GUEST BLOG – Could Big Data Unlock Big Real Estate Commissions?
- By Turner Levison, Co-founder and CEO of CommissionTrac
We’ve all probably heard the term “big data” by now, but let’s talk about this HUGE concept in the realm of commercial real estate. Big data is the “in” thing for real estate technology. For all the talk of its benefits and various applications, what real estate agents and brokers really want from big data is to improve their bottom line. That's accomplished by either, a) more deals, or, b) bigger deals. How can big data play a role in improving commissions?
Marketing is one of the big real estate expenses. Here, big data improves your return on investment and reduces marketing expenses. Through predictive analytics, big data can identify a real estate agent’s contacts or prospects most likely to sell, lease up, or buy in the next year. Stop wasting your money mass-advertising communities or email lists. Focus efforts, spend less, and win more deals all thanks to big data. Ask yourself, how are you incorporating data into your marketing decisions?
Better data on pricing
Listing the property for right price attracts buyers and closes contracts quicker. Agents know cultivating a reputation as a closer attracts more deals. Additionally, having the right price for a property helps target its marketing to qualified prospective buyers. Big data provides a better understanding of neighborhood comparables, trends, and sale prices. This information informs agents on target list prices most likely to close the deal. Specifically we’ve seen NAR’s product RPR make big strides in this department! DO NOT SLEEP ON RPR, it’s a free solution for NAR members and affiliats and it could be be a game changer for your business!
Better neighborhood and location insights
Beat your competition to the next great trend. Track your searches to see what neighborhoods gaining interest or what features are in vogue. Nothing says “industry leader” than being on the ground floor of a new development or up-and-coming area.
Reducing investment risk
While no real estate project is ever a sure thing, we can use big data and predictive analytics to reduce the risk for clients. This information helps pinpoint the right development opportunities for lots and buildings. Predictive analytics forecast which business would suit a particular retail center best or where a new mixed-use development could attract the right tenant mix to fill the ground floor. Each successful development is a win for you and attracts more business from that investor or developer in the future. When you pitch a client, how do you incorporate data into helping them understand you’re on top of managing their risks and exposure?
Turn big data internal. Through daily activity tracking, you can identify which practices are most likely to close a deal. See how you spend your days and if this is truly an efficient use of your hours. Additionally, big data reveals the entire deal pipeline, including email marketing, cold calling, and client meetings, to identify practices that work to close deals. Stop wasting time on activities that don’t generate deals and more time on those that will boost your commissions. Once those deals are done and commissions earned, do you have a commission management platform that is automatically building your own internal comps database? If not, consider this my shameless plug for CommissionTrac; we help get brokerages and brokers paid faster with a streamlined deal approval process and easy accounting workflows for the back office to manage receivables and commission distributions!
Back to Big Data; leveraging data and gaining important insights is how the modern real estate agent and brokerages reduce their expenses and wins more business. The insights provided by the predictive analytics prove to your clients that you know your stuff. When clients are confident in your work, they will continue doing business with you and recommending you to their partners. More deals means more commissions.
Thanks for reading!
Turner Levison, Co-founder and CEO of CommissionTrac
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