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In a shaky housing market, real estate agents often deal with clients who are ambivalent about buying a home they don’t know will at least hold its value.
For those real estate professionals, investment analytics company SmartZip recently launched a new service aimed at agents who want to help their clients understand some of the financial implications of owning a particular home and more confidence in whether it is a good investment.
The reports can be useful sales and marketing tools, "especially in this uncertain, fear-driven market," said Avi Gupta, SmartZip’s vice president of marketing and business development.
The company received a round of funding for an undisclosed amount from Intel Capital this week.
SmartZip’s reports look beyond the usual information provided in listings — the number of bedrooms and baths, price and square footage, for example — to tell its history of price appreciation relative to the town, county, and state it’s in. The report also provides ratings information for key performance factors like affordability, safety, lifestyle and job growth.
"(Clients) want to buy homes that are resilient to a down market," Gupta said. Agents can tell their clients whether a "home is expected to outperform the market in good times and bad," he added.
Risk assessments give buyers an idea of risk factors associated with the property, including potential for crime and natural disasters. The reports also estimate a home’s future monthly expenses and monthly rental potential.
"Agents have long been doing (comparative market analyses) to help clients understand what the market price of a home might be, but a CMA doesn’t tell you if (the home) will hold its value and what expenses go into it," Gupta said.
Pleasanton, Calif.-based SmartZip originally targeted residential real estate investors and provided "SmartScores" and "InvestorScores" to help them decide whether a home was worth buying. Earlier this year, however, the company broadened its focus to all homebuyers, and the SmartScore became "HomeScore."
A HomeScore indicates a home’s potential to appreciate in value. Rated on a scale of 1 to 100, a score between 35 and 65 indicates a good investment. A score below 35 indicates a fair to poor investment, and anything above 65 is considered a very good to excellent investment. SmartZip tracks more than 200 attributes from 25 different private and public property information sources to obtain the scores.
"We’re sort of the Morningstar or the FICO (score) for a home," Gupta said. "We’re not a broker and we hope our ratings and analyses can give homeowners an objective view."
Agents trying to show sellers the effect of pricing a house at a certain price point can use SmartZip Pro to plug in a certain price and see what effect that has on the house’s HomeScore, he said.
The scores are free and available on the SmartZip website. SmartZip Pro requires a subscription of $49.95 a month or $395 a year. Reports come with the subscription or can be bought individually for $29.95 each.
SmartZip was one of the startups featured at the Real Estate Connect conference in January. Originally only in California and Florida, the company has grown to cover more than 70 million properties nationwide. Prudential California Realty in Southern California, Prudential California/Nevada Realty in Northern California, and foreclosure data site RealtyStore.com are among the partners that have incorporated SmartZip’s investment ratings.
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