With Terry Story, a 31-year veteran with Keller Williams located in Boca Raton, FL
During this week’s Real Estate Roundup, Steve spoke with Terry Story, a 31-year veteran at Keller Williams, about some of the fundamental changes happening in the real estate industry.
The Advent Of HGTV
Terry related that the advent of HGTV and shows which feature the home buying process have revolutionized the real estate industry. The entire process of buying a home is different now. People want the homes they buy to look like the homes featured on these shows. Terry noted that one result is that agents are doing more work on staging with sellers.
These shows have helped inform people about what they want and don’t want, and what a home needs to have to deserve the price tag it comes with. It provides them with the language they need to ask agents to find the homes they’re looking for. They know to ask their agents to show them specific models, with specific features. Steve concluded that, in short, “Buyers are a lot more savvy now.”
Technology Is Changing The Real Estate Game
The changes technology is bringing to the real estate game have been discussed in previous weeks. However, this week, the focus was on the buyers’ personal technology use.
“You used to have to visit a home in order to add or remove it from your shortlist,” said Steve. Buyers couldn’t make determinations about whether they liked a home or not without seeing it in the flesh, so to speak. This isn’t the case anymore, not with technology at everyone’s fingertips. In the past, buyers would have to give their agents the criteria they were looking for, and the agent would find homes to fit their wishes. The next step was a walkthrough. “And interestingly enough, the homes people often decide they like don’t really fit with the criteria they specified,” Terry pointed out.
Now, customers can do their own research before they ever step through the door of a home. They can quickly and easily search through home styles, layout plans, and do virtual walkthroughs to get a real sense of what they like and don’t like. By the time they’re doing their real-life walkthroughs, they’re much more locked in on exactly what they’re looking for, what will work for them.
Real Estate Websites
Real Estate websites are one final way that the real estate industry is changing. “What we’re really talking about, here, are sites that provide property data, historical facts, pictures, and automated variations,” Steve observed.
For buyers, it’s handy and sometimes crucial to have these facts before looking at homes. It’s also handy for agents. Buyers aren’t necessarily asking about comparable sales or how much to offer on a home anymore because they have the pertinent stats ahead of time and can make the decision on their own.
One thing that Terry did point out, however, is that sites like Zillow offer pricing estimates which are often way off. “It’s doing a pool of the area, the whole zip code, in many cases. It’s not providing estimates which are accurate to specific areas, truly comparable properties.” That’s why, despite the important changes real estate sites are making as far as providing information, it’s still important to pick a real estate agent that you trust and ask for their input.
Steve asked Terry specifically about how effective having an open house is for sellers. Terry replied, “Open houses do give your home additional marketing exposure, but are buyers buying homes just from open houses? The answer to that is no.” Only about 1% of buys are the result of someone just stopping by an open house and deciding to buy the home.
If you’d like to learn more about buying or selling a home, or to connect with Terry, check out Keller Williams.
Disclosure: The opinions expressed are those of the interviewee and not necessarily of the radio show. Interviewee is not a representative of the radio show. Investing involves risk and investors should carefully consider their own investment objectives and never rely on any single chart, graph or marketing piece to make decisions. Content provided is intended for informational purposes only, is not a recommendation to buy or sell any securities, and should not be considered tax, legal, investment advice. Please contact your tax, legal, financial professional with questions about your specific needs and circumstances. The information contained herein was obtained from sources believed to be reliable, however their accuracy and completeness cannot be guaranteed. All data are driven from publicly available information and has not been independently verified by the radio show.
Steve Pomeranz: It’s time for Real Estate Roundup. This is the time, every single week we get together with noted real estate agent Terry Story. Terry is a 31-year veteran with Keller Williams located in Boca Raton, Florida. Welcome back to the show, Terry.
Terry Story: Thanks for having me, Steve.
Steve Pomeranz: There are some fundamental changes going on in your industry, the way we buy houses, the way we sell them, how we use brokers and agents, and so on. And there’s three that I want to talk about right now.
Terry Story: Sure.
