your agents have and ultimately, the more homes you sell. Brokerages and individual agents are purchasing leads from lead gen companies by the thousands. How do you think these companies are producing these qualified leads in mass quantities? One way is by utilizing an AVM. They set up a lead capture form somewhere within the process of telling a user what their home is worth. This then becomes a lead that agents and brokerages pay good money for. If it seems simple, that’s because it actually is. If you use an AVM tool properly, you can drive ROI through the roof by producing your own leads. Not only will this turn into more home sales, but it can also help you save by eliminating your costs to lead gen providers.
A successful brokerage generates business opportunities for its agents. The more you advertise, brand, and generate qualified leads for your agents, the more you set them up to win. To learn more, reach out to us.
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