One way to produce more accurate online property valuations than what you typically find could be to crowdsource estimates from real estate agents. While such an approach presents considerable challenges, there have been some recent signs that it holds potential.
- Services that crowdsource home value estimates from agents may be able to produce more accurate valuations than those typically found online.
- The likes of Homing In and Real Estimate may be able to generate leads for agents who choose to submit home valuations requested by homeowners through the services.
- Crowdsourced home value providers face challenges that could limit usage or discredit their valuations.
While such an approach presents considerable challenges, there have been some recent signs that it holds potential. One startup crowdsourcing home value estimates has gained some traction recently, while another just debuted.
These services will have to convince agents that producing a valuation for the possibility of a lead is worth their time, and they may struggle to find ways to deter agents from submitting unrealistically high estimates to attract prospective sellers.
Homing In, a Las Vegas-based mobile app that has pioneered crowdsourced-home estimates, can point to steady progress.
Homeowners who download the mobile app can anonymously submit photos and information on their home to receive an unlimited number of valuations from real estate agents.
Homing In has the most users in Las Vegas and San Diego, where the firm is marketing its app through mobile advertising campaigns.
Providing anonymity to users has been crucial to fueling adoption, said CEO Todd Miller, who is also the owner of Las Vegas-based brokerage Nevada Realty Solutions.
Since the service is a mobile app, users don’t even have to register email addresses to receive valuations. Agents who submit valuations simply have to cross their fingers that users will choose to contact them.
Home valuations offered by many agents through Facebook ads and various websites typically require consumers to hand over their contact information to receive estimates, potentially limiting their appeal.
But estimates served up by the likes of Homing In can provide something at least approaching the level of anonymity of those offered by automated home valuations like Zestimates.
And they one up automated valuations to some degree by serving up multiple estimates from professionals, rather than just one based on an algorithm.
One downside to estimates crowdsourced from agents, however, is that they aren’t instantaneous.
While agents can respond to valuation requests for free almost everywhere in the country, Homing In recently began charging agents for the ability to submit valuations in a number of ZIP codes where Homing In has seen high usage.
So far, 16 agents have decided to pay $99 a month for the right to send valuations to Homing In users in 10 ZIP codes each, Miller said.
Half of that fee pays for Facebook mobile ads that advertise Homing In to homeowners living in those ZIP codes. Homing In is promoting its app by offering $100 to every homeowner who lists their home with a Homing In agent.
Nearly 650 valuations have been requested through Homing In since the startup launched in 2012, and the app is now being downloaded about 40 times a day.
Homing In will soon launch web and Android apps to complement its iPhone app.
Miller claims that Homing In-generated valuations tend to be much closer to the sales price of homes than Zestimates, Zillow’s automated online home estimates. (Zillow recently supplemented Zestimates with a tool consumers can use to customize home value estimates.)
For example, one Las Vegas home that sold for $179,000 had received valuations of $170,000, $175,000, $177,000, $180,000 and $200,000 from real estate agents via Homing In. That property’s Zestimate, however, was $160,000 Miller said.
“Remember, we have pictures and notes and Zillow can’t see the inside,” he said.
Miller said Homing In has generated some listings for agents in Las Vegas, and expects the app to drum up many more seller leads as its new marketing campaigns attract users, Miller said.
Hoboken, New Jersey-based Real Estimate is another startup seeking to crowdsource online estimates from agents.
Homeowners can request a valuation from the startup on its website by filling out a questionnaire. The detailed nature of the questionnaire, which asks about both basic and specific property features, reflects an attempt to help agents who produce valuations to avoid relying too much on potentially inaccurate or outdated property tax records and home sales data. Users are also urged to submit photos.
Real Estimate sends a single report featuring estimates from three agents. Homeowners can click an email icon beneath every estimate that appears on a Real Estimate report to contact the agent that produced the estimate.
Agents who are approved to contribute home value estimates to homeowners via Real Estimate agree to pay a referral fee to Real Estimate should they close a transaction with a Real Estimate-generated lead.
As with Homing In, real estate agents do not receive the names or contact information of the users to whom they provide estimates. However, homeowners do have to register with email addresses or Facebook accounts to access home value reports, a requirement that Miller said will deter usage, based on his experience.
‘The consumer wants choice. The agent wants a deal.’
One possible barrier to adoption of services like Homing In and Real Estate may be that many agents might decide that it’s not worth spending the time to produce a valuation only for the possibility of getting contacted by a homeowner.
Miller counters that many agents pay for ads on listing portals that compete with the ads of other agents and do no not guarantee any contact from consumers. Still, agents do not have to put in any time or energy to surface those ads. Getting exposure through Homing In and Real Estate, however, does require some effort.
“The consumer wants choice. The agent just wants a deal,” Miller said. “We want agents that want to start a dialogue, not just hand them ‘leads.’ We don’t generate leads. We help them start the conversation.”
Miller also previously told Inman that coming up with home value estimates doesn’t have to eat up very much time for many agents. Agents can tap comparative market analysis (CMAs) tools and increasingly powerful multiple listing services (MLSs) to quickly polish off valuations, he said.
Too-high valuations to snare listings?
Another concern with crowdsourced home estimates might be that agents may churn out unrealistically high valuations in a bid to entice homeowners to contact them over agents who submit more realistic valuations.
Homing In previously had planned to show future users whether an agent tends to value homes higher or lower than peers.
That could partially guard against inflated estimates, but it would only be possible to implement effectively after many agents have been using the service for quite a while.
Real Estimate tries to prevent agents from gaming its service by assigning a benchmark value to every property and blocking estimates from agents that exceed that benchmark by more than 15 percent.
Some of these obstacles may explain why House Actually, a startup that tried to collect home estimates to generate “CrowdPrices” for consumers, called it quits.
“We just never got traction with users,” said Patrick Hunt, who founded House Actually. “I have ideas on what I’d do differently, but I’m holding them close for now because I may return to this idea and do it right sometime.”