Steve Pomeranz: Change number one is, with the advent of HGTV, the whole buying experience has changed, tell us about that.
Terry Story: So yeah, everybody watches HGTV, and basically, buyers want … they want their homes to look like HGTV. When they walk in, that’s what they expect. And so, we’re now doing more staging with the sellers. We’re having to counsel them as to what they really need to do to get their homes sold for the highest price possible. So HGTV has been a good thing and a bad thing.
Steve Pomeranz: Well, if you think about it, in a person’s lifetime, they don’t buy that many houses. But every time they watch HGTV, they’re doing a walkthrough.
Terry Story: They’re doing a walkthrough.
Steve Pomeranz: Right? And they’re being shown a house. So after a while, you’re really going to get the lingo. You really get a sense of the landscape of what’s going on, right?
Terry Story: Yes. And I don’t watch HGTV, by the way.
Steve Pomeranz: Well, you work.
Terry Story: Because I work it, live it, breathe it-
Steve Pomeranz: Yeah, it’s the last thing you want to watch.
Terry Story: And I’m not going home and watching it.
Steve Pomeranz: Yeah. But the point is that they’re more savvy now, and they see features in the home that they really want because they’ve seen it on TV, and they’ve seen homes without it, and they decided this is-
Terry Story: And there’s so many other channels, other things with … besides HGTV that they’re watching, like Rebuild This Home-
Steve Pomeranz: That’s right.
Terry Story: … Make Me … Give Me … I don’t know, Make a Bid on This. And so, it’s kind of fun.
Steve Pomeranz: Yes, it’s fun.
Terry Story: And I don’t watch a little bit of that, but it does bring a different education level to the buyers and their perception of what a house should be.
Steve Pomeranz: Right, so everything has changed because of HGTV. Things have also changed because of the advent of mobile devices and the internet.
Terry Story: Yes, this is very true.
Steve Pomeranz: Yeah. So you used to have to visit a home in order to add or to remove it from your shortlist, but you no longer have to do that.
Terry Story: That’s right. So basically, what’s happened in our industry over time is the buyers will … working with a customer, we’ll set them up on a home search, and say, “Give us your criteria. We’ll set it up.” Well, while we’re doing all of that, they’re on their online mobile app going through their own properties and saying, “Oh, I like this one. I like this one.” And interestingly enough, the homes that they select isn’t the criteria that they told us they want to-
Steve Pomeranz: That’s so interesting.
Terry Story: Oh, it’s so frustrating.
Steve Pomeranz: Yeah.
Terry Story: And a lot of times too, a lot of the homes on the third-party sites aren’t actually active.
Steve Pomeranz: Oh, yeah.
Terry Story: So they’re teasers. They may be under contract. You don’t necessarily see that as the consumer. So it is a good thing because they’re able to do their own searches. They now tell us what they want to see. It’s more like they’re telling us what they want to see versus us making suggestions of what they should see. Now they value our opinion. They want our involvement and guidance through making these decisions, and say, “Hey, what do you think of this neighborhood versus this neighborhood?”
Steve Pomeranz: Sure.
Terry Story: Why should I select this over that? But they’re the ones that are in the driver’s seat making those decisions within 10 seconds, like the article states. Whether or not they’re going to swipe left or swipe right on that house.
Steve Pomeranz: Yeah, yeah. I don’t know, for some reason, this idea of traveling, let’s say you’ve traveled to Italy and you go online, and now you’re kind of an expert because you see all the hotels, you see the museums. But when you get there, it’s a completely different experience, and it’s really good to have a guide if you can afford to have a guide. They’re going to keep you away from the stuff that they think is less than desirable, really, and point you, with your limited time, to the areas that you’re probably going to want to see.
Terry Story: Yup, I agree.
Steve Pomeranz: And I think, it’s the same thing. So you’re, in a sense, the same type of guide doing that as well. So the technology is good, but in a sense it can be very misleading. Because as you said, you may be looking at homes that are no longer for sale, and so now you’re just-
Terry Story: You’re just wasting your time.
