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Open Competition Brings Innovation

Marketing is not the only area of real estate that is evolving with new technology.The collection of property data can now be carried out quickly and accurately for the benefit of agents and their clients alike, but what is driving the innovation behind the technology?Kent Lardner shares his opinion.

Through innovation, property databases are fast becoming powerful marketing and prospecting solutions.

In recent years we have seen a rapid expansion in web based technology which is helping the way we process and view real estate data. It has also made the real estate data market more competitive. Smaller companies are now achieving more and more with fewer resources, challenging the establishment by coming up with innovative products and services. Many of these technical innovations have helped our own company become a challenger brand in the marketplace.

Many things have changed in our market in recent years. Newspapers containing sales information that were once only collected and processed in hard copy are now available via the web. Computers have replaced large and expensive teams of data entry staff. Data listings and agent reported sales are becoming increasingly easier to collect, with real-time electronic feeds now becoming the industry standard allowing many sales to be reported and viewed within 24 hours. In the past you needed to spend millions each year to collect this data, but technology and innovation has now changed that forever. Technology has also helped remove many of the barriers to collecting sales data. Data standards can now be quickly tested by an agent and various providers compared. Agents do have a choice when it comes to data subscription providers in all Australian states, and this competition will bring about ongoing improvements to product features and competitive subscription fees.

The importance of open competition and the flow on effect it has on innovation has been highlighted in a recent speech by the ACC’s Ed Willett. Titled Australia’s competition law in practice, Willett stated, Consistency in competition policy and enforcement is needed in order for businesses to have confidence to innovate, expand and further develop.

Competition has brought about some rather big technology developments in the last few years. This includes Google maps and StreetView, who have taken mapping out of the hands of a select few experts and made it easy enough for even non-technical people to use. Certainly in the case of mapping, Google has helped foster competition.

Competition and innovation in our industry has enabled us to include Automated Valuation Models (AVMs) and user assisted versions of AVMs as standard (no transactional fee) with our subscription product. We now also offer agents the option to share free system access with any of your prospects and property owners who, for example, may wish to perform their own rental reviews or research the local market. Through innovation, property databases are fast becoming powerful marketing and prospecting solutions.

Although technology helps everyone process sales data more efficiently, humans will always remain a key part of the process. At the point in which a sale is reported, some errors will always occur. In a recent analysis performed by PriceFinder we looked at agent reported sales (agent advice) and compared it to government recorded data. We found:
* Up to 8% of agent advice can vary from government sales data
* Up to 99% of these incorrectly reported sales amounts can be detected

One innovative use of the PriceFinder Estimation tool (AVM) is for agents to verify sales errors. An agent can quickly run a price check on any sale(s) that may look odd. If the model displays a high confidence score (green traffic light) you can be reasonably confident that an odd sale price can be detected and remove it from your CMA. It can also be used to help you identify over-priced listings.

In an open and competitive Australian market, agents will continue to benefit from ongoing innovation.

Kent Lardner is the Chief Operating Officer and AVM designer for PriceFinder. Kent is one of Australia’s leading experts on AVM technology. Prior to designing the PriceFinder solution, Kent worked in a leadership role for Australia’s largest mortgage insurer. Kent specialises in real estate markets, property valuations and mortgage processing.

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