Business/Economy

What the rise of big data means for homeowners and homebuyers

Most Alaskans enjoy their privacy. We love the lesser-populated spaces and the majestic beauty of remote locations. The respect for privacy is one reason Alaska is one of 14 states that do not disclose the purchase price of a real estate transaction in public tax records. Yet is this sense of privacy just an illusion?

In years past, someone would have to make a trip to the recorder's office or a title company to scour for public details about a specific person, home or neighborhood. A lender would usually order a tri-merge profile from the three leading credit companies to score your credit history, loan balances, previous residences, and public record information such as court records. However, as society has embraced computers and social media, more personal data is available about you, your home and neighborhood than you might realize.

We recently attended two presentations that showed the relative ease of obtaining "big data" for any number of purposes. "Big data" is all the small pieces of seemingly insignificant data that can be found in traditional ways and in digital formats. With advancements in computer processing and storage, sophisticated algorithms and analytical computations can combine seemingly unrelated data in order to do such things as track upcoming trends, forecast potential business opportunities, combat crime and enhance customer service.

One company's presentation promoted its customer relationship management service that was more than just keeping track of work activity and contact information of new and prospective clients. This CRM service integrated specific cellphone numbers with their software to automatically log client phone calls and data.

The amount of data collection was surprising. With a single call or text from a client, the client's phone number is used to cross-reference an enormous number of data points and obtain such information as name, address, email, carrier, line type, secondary phone, age, gender, household income, marital status, presence of children, homeowner status, home market value, length of residence, net worth, occupation, education level — even social media profiles and followers.

The second company combined publicly obtained information with more data purchased from a variety of other sources to obtain what they considered "law enforcement quality grade" information. Using different algorithms and analytical computations, they could rate the likelihood of an occupant selling or buying a home within the next six, 12, 18 and 24 months. That same information could be used to identify other possible marketing scenarios for a multitude of products.

The small changes in your data are what help to make these predictions. Here are a couple of examples. A social media post about your new baby, combined with a home considered to be small for an average family of three, creates the potential need for a larger home. A notification of a change in address lets a store know that you might be interested in an upcoming sale in the new location, so the store may offer an enticing discount. Surfing online for a particular product brings up numerous advertisements for other related products in your browser window, which also find their way into your emails.

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While this data mining may seem a bit like a science fiction thriller, you don't need to panic. Just be aware of how much information is available in the public domain and digital world about you and your family. The Federal Trade Commission website offers suggestions on how to protect your family and children's privacy at its Consumer Information section at consumer.ftc.gov under "Privacy, Identity & Online Security."

As digital devices become more prolific in our lives, you may not have much control over a lot of the data gathered by businesses and websites you use regularly, but you can be mindful of how much you contribute to the flow of data gathering through social media and other websites you use.

Barbara Ramsey

Barbara Ramsey is a local associate broker specializing in residential real estate. She can be reached at info@ramseyteam.com.

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