Nov 3, 2020

Algorithms and Realtors

algorithm-2Find a table of Realtors and have them go around a circle describing what they do. Odds are, you will get some versions of the following:

  • ‘We make dreams come true.’
  • ‘We work with buyers and sellers to help them transact properties.’
  • ‘We bring transparency to real estate transactions.’
  • ‘We bring people together to solve problems.’
  • ‘We market real estate.’

Every one of those thoughts is true … but they don’t quite capture the cornerstone of our work, in my opinion. I strongly feel that the most important thing we do is that we value property—accurately.

If you’re in this business, and you’re doing it successfully, you’re making an incredible impact on the financial life of your clients. How you market your listings matters … the same way understanding deeds, inspections, RESPA, Fair Housing, construction materials and zoning matters. But the clincher of it all is understanding the underlying value of what someone wants to buy or sell. Do that well, and the rest of it will take the back seat.

Why Do We Feel This Way?

Because if we can help you understand the reasons why properties are valued the way they are, then you will make a decision that benefits you both now AND in the future. Right now we’re in a period  of volatile market swings and conflicting information. So we make it our number one priority to help clients make sense of this enormous financial decision, and to do that we have to push away the distractions and place the focus on value.

Algorithms and Data Are Everywhere

The internet has revolutionized the real estate business like nothing else in its history.

The web, and how we use it, continues to evolve. Every day some programmer figures out a new way to harness the power of technology to make better sense of the jaw-dropping amount of data available, and how to present to experts and lay people.

The key to these advances is in a word that everyone knows but few really understand: algorithms.


This is Zillow's algorithm to make short term adjustments to its short term pricing predictive model.  Seems simple enough to me...

This is Zillow’s algorithm to make short term adjustments to its short term pricing predictive model.  Seems simple enough to me…

Algorithms for categorization, algorithms for valuations, algorithms for recommendation—we are awash in algorithms, and they become more precise and powerful every day. Google is said to take into account over 200 different factors in how it ranks pages.  Zillow claims it recalculates more than a million of its Zestimates every day. The city (and counties) collect taxes based on valuing properties they have never been in and have to be able to defend if challenged. IBM claims to be able to determine the likelihood of someone dropping out of college based on how far from campus they live. Seriously?

But the reason they can make such claims is because of the underlying data.

Would Zillow be able to accurately predict the probable sales price for a contemporary infill town home project? Doubtful ...

Would Zillow be able to accurately predict the probable sales price for a contemporary infill town home project? Doubtful …

Agent Algorithms

There are two fundamental analyses that an agent does. She looks at the housing market overall. She also looks at the house, from the neighborhood that surrounds it right down to quality and origin of the kitchen appliances. This is where the agent adds value.

Good agents have their own algorithms, and the best can be exceptionally accurate. Good agents know which data is important, which data really translates into information they and their clients can use. Then they take that information and guide their clients through the best decision. Maybe they don’t take into account 200 different factors, but our models are strong because they take into account accurate and applicable local data.

  • Do you think Zillow knows the difference in value between north of Grace or South? Good agents do.
  • Does know that Woodland Heights recently received its historic designation … and what the impact will be. Your agent should.
  • Can Google accurately reflect the subtle but important differences between builder warranty departments? Good agents can.
  • Can any computer model tell you where the shrink/swell soils are in Richmond? An experienced agent can.
  • Can Trulia tell you how another agent negotiates? Once again, a good agent can.

Our Algorithm

You want to know about our algorithm? And what makes it better than Zillow’s or any other computer-based model?

Here’s ours: YOUR Best Decision = YOUR NEEDS + As Much Math as Required + Current Market Conditions + YOUR NEEDS + Schools + What is Available + YOUR NEEDS + Time of Year + Decor + Architect + Parking + Other Agent + Richmond + YOUR NEEDS + Timing + Development + Inspections + Lender + YOUR NEEDS + Builder + Trends + Whatever Else Needs to Go Into the Analysis + YOUR NEEDS

Why is our algorithm better for you? Because we tailored it for your needs. And do you know what else? If your needs change, so does our algorithm.

Our algorithm was written for one person – you. YOUR best decision is the most important thing, what you need and not what we think or the internet thinks or your buddy, your boss, your mother, your neighbor, or your dentist thinks.


When push comes to shove, good agents can improve the decision you make about an individual house far better than your basic über-computer run by any team of M.I.T. quants. Our algorithms bring in the data and the local knowledge that simply can’t be raked from a public database. Then we change them each and every day based exactly what you need.

All accomplished agents have advanced algorithms. We can’t always explain them, but they work extremely well.