TLC Engine, and More on Lifestyle Search
I spoke with Krishna from TLC Engine (True Lifestyle Cost) this morning, and he showed me Emerald Real Estate in Minnesota as a demo site for their lifestyle search technology.
I like the idea of searching based on the actual monthly lifestyle cost of a specific home. However, there is a downside to monthly cost as the search input. If your search is based on monthly cost, it could actually end up costing you significantly more over the long term, depending on the contract and mortgage terms. Though cars and real estate are completely different transactions, I am not a fan of the sales tactic staking everything back to monthly cost (when I bought my last car 10 years ago, that was all the salesman wanted to talk about). Smart buyers should be less interested in what it will cost them monthly, and more interested in the overall dollar amount.
TLC Engine has closed a few MLS deals, and it sounds like consumer engagement is high in terms of time on site.
I don’t question whether lifestyle cost is a compelling way to search for some people, but I do question how big that pool of buyers is. From my piece about lifestyle search this past fall, the core question remains:
It makes sense conceptually to search the type of lifestyle you’re looking for, and houses in one go. Same as it makes sense to search for travel destinations and hotel/flight listings at the same time.
But neither of those scenarios happen regularly. None of the big portals (in either vertical) are built for that.
It begs the question…why?
What do you think?
Bryn Kaufman
Posted at 18:26h, 08 FebruaryI think the idea makes sense. One reason you might not see it on more Realtor sites is it sounds like an estimate. Some brokers don’t like estimates, because if they are wrong it creates a liability problem.
For example, one big cost in my area is private schools, as many send their kids to private schools, as some of the public schools are not highly rated. For my two kids I figure it will cost around $500,000 to get them through high school. This is a big life style cost that is not even factored into their methodology, and that is where the liability issues could come into play.
Jeff Hoffmann
Posted at 21:12h, 08 FebruaryThe problem with things like TLC is that not only are they estimates, they’re bad estimates and not particularly useful to differentiate two houses for most shoppers. The differentiators you are able to pin down most accurately — things like taxes, insurance & commute costs are super straight-forward, readily available and easy to comprehend without a tool like TLC. Unless your commute is crazy long, it’s not going to affect car maintenance that much. A lot of the costs TLC tries to take into consideration (like utility bills) are really hit and miss as to their accuracy, and others are omitted all together — what are your projected repair costs in a 100 yr old bungalow vs a new town home? What type of fuel do you use for heat? What is the projected price in 5 or 10 years? If there are wood fireplaces, do you include the cost of cleaning? Is there a lot of shade? That may reduce your A/C costs. What are the condition of the windows? Maybe your heat is going to cost 2x what you expect. Even if you can get the current utility costs from the listing agent, how do you know if the house is kept warmer or cooler than you would prefer? If I move to the suburbs from downtown, how often am I driving back for a restaurant or entertainment venue or to see my doctor or visit friends in my old neighborhood? Maybe with my longer commute we end up eating take out more often. Or if I move into the city, maybe my grocery costs go up if I start shopping at local markets instead of a big discount chain supermarket. It’s really hard for an algorithm to know how you’ll be changing your lifestyle of what you’ll really need to spend money on with just a few facts about a house.
In the end, things like TLC feel like a half measure that gives you the illusion you’re working with a realistic budget and that’s probably not that much different than using that 1/3 of income estimate for what you can afford for a mortgage.
Krishna Malyala, TLCengine
Posted at 13:27h, 11 FebruaryHi Byran and Jeff,
Thanks for your comments and I agree with both are you saying.
This tool cam from my first hand experience from buying a home in NJ when I moved from HI. I wanted to know what is would cost to live on a monthly basis in any home. I found in NJ that two home priced exactly the same say $500,000 had huge amount of variations in Tax. You think its is a straight forward, look at the tax records of the and then divide by 12, then use a mortgage calculator for the monthly payment and then add the taxes back. My Taxes when up as soon as I bought my house next year.
Next to find my commute costs – needed to look at where my wife was working and I was and find a happy medium. Find our MPG of each car and then google maps to find out the distance finally I can get a cost (Mpg*distance*2*5 days of week). Then look at EZ-pass for tolls. Then we looked at taking public transit , just a difference in few stations to go to NY was a difference of $250/month. Even moving from one zip code to another for car insurance was a $600/year difference. We automate this whole process.
Lastly I moved from one bed room apt to single family house , being a first time home buyer I didn’t realize that utilities were going to be so high when I moved in. I just wish someone told me.
I would like to say that I am real estate agent for over ten years and have looked at the current tools available and felt
they feel real short when I was searching from my home based on what I could afford. We really felt all the people looked at was my prequalification letter and started searching for homes near that limit. We have done a ton of research on costs based on actual data based on type of lifestyles (Single, Couples, Families with kids and empty nesters) to come up with an estimate for utilities based on calculations from Dept of energy, weather data, MLS Data for type of heating with real surveys.
I don’t think we can predict everything and we do allow you to customize all the numbers to your lifestyle including add the cost of private schools. So data is just not available to the public. This is where Realtors come in and use this in conjunction with their buyers. We have seen real success and even some have gotten listings using the tool.
What we do is predict and automate a lot of calculators and provide in simple monthly search. Jeff, I don’t even know where to find some the costs , if you let me know I can add it to our data.
And Jeff just because the weather forecast is an estimate doesn’t mean it was not useful. I bet you look at weather every day. As the one commercial says 15 minutes can save 15% or more on car insurance, why would you want a better estimate of cost on monthly bases when buying a home , especially hidden costs. It is way more useful then estimates we get from current mortgage calculators out there.
Sep Niakan
Posted at 18:44h, 09 FebruaryToo complex for a user to understand. If they bought a house once a year, you educate the once and then remind them the next purchase and now its ingrained. But buy a house once every 5 or 10 years, and the buyer won’t ever “get it”.