Local Market Knowledge is Dead. Long Live Local Market Data.

Local Market Knowledge is Dead. Long Live Local Market Data.

05-16-2019

Ask any old-fashioned real estate agent what they bring to the table that others can’t, and you’re bound to hear some similar answers: plenty of experience, a dedication to customer service, and the real clincher - local market knowledge. What local market knowledge is exactly is almost beside the point. It sounds great and soothes any concerns about the risk you are assuming when putting the largest transaction of your life in the hands of someone else - oftentimes a stranger.

But local market knowledge is dead, if it were ever truly alive and well to begin with. Here in the age of internet transparency, real estate knowledge has largely been democratized and made accessible to anyone with a smartphone.

Want to know which home improvements will actually increase your resale value beyond the cost of performing them? Or what kitchens with white quartz counter-tops will do to a home’s price versus dark granite? Plenty of information is out there for those who wish to Google it.

But having access to information and understanding how to properly interpret all of it before you are different beasts entirely. Buyers and sellers should be wary of old-fashioned agents who rely on local market knowledge to guide clients, when agents capable of analyzing local market data now exist.

How many times have you heard, “Oh, you don’t want to live on that block. What you really want is the house on…”? What is really being said here? What benefit is actually being offered to the client?

What do an agent’s feelings about each block in Frisco, Texas, for example, matter when the data instead rebuts it? The feeling of a block should be your last concern when actual data demonstrates that the land value of homes four lots in are discernibly higher than homes located on major thoroughfares.

Real estate agents who tell clients that they feel like a home is a smart investment or that they feel like an asking price is fair are relying on their personal judgment instead of the quantifiable data available. And buyers and sellers should run from any agent who offers advice based on their feelings when hundreds of thousands of dollars are at stake.

For every dollar in most home improvements you make, you will only make sixty to eighty cents back. For every foot a home’s ceiling height increases, the home’s value increases measurably. A properly staged home will fetch as much as 2% more than an empty home.

How do I know? Because we’re obsessed with local market data at Door.com, and constantly working on our algorithms to form real, data-based evidence to guide our clients toward the best possible deal.

Over the past 12 months in Frisco, for example, the market-at-large has seen a sale-to-list price ratio of 97.4% While that seems like a great number, at Door, our Frisco listings sell for an average of 98% of list price. The difference sounds small, but in a neighborhood with an average sale price over $461k, that amounts to more than $2,500 extra dollars our clients make.

Likewise, the average home in Frisco stays on the market for 65 days. But Door’s homes in the same neighborhood take just 44 days to sell. How do we do it? With up-to-the-minute local market data.

We’re passionate about analyzing information here at Door, just like we’re passionate about providing our clients with commission relief. That’s why I started the company. You won’t buy or sell a home often. But when you do, don’t you want to know that you’re doing it the best you possibly can? That’s what is possible by correctly interpreting local market data. The numbers don’t lie. And in an industry that has relied for decades on agents who feel like this home or that offer would be great for you – that’s disruption.

Alex Doubet
Chief Executive Officer at Door, Inc.

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