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News

How the Real Estate Industry Is Monitoring You

New tools let agents turn your intimate data into potential sales.

By Geoff Dembicki 17 Apr 2017 | TheTyee.ca

Geoff Dembicki reports for The Tyee. His work also appears in Vice, Foreign Policy and the New York Times, and his book, Are We Screwed? How a New Generation is Fighting to Survive Climate Change, will be published internationally by Bloomsbury US later this year.

The real estate industry is tired of trying to guess whether you’re interested in buying or selling a home. It’s now adopting new technology that claims to predict your future behaviour with unnerving accuracy. And this technology does so by collecting and analyzing data you might not even share with family or friends.

Consider the following scenario: You and your partner are happily married and living in a home you bought several years back. Then one day, misfortune strikes. You’re unexpectedly laid off. Weeks of searching for new work turn into months. After a while the strain on your relationship becomes unbearable. You and your partner decide to file for divorce. You’re now alone and having trouble keeping up with mortgage payments. Out of nowhere you get an email from the real estate agent who originally sold you your house: “Have you considered downsizing?”

This scenario isn’t as implausible as it sounds. Some real estate industry leaders believe it will soon become standard practice. Already there are companies that mine public records and send notifications to local agents when a potential client gives birth, declares bankruptcy, gets married, files for divorce, applies for probate or experiences any other large life event that could make them more amenable to buying or selling a home. “The power of predictive analytics is still in its infancy,” argued the 2016 edition of the Swanepoel Trends Report, which is an influential tracker of the real estate industry. “But we predict this technology will be huge.”

Since that report was published, Swanepoel has tracked at least half a dozen new companies that offer some kind of customer prediction services. “We’re seeing it become a more standard feature of industry tools,” Jack Miller, the president and CTO of the Swanepoel T3 Group, told The Tyee. Most of this technology is being developed and adopted in the U.S. But, Miller continued, “I would expect as we’ve seen with other technologies in real estate that Canada won’t be far behind.”

The factors allowing real estate agents to predict your behaviour have existed for years. But only recently has it become possible to take advantage of them. We may think of the Internet — and the smartphones in our pockets — as tools connecting us to friends, colleagues and family. Yet the immense amount of personal data that our online lives produce is actually connecting us to advertisers. “As personal habits, preferences and lifestyles are increasingly being tracked, consumers are building digital roadmaps to their lives, which ultimately become fodder for a marketer’s next campaign,” reads the Swanepoel report. These data come in several forms.

Your basic demographic information is splashed all over the Internet. Anytime a social media app or website asks you to create an online profile, for instance, you’re potentially handing over data about your age, relationship status, income, political affiliation, career, hobbies, religious beliefs, past vacations or whatever else. That’s just one of the many ways that your information is collected and sold to advertisers. If at any point you’ve interacted with a real estate agent, whether online or in real life, you’ve likely also provided some personal data. The industry wants to collect as much information about potential clients as possible. “Let’s say you’re 38, you have been married for five years, you have two kids, you live in [a certain] neighbourhood, that’s very specific data,” Miller observed. “That kind of information is valuable.”

But the data that gets real estate agents really excited — or any other advertiser, for that matter — is behavioural. This is data about actual stuff you do: activities, events, habits. It includes things as potentially life-changing as closing a deceased parent’s estate, or as mundane as the amount of time you spend scrolling a realtor’s website. Behavioural data can be combined with demographic information to make creepily accurate predictions about your life. “For example, when the newlyweds with two jobs and an apartment start purchasing baby clothes, predictive analytics turns them into a real estate agent’s next ad recipient,” the Swanepoel report reads.

One of the pioneers of this tactic is a California-based analytics company named Benutech. Their ReboGateway system tracks public records for things like divorce and probate filings, foreclosures and tax defaults. “There are certain ‘life-events’ that, according to probability, will most likely result in a homeowner deciding to sell their home — if they get divorced, for example,” reads a write-up of the company on the RESAAS real estate industry blog. “As soon as one of these events occur in your area, ReboGateway will then send these leads over for you to followup with.”

Other companies include SmartZip, which collects private demographic data about specific neighbourhoods. “It filters that data by age of occupant, time in home, recent sales activity, income, education, consumer activity, home equity and several other demographic and consumer data points,” reads the real estate industry news site Inman. The goal of this is to identify the 400 people in a neighborhood of 2,000, for instance, who might be potential clients for a local agent. “Within a neighbourhood this group of people is the most likely to sell,” is how Miller described SmartZip.

But real estate agents can also get useful sales information just by going on social media. Since most of an agent’s business comes from people they already know or who know them, a Facebook or Instagram feed can contain many promising leads. “It’s kind of the modern version of going to the local pub, where you might go and listen and you’d find out that Sally and John are getting married or your friend Bill just got a promotion,” Miller noted. “Those are indicative of potential buying or selling activity.” He added, “Social media is just that online, it’s that writ large.”

To a certain extent this is just the world we live in. Anytime we go online we are giving away our personal data to advertisers — whether tacitly or not. And as the Swanepoel report notes, “Amazon will find items users are looking for, even after they have stopped shopping; Google knows what its users are asking before they have finished typing their question; and Facebook might even tell its users they are pregnant before they have the chance to tell their spouse.” “So this is a broad trend and we are following this specifically in the real estate industry,” Miller said.

Yet he acknowledged that as a society we haven’t yet thought through the potential implications of all this. Do we lose something of ourselves when everything we do or say is monitored, analyzed and then used to target us with advertising? “I think it’s a reasonable concern,” Miller said. But he figures that because predictive marketing is effective it will continue to be used. “Whether that’s good or bad I don’t know,” he added. “I think that’s a decision society is still making about how much information is too much information and I don’t think anybody has the answer to that yet.”  [Tyee]

Read more: Housing, Media

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