I am not a betting man, but, if I was, I would guess that less than 50% of the real estate agents know about Realtor Property Resource (RPR) which is a service every one of us pay for in our annual MLS fees. What is RPR and why should you use it (besides already paying for it)?
In short, RPR is a terrific program to help us gauge property valuation. Do you realize that, at the top of each MLS agent-version sheet, there is a triangular three-color icon just below the Virtual Tour Link and to the left of the “H” History icon? This is the icon link to RPR. Click on it, just for laughs.
What you will see is a valuation page for this listing. Now here is where I might lose you unless you have an advanced degree in statistical modeling. But take heart. I don’t and I use RPR on a daily basis.
You need to know a couple of terms. The first is Automated Valuation Model (AVM).
An AVM combines sales history, comparable real estate data, any available proprietary appraisal information and certain economic factors to determine market conditions and their impact on home values. Appraisers and lending institutions use AVMs to calculate probable selling value of residential real estate.
Don’t get hung-up on the lingo and stay with me here….
The property value you see will be based on a five-star Realtors Valuation Model (RVM) accuracy rating. What’s this?
“Accuracy” in this context refers to the model’s ability to predict sales prices within a certain margin of error a certain percentage of the time. AVMs are computer models that make many standard assumptions and are only as good as the available data. An AVM is considered to be excellent when it is able to predict a sales price to within plus or minus 10%, more than 85% percent of the time.
Let me translate from “statistical-speak” to “Realtor-speak”:
If the rating is five stars, then the stated value may be pretty close to what the current market value for this property is. If the rating is four stars, then the value could swing 10% in either direction (higher or lower) from the stated value. If the value is three stars, then the swing could be 20%. A two-star rating (or “Zestimate”) would indicate the stated value could swing 30% in either direction. Sound familiar?
If you want to learn more about RPR, please check it out at narrpr.com. You will look smart in front of your buyers and sellers.