Zestimates and iBuyers have been around for years now, but have real estate agents embraced them? A new survey from real estate software firm W+R Studios indicates the answer so far is a pretty firm “No.”
W+R Studios, whose flagship product is comparative market analysis software Cloud CMA, fielded the survey “2020 Survey of Best Practices for CMAs and Listing Presentations” online from May 18 to May 31. The company sent the survey to its 298,520 Cloud CMA agent and broker subscribers, of which 3,325 completed the survey. Survey respondents hail from 46 states nationwide.
“Any agent creating a comparative market analysis wonders whether they are ‘doing it right’ or is curious about what other agents include or don’t include in their CMA. This survey gives agents an inside peek at the best practices of what goes into creating a winning CMA,” said Frances Wiseman, director of marketing for W+R Studios, in a statement.
The survey, which has a margin of error plus or minus 2 percent, found that, on average, the minimum number of comparable properties agents use in a CMA is five and the maximum number is 11. The vast majority of respondents use sold, active and pending listings as comps; less than a quarter used expired or withdrawn listings. Nearly all respondents, 95.5 percent, used their multiple listing service to find comps while 27.9 percent said they used CMA software to find comps. Just over a quarter said they used tax records to find comps.
Just over half of respondents, 52.6 percent, said they spent between one and two hours researching comps when creating a CMA. Just under a third, 30.6 percent, said they spent less than an hour researching comps.
Nearly three-quarters of survey respondents, 72.3 percent, said they distribute their CMA to a client at a listing presentation. Agents overwhelmingly choose to distribute CMAs in person (88.1 percent) while 65.3 percent choose to distribute them via email.
Nearly two-thirds (62.4 percent) of survey respondents said they “seldom” or “never” include Zestimates in their CMA reports while a similar share (65.2 percent) said they “seldom” or “never” included iBuyer information in their CMA reports.
An even higher share of respondents, 67.8 percent, said they consider Zestimates to be “slightly inaccurate” or “very inaccurate.” Only 1.4 percent thought Zestimates were “very accurate.”
This is perhaps not surprising given that industry rhetoric often pits agents against the computer algorithms on which Zestimates and iBuyer offers are based, though some industry players, including Zestimate parent Zillow, have emphasized that agents can use both to make themselves look better by comparison.
Agents may also want to just avoid adding too many elements to an already tough conversation. More than half of survey respondents, 52.7 percent, said the most common objection they heard from sellers at a listing presentation was “pricing,” followed by “commission” (29.5 percent). If an agent didn’t win a listing after a listing presentation, the most common reason why was that the seller went with another agent (38.3 percent), followed by “seller didn’t agree with suggested list price” (19.4 percent).
Asked why he thought agents weren’t using Zestimates and iBuyer information in their CMA reports, W+R Studios co-founder Greg Robertson told Inman via email, “For iBuyers I don’t think they have the scale yet. Currently Opendoor is only in 7-10 markets. Zillow Offers is expanding but it’s still not in a lot of markets.
“As for the Zestimate, I still think there is a lot of agents who either don’t trust Zillow or look at them as a competitor. I think it’s foolish that agents don’t include the Zestimate in their CMAs or part of their listing presentations. It’s usually the first thing a seller says, ‘But, Zillow said my house is worth this much…'”
Huntington Beach, California-based W+R Studios launched Cloud CMA in 2010, so why is the company fielding this survey now?
“We had the idea to do something like this for awhile now, but with the COVID-19 pandemic we knew things were starting to shift and we wanted to record that,” Robertson said.
While the vast majority of survey respondents, 71 percent, said they had never done a remote or virtual listing presentation, 51 percent said they were “very” or “extremely” likely to do one in the next six months.
“As sellers’ behavior has changed over time, including the recent global pandemic, so too have the ways to conduct a listing presentation. Remote or virtual listing presentations might become the new normal,” the survey report said.
W+R Studios plans to run this survey annually from now on. In the meantime, Robertson, who also authors the Vendor Alley blog, has another project in the works. He’s written a book titled “The Art of the CMA,” which will be released on Sept. 1.