Troy Palmquist is an indie broker in California with more than a decade of experience. His regular column, which covers a range of helpful tips for agents and op-eds on industry happenings, publishes Thursdays on Inman.
You might have read my recent article, “The best way to show your value to sellers in the first 2 weeks,” which centers on seller update letters. Today, I’m digging deeper to find out what the numbers really mean. And by numbers, I’m referring to the performance metrics of any given listing.
Is there a baseline for the number of views or favorites for a specific property that make that number good or bad?
What we’ve heard
According to MarketWatch, “Racking up the ‘favorites’ on Zillow make homes sell faster and for more.”
It reports, “Homes listed for sale on Zillow that get more attention from users sell more quickly and for more money because the popularity is often catching. Shoppers can use Zillow’s ‘favorites’ feature to save properties they want to visit, categorize, or share with others. And doing so tends to have a ripple effect among other users. The company’s analysis of its records finds that favorites seems to signal a property is desirable to other would-be buyers.”
Now more than ever, portals like realtor.com, Redfin.com, Trulia and Zillow offer a wealth of performance metrics for agents, but are these metrics reliable? Some seem to think so, others say they are inaccurate and confusing.
But most importantly, it is the interpretation of these metrics that seem to be messy. How are we supposed to explain what the data really means to our clients when we ourselves don’t fully grasp it?
One thing I find interesting is Redfin’s “Hot Home” feature, which is purported to make listings fly off the shelf. The company has started using a proprietary formula that assesses whether a property will go under contract within the first two weeks of being listed, known as the “Hot Homes” algorithm.
According to TruthAboutRealty.com, “It apparently has a 70% success rate, meaning 7/10 listings that are designated as Hot Homes by Redfin actually wind up going under contract during those first two weeks.”
Essentially, a “Hot Home” is defined as a home that Redfin thinks will sell within the first two weeks of being listed on the market.
The feature is generated by an algorithm that looks at user activity, including tours scheduled, favorites for an individual home, nearby market activity and many other points of data. Redfin claims, “This feature will motivate and possibly encourage potential buyers to schedule tours and submit offers.”
Additional reports reveal that the tech-based brokerage and referral provider crunches over 500 pieces of data to identify listings that are likely to sell within 14 days. It can also be a helpful tool for Redfin consumers and their agents in determining how they should organize their tour schedule.
Of course, this begs the question of how do I make my listing a “Hot Home” and gain added exposure on the site? Redfin doesn’t share the exact secrets behind its algorithm, but all signs point to listing low.
TruthAboutRealty.com says, “A lower asking price will result in the property showing up in more price-filtered search results, which should increase page views and interest, increasing chances of hotness. Asking for less than similar comps in the neighborhood will really heat things up!”
Other tips include taking quality photos, making the best photo the featured image, sharing your listing page on social media, favoriting the listing and ensuring prospective buyers can book tours easily — aka offer an open house schedule with lots of dates.
This makes me wonder — if I employ these same tips that trigger Redfin’s Hot Homes algorithm, will they aid in my property’s visibility and popularity on other sites as well?
The jury is still out, but it can’t hurt. In fact, I have had a listing reach “Hot Home” status only to find it sitting on the market getting stale, even though I implemented all of the above tips.
A lot of these are common sense listing practices that you should be doing anyway. So what is a lot when it comes to view and favorites? Is there a formula of view-to-favorites or view-to-opt-outs? If there is, I haven’t found one. But this data is so important! If we could better understand it, we could use it to our advantage.
One way is by staying on top of the metrics in your specialized market. I am constantly keeping an eye on what’s moving, for how much and why and also looking at the online views and favorites to see what could be driving the sale.
Although agents might not have a tried-and-true formula for evaluating view and favorite metrics just yet, they are important to look at just the same.
I have said it before, and I will say it again — Redfin and Zillow should make it their priorities to streamline these metrics and help agents understand their value.