Big Data is changing the way real estate agents work

WSJ reports how several real estate data firms are finding information on when home-owners want to sell and how to find prospective buyers.

Home owners who want to sell are targeted by online advertisements.

Mr. Hoefling, the 50-year-old owner of an office-furniture resale company, had been targeted for the ad—along with 1,500 others in California’s Silicon Valley area—by an algorithm that identified him as a likely home seller. The telltale signs: Mr. Hoefling has lived in the home for more than 15 years, and his home’s market value is high for the area. Most important, his youngest son will soon leave for college. Empty nesters might as well wear a bull’s-eye. (WSJ)

When Mr. Hoefling clicks the ad, a real estate broker receives a listing for the home.

Potential buyers can also be found with data.

To target prospective clients in competitive markets, tech-savvy agents are buying data subscriptions and teaming up with firms that identify potential buyers using increasingly precise metrics. Exotic-car owners can be courted to buy a car-collector’s mansion. Equestrians are rounded up for ranch homes

This information can be found out by crawling the net, looking at people’s pictures to see their interests and then sending them mail promotions.

Targeted marketing has the potential to eliminate dead weight in the economy by more efficiently matching buyers and sellers. However, we must also be wary of people who prey on the vulnerable. (e.g. Scanning obituaries for leads has long been a tactic of up-and-coming real-estate agents looking for new business. Today, the practice is getting a 21st-century makeover. Tracking major life events—marriage, divorce, death, all of which frequently entail a home purchase or sale—is big business for a number of new firms.)

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