Steve Pomeranz: And you’re frustrated as well.
Terry Story: Yup.
Steve Pomeranz: Yeah. All right, change number three is the advent of internet real estate sites. Well, we’re kind of talking about that, sites that provide property data, historical facts, pictures, automated valuations.
Terry Story: Sure. That’s all good. If you know the facts-
Steve Pomeranz: That’s great.
Terry Story: … as a seller, today a lot of buyers don’t ask, “Hey, can you show me the comparable sales? I want to make an offer on this house. How much should I offer?” They seem to already know what the value of the homes are in that area, and they’re making that decision.
Steve Pomeranz: What value do you currently put on the pricing at these internet real estate sites like Zillow and Trulia, the pricing they have on the houses there.
Terry Story: The Zillow estimates?
Steve Pomeranz: The Zillow estimates, the Zestimates.
Terry Story: So, Zestimates? So basically those … that information is off. And the reason why it’s off is it’s doing a pool of the area, the whole zip code, in many cases. It’s not giving accurate by the subdivision, truly comparing comparable like properties. It’s giving you a general idea. And what it does do well is it gives you the trends of what’s going on, if you follow the trend remarks. But to look at your home, I hate when somebody will call up and say, “Well, my house just went down $20,000 in value.” No, it didn’t. Look at the trend. It just doesn’t work that way.
Steve Pomeranz: Right, right. First of all, it’s not a hugely liquid market. It’s not like the stock market where millions of shares are traded every single day. This is a house that’s sold here, and a house is sold there.
Terry Story: And it doesn’t know what you have in the house. Are you a renovated house?
Steve Pomeranz: Yeah, that’s right.
Terry Story: Are you a non-renovated house?
Steve Pomeranz: Also you may live in a community that is surrounded … let’s say it’s a gated community. It doesn’t have to be a fabulously wealthy one, but it could be just high-quality, and it can be surrounded by single-family, kind of lower-priced homes.
Terry Story: And they’ll pull that in.
Steve Pomeranz: Does the computer really know-
Steve Pomeranz: … where the boundaries are?
Terry Story: Are you on the golf course? Are you on the lake? Are you on a deep-water canal?
Steve Pomeranz: Yeah, it doesn’t know that.
Terry Story: There’s too many variables.
Steve Pomeranz: Okay. Well, that’s pretty cool. So I have a question for you. This is kind of outside of what we were just talking about.
Terry Story: Outside the box.
Steve Pomeranz: Realtors always suggest doing an open house.
Terry Story: Oh, yes, the open houses.
Steve Pomeranz: As a seller, am I really benefiting from an open house, or honestly, is it really a way for the realtor to market himself?
Terry Story: Okay, that’s a … can be a complicated question, but in the short answer, open houses do give your home additional marketing exposure. The question is, are buyers buying homes from open houses? That’s the real question. And the answer to that is no.
Steve Pomeranz: No.
Terry Story: It’s about 1%. With the internet and your home already out on the market, buyers that want to see that contact their realtors, schedule an appointment to go see it. They’re not just willy-nilly driving around, “Oh, let’s just pop into this one and buy it.” So, it benefits the realtor, because-
Steve Pomeranz: But other realtors are checking it out, too? Or is … or not?
Terry Story: We have ways of getting the word out to the broker community that we’re doing an open house through our multiple-
Steve Pomeranz: So do you see much traffic from other realtors?
Terry Story: Realtors will pop by, sure. If it’s a Saturday afternoon, and they’re in their area, they’ll pop in.
Steve Pomeranz: So doing multiple open houses is probably not all that effective?
Terry Story: You don’t want to do too many because then it looks like there’s something wrong with the house.
Steve Pomeranz: I see.
Terry Story: Why is the agent having to hold so many open houses on it?
Steve Pomeranz: Oh gotcha, all right. As always dealing and talking with Terry Story, a 31-year veteran with Keller Williams located in Boca Raton. And she can be found at terrystory.com. Thanks for being here, Terry.
Terry Story: Thanks for having me, Steve.