Smart data and predictive analytics is the bedrock of modern technology. The relevance of predictive analytics relevance is felt in almost all spheres, including AI, health, human resource, metrology, advertisements, etc. Another significant entrance in the long list is the real-estate industry.
Predictive analytics is incredibly important in real estate because it analyzes the data we have on homes, homeowners, neighborhoods, and current market trends. Then, using the analyzed data, a computer program can predict certain outcomes of the future, using the data collected from the past.
Specifically, predictive analytics can be used to predict who in your neighborhood is most likely to sell their home this year. And shockingly, the predictions are more than pretty accurate. Leading companies in this field such as Offrs and SmartZip have a 70% accuracy rate or more when predicting future listings. And realtors who employ this technology know who is likely to sell their property.
Could predictive analytics be the secret behind top-performing firms and agents? We know it is.
What is Predictive Analytics?
Predictive or advanced analytics is a technique that uses historical and real-time data to predict future events. For the realty industry, it provides info about the likelihood of a house being sold. It can also give insight into who the likely buyers and sellers are.
The technology proves its worth in the industry as it helps in lead generation and targeted advertising.
Why Use Predictive Analytics?
First, using predictive analytics during the geographical farming process can give you, as a realtor, an enormous edge over your competitors. For instance, let's say you are using a predictive analytics software, such as Offrs, and have selected to receive a list of people who are most likely to sell, using predictive analytics, in your area.
For example, let's say your area has a total of 1,000 homeowners.
Offrs proprietary algorithm looks at over 200 data points for every homeowner in your area.
Then, based on past data, Offrs predicts who is most likely to sell their home within the next 12 months.
Offrs has narrowed down the initial list of 1,000 homeowners in your area, down to 250.
Within the narrowed down list of 250 contain 70% of the listings that will occur in the next 12 months.
As we can see, using predictive analytics this way is highly beneficial for 2 main reasons: you are saving time and money.
Saves Valuable Time
You are saving time as an agent because all of the work is done for you. When using software such as Offrs, a high-quality curated list of verified addresses is uploaded to your Offrs profile once you select your territory.
Agents no longer have to scour the internet or MLS to find information about each homeowner. Now, agents can use online tools to complete this work in a fraction of the time. Not only is can Offrs produce and deliver accurate data to your computer screen in an efficient way, but Offrs will be delivering the necessary data you need to boost your ROI and save on marketing.
Like we mentioned in the sections above, using predictive analytics allows you to really hone in on the people you want to target.
Predictive analytics allows you to save an enormous amount of money. Let's continue with our initial example and break down the cost.
For this example, we will use the average cost of a postcard/ direct mailer, which is $0.70. The ones you are using may be more or less, so please keep this in mind.
Using predictive analytics we have reduced our initial farming area from 1,000 to 250.
Cost to mail out to 1,000 homeowners: 1,000 x $0.70 = $700 / per month
Cost to mail out to 250 homeowners: 250 x $0.70 = $175 / per month
Total savings per month using predictive analytics: $525
Now, let's break it down over the course of 12 months.
Cost to mail out to 1,000 homeowners: 1,000 x $0.70 x 12 = $8,400 / per year
Cost to mail out to 250 homeowners: 250 x $0.70 x 12 = $2,100 / per year
Total savings per year using predictive analytics: $6,300
After looking at our breakdown above, you can clearly see how predictive analytics can save you money. Now, let's take a look at how using predictive analytics can not only save you money but make you MORE money.
The math is adding up and you may be starting to understand why predictive analytics is so great. However, for the few of you who may have some additional questions about why predictive analytics is so revolutionary, we are going to address those concerns here and explain why you need to add this new tool to your business model.
For instance, you may be thinking: can't I just choose 250 random people out of my area to farm to and save the same amount? The answer is: you absolutely could. However, if you choose to do that, you are retreating back to the old way of traditional farming. Predictive analytics is more than just narrowing down your farm, it's about eliminating anyone who is not going to sell this year, and getting you in front of the handful who ARE.
The average turnover rate is about 5% per year. This means 95% of the people in your neighborhood are NOT going to sell this year. So why would you spend the majority of your precious marketing dollars on these homeowners? When, instead, you could use that budget towards a predictive analytics platform and get in front of the 5% who ARE going to sell and get rid of the 95% who are NOT.
This is how predictive analytics not only saves you money but increases your ROI.
This may sound too good to be true, but at the end of the day it's not magic, it's math.
How to Get Started With Predictive Analytics
Embracing this new technology can be a big change compared to the old way of farming and marketing, however, it will be one you won't regret. For example, agents who are using Offrs or a predictive analytics platform are increasing their listings enormously. To this in action, check out the latest testimonial from a top agent using offrs.com to generate listings.
Step 1: Schedule a Demo
Offrs has a highly experienced team that is educated in the real estate market as well as predictive analytics technology. Upon scheduling a demo, a sales rep will give you a call to overview the product and ensure it is the right fit. They can also create custom plans and marketing strategies that are tailored to you and your area. To lock down your area today please schedule a demo here.
Step 2: Select Your Area
The territory map Offrs provides includes territories of various zip codes outlined by the U.S. census. You can select one or more of these territories. Most agents choose a territory in an area where they already work and use Offrs to further establish themselves in that area, eventually becoming the go-to agent for that area. Other agents choose an area in which they don't currently work but want to establish themselves there and need a competitive edge. To select your territory please view our territory map here.
Step 3: Marketing
Once you have locked down your territory, you will receive the "Smart Data" from your territory. Again, this Smart Data includes the top 20%-30% of homeowners from your area who are most likely to sell in the next 12 months. In order to make your name known to these homeowners and establish yourself as the go-to agent, you will need to market or farm these homeowners.
Farming and marketing work best when it is consistent. Therefore, you want to make sure you are marketing to every homeowner at least once a month. The types of marketing materials that work best, typically, are direct mailers and online advertisements.
Offrs provides automated direct mails
How to Get More Leads in 2021?
To be successful, brokers need to employ various strategies for closing deals. Here are some tips on how to get real-estate leads in 2021.
- Target inherited homes and distressed properties.
- Organize free workshops and consultations.
- Build partnerships with other relevant stakeholders, e.g., insurance companies, investors, estate developers, etc.
- Agents should advertise their services to gain popularity.
- Develop a niche in a particular segment of real-estate, e.g., land, luxury home, student rentals, etc.
How Much Does Advanced Analytics Cost?
The price varies from one software to another. On average, it costs between $250 to $500 monthly. Whatever choice individuals make, quality should remain a top priority.
On a Final Note
There's no doubt. Advanced analytics has drastically changed the landscape of the real estate industry. Realtors are embracing it to work smarter and achieve better results. More so, its relevance and application in the realty industry are growing rapidly. Surely, now is the time to tag along and emulate other successful Brokers.