NAR in the News

“You can find a statistic to prove anything you want to prove.”

Ever heard that before? Hope you didn’t believe it, because the fact is that surveys and market data are incredibly valuable tools that people use to make business decisions every day. Yet, we know that people cook up studies and surveys every day to support their point of view.

The problem isn’t statistics. The problem is BAD statistics.

To wit: A Northwestern University study released earlier this month found that people in Madison, Wisconsin, who sold their homes through real estate agents typically did not get a higher sale price when an agent's commission is factored in, usually 5 percent or 6 percent, than those who used a local for-sale-by-owner site.

This study was reported widely in the press, and many stories challenged NAR’s data on unrepresented sellers. NAR’s latest Profile of Home Buyers and Sellers found that homeowners who used a professional sold their homes for 16 percent higher on average than those who did not.

Which is to be believed? Are local FSBO sites like the one in Madison going to revolutionize the industry? (Add them to the list that includes buyer rebates, minimal service firms, national aggregators, and virtual office Web sites.) Don’t hold your breath.

Several points:

1. ALL REAL ESTATE IS LOCAL. Madison is a wonderful city, but it is only a small slice of America. Making national conclusions based on the operations of a single Web site in Madison makes little sense.

2. QUANTITY IS QUALITY. In surveys, the larger and more representative your sample is, the more accurate your results will be. Most national surveys sample 1,000 people and have a margin of error of plus or minus 3 percent. NAR’s annual Profile starts with questionnaires mailed to 100,000 people who have either bought or sold property—or both—in the previous year. Of those, 3,000 to 4,000 typically are returned. That’s more than three times the national average.

3. CONSISTENCY IS COMPELLLING. NAR’s Profile has been asking the question about average sale price for the past several years. The number has actually been growing, which is not surprising since most of the nation is in a buyers’ market. Year-after-year consistency makes a very compelling case.

Posted on June 22 at 04:56 PM | Permanent Link | Add a Comment (0)

"If you're a traditional Realtor®, then you must be against the Internet," a very good friend said to me the other day. His words caused me to pause and to consider the damage that is being done to our profession by the recent 60 Minutes segment and other stories that have created the impression that there are two kinds of brokerages today, those that use the Internet and those that don't.

First Point. The only reason that there is a real estate industry on the Internet in the first place is that listings are online--more than 4 million of them at any given moment. This did not happen by magic. It happened because the hundreds of thousands of brokers who own those listings signed up home sellers, put a listing together, and agreed to let their competitors use their listing to attract business. Then they built state-of-the art Web sites to do the same.

Foresight, cooperation, innovation, risk-that's what "traditional Realtors®" had to have to make it possible for today's "untraditional" brokers to get into business. Nowhere else in the world can you peruse so much property in your bedroom slippers. Indeed, what other industry allows one member to use another's inventory to attract business?

Second Point. Rank and file Realtors® are technology consumers of the first order. Our friends at the Center for Realtor® Technology recently conducted their annual survey of technology use and found that the average Realtor® spends more than $1,000 a year on new technology. Multiply that by 1.3 million Realtors® and you have a very large number. Morever, 25 percent of Realtors® spent more than $2,000 on technology in 2006, two-thirds of those surveyed have a real estate business Web site, and a quarter spends more than $1,000 annually to maintain their site.

Third Point. CBS, watch who you call a "traditional Realtor®." Those are fighting words!

Posted on June 14 at 11:56 AM | Permanent Link | Add a Comment (3)