Big Data And The Future Of Real Estate Marketing
In The Wall Street Journal (WSJ), Stefanos Chen discusses how big data is being used in the real estate industry. He looks at the example of Jon Hoefling, a 50-year-old office-furniture resale company owner in Morgan Hill, California. Jon was thinking about selling his home and when he opened his Facebook page he saw an advertisement offering to estimate his home’s value.
This is not coincidence. Jon was just one of the many residents in the area targeted by the real estate agent who paid for the advertisement using big data and a sophisticated algorithm who identified him as a potential seller. Chen says there were a number of indications which identified Jon as a prospective seller, such as he had lived in the area for more than 15 years, his home was valued high for the area, and most importantly, his youngest son was about to leave home for college.
Jon’s information could have been collected in one of several different ways such as surveys, online audience tracking, industry statistics, subscriptions to publications he had, demographics, freely accessed public records and the list goes on.
Real estate giant, Sotheby’s International Realty, recently announced a partnership with Wealth-X, a consulting group who use public records and research to find out more about the interests and habits of the world's wealthiest 1% by collecting data such as incomes, investments, hobbies, titles, affiliations, family members, news, tax records and much more.
Using this data, Wealth-X helps clients such as JP Morgan, Barclays and McLaren, find prospective buyers for their products. They help agents determine who is most likely to be in the market for buying and selling, saving companies substantial time and money.
Managing Partner at TTR Sotheby’s in Washington Mark Lowham told WSJ they engaged Wealth-X to find a buyer for a $9 million penthouse that was about to hit the market. Wealth-X first established the most likely description of their buyers: previous homeowners with a combined income of at least $2 million and had lived in a house worth more than $4 million for at least five years. They then got into specifics, such as targeting art collectors because there was ample wall space and private plane users because the area attracts jet-setters.
Big data consulting firms such as Wealth-X use a combination of data from many sources to combine it with real estate contact database, then narrow down to a list of the most likely buyers, followed by leading a mail, email or calling campaign to the targeted buyers. While some real estate agencies are favouring the use of technology there are many that are concerned about the future roles of agents.