Real estate has always been based on the ability to build strong relationships. It will forever be based on your ability to connect with clients, but technology can give you a massive advantage over your competition. Now, a brand new innovation can take your brokerage to the next level, and give you that sought-after competitive advantage.
As technology advances, so does the incredible amount of data that is being created, collected and stored. You’ve likely witnessed how much data is at your brokerage’s disposal compared to even five years ago, but do you know about the insurmountable stores of information being collected behind the scenes? That big data is opening up incredible opportunities for brokerages that are willing to use it the right way.
Your golden opportunity is in predictive analytics.
“Big data is about collecting and processing huge quantities of data using multifaceted sensors. Predictive analytics deals with sorting this data with statistical models to come up with possible outcomes,” explains AI and machine learning expert Laduram Vishnoi.
So what is going to be your key to leveraging the vast opportunities created by big data and predictive analytics?
That answer is software specifically designed and tailor-made to dealing with predictive analytics in the real estate industry. It already exists, and the highest earning brokerages will be making the most of this new tech.
Here are five ways that predictive analytics software will change the face of the real estate industry this year.
1. Increased Productivity
Since the mid-2000s, real estate markets in Canada and the United States have seen turbulent times. Currently, in Canada (and especially in cities such as Toronto, Vancouver, and Calgary), we are experiencing a particularly precarious market.
How exactly can predictive analytics software increase a real estate brokerage’s productivity and help ride out the ups and downs of the market?
Leads can easily be pre-qualified by new programs that use big data to narrow in and predict the best properties for sale. This software may draw upon stats such as purchase dates, outstanding loan balances, owner demographics and owner life events.
For example, if the head of a brokerage wants to know which homes in a desirable neighbourhood are going to be put up for sale in the future, predictive analytics software is able to analyze owner demographics at high speeds. The software can instantly create a list of homes that could be for sale soon due to life events (such as newly retired residents). This can give brokerages huge advances on leads and a jumpstart on competing firms.
Brokers and agents are also able to control their inventory and databases in dynamic new ways that save time, and gets the right buyer in front of the right property for their needs. This new level of personalization extends to the overall client experience, which is a real game changer in an industry built on relationships.
2. Personalization of the Client Experience
As any good agent knows, highlighting the features of a home that are specific to your buyers’ needs is the key to making a sale.
At the end of the day, every buyer is a person with unique needs and desires. Being able to highlight vital features that speak to individual buyer’s needs can almost guarantee you’ll close more deals. This is where predictive analytics software can help increase the personalization of the buying experience.
Predictive analytics can crunch the vast amounts of data at a high speed — faster than any agent could in the past.
Having access to this kind of information allows agents to know exactly what features of the home and neighbourhood appeals to the specific needs of their buyer. This works particularly well for agents and brokers who deal with high priced homes with many amenities, as they narrow in on the ones that are irresistible to your buyers.
3. Accurate and informed predictive future valuations
Being able to provide an accurate and informed valuation of a property is essential to many real estate transactions – even if the buyer’s primary goal is not to purchase a property as an investment.
“Instead of spending time gathering data to analyze a few comps, today’s tools enable analysts to crunch numbers on hundreds of properties simultaneously to study pricing trends, understand market dynamics and make better investment decisions,” explains Forbes magazine.
When it comes to portfolio optimization, predictive analytics software can streamline buying and selling properties, by helping brokers make more informed decisions when looking at acquiring or disposing of a real estate holding. It can also help to close deals quicker, by pulling data from all clients and deals for analysis.
4. Planning new developments and build better spaces
As cities become smarter, building owners and operators are able to gather more data on how space is being used. This data requires in-depth analysis and at incredibly high speeds in order to use it for future planning of space within a pre-existing building and for future building developments.
Predictive analytics software can analyze this massive influx of data that would have otherwise been impossible, revealing how well future developments will sell or lease. You can also uncover patterns and help improve the performance of commercial spaces. It also provides dynamic insights into how spaces can be optimized (both in design and in tenancy).
5. More Objective Real Estate Appraisals
The traditional responsibility of an appraiser is to provide a value of a property based on a detailed report about its physical characteristics and recent sales of similar properties in the same market.
With the increase of big data and the rise of predictive analytics software, the real estate appraiser’s job has now become more dynamic, and they are able to provide a more in-depth and scientifically-backed analysis of a property.
In the past, it would have been incredibly timing consuming — and nearly impossible in some cases — to gather, process and analyze the amount of data relating to a property and neighbourhood that predictive analytics software is able to handle today. Appraisers are even able to use new technologies to look at future changes. For example, the addition of a new garage or a small room extension could provide a dramatic impact on the property’s future value.
With the right tools at hand, your firm will be smarter, more efficient and fully capable of gaining more profitable results.