Written by article default Tuesday, 02 November 2010 12:41
First, let me start with a couple of updates on the real estate market and the leading indicators.
A freeze on foreclosures for all 50 states by Bank of America (B of A) was announced about three weeks ago. They just announced that foreclosures will resume in about 23 states. B of A says, it has not found a single occasion where a foreclosure proceeded in error. "We voluntarily paused our process in the 23 judicial states, not because there was evidence of problems – there was not- but because we wanted to ensure our customers they are being treated fairly," said Dan Frahm, a bank spokesman.
"This draws a line in the sand that the banks expect their problems will be over in relatively short order and it will be back to business as usual. If B of A can do it, certainly the smaller ones will follow suit," said Guy Cecala of Inside Mortgage Finance.
Existing Home sales jumped 10% to a seasonally adjusted annual rate of 4.53 million in September from 4.12 million in August. However, this still remains 19.1% below the 5.6 million pace of September 2009 (when the first time buyers were ramping up in advance of the initial deadline for the tax credit).
Housing Starts moved up 0.3%. This is a minor gain, but a move in the right direction. Bob Jones, NAHB (National Association Home Builders) chairman, reports that "builders are cautiously responding to the small improvement they are seeing in the interest among potential home buyers. However, as consumer demand for new homes rises, a major limiting factor for a housing recovery continues to be builder's inability to access credit for new construction."
Now on to our topic – Real Estate information data services.
As a consumer, you have many choices for websites that provide access to real estate listings. They are not all created equal by any stretch of the imagination.
I hear my husband have this conversation on a regular basis with clients –"No, I can't tell you why on (fill in the blank third party website – i.e. Trulia, Zillow, Redfin) it says that property is still available for sale, but the MLS and the listing agent both say it's sold." He'll get off the phone and say to me, "Why don't they just use the service I've provided them that has the current info?"
In the Professional Real Estate Investor class, I introduce you to the sites that get you the most accurate data.
Let me explain what the differences are and why. There are three primary categories of property search websites:
1. Third Party Websites
2. Franchise Websites/Broker Websites
3. MLS Feed Websites
Third party sites have attracted a wide consumer audience because these sites are very "sexy" with a lot of bells and whistles. Many of these sites have listing data that is inaccurate a great deal of the time, yet consumers continue to visit these sites because they create a fun, engaging experience for consumers, while the professional sites simply have the best data.
Third party sites are defined by WAV Group (a professional real estate consulting firm) as: Consumer facing websites that are not operated or owned by real estate agents, brokers, associations or MLS's. Some of these sites include Zillow, Trulia, Homegain, Cyberhomes and many more. They have a significant voice if you look at how many consumers use them. Unfortunately, they also have the lowest accuracy and completeness of listing information. A study done by WAV Group showed that data accuracy and completeness of listing information that is published to these third party websites have a range of being inaccurate somewhere between 20% to 92% of the time. They get their data from a variety of sources and, unlike the MLS, which is controlled by strict rules and regulations, this data has very limited controls and therefore, higher rates of errors.
Third party sites can have errors with the initial data. The bigger problem is the update of that data, changes made to the listing, such as price changes, listings that expire, or listings that have sold. What this means is that websites managed by the MLS and Real Estate companies will always have the most reliable local listing information for a given market.
There are a couple of very positive things these sites do. Their interface is very simple, which creates very little frustration for the consumer. They also add the sizzle we talked about earlier – like Zillow's "Zestimates" for comps. They also add neighborhood information and other important data when looking at purchasing real estate
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