Using the Internet to buy or sell a home isn't eliminating role of real estate agents

Nation's housing

July 23, 2000|By KENNETH HARNEY

ARE YOU Internet-savvy when it comes to real estate?

Have you clicked your way through dozens of home listings on realty agents' Web sites, gone on virtual tours of properties before visiting them, checked out neighborhood educational quality, environmental problems, crime rates, household income levels, property taxes and other community profile data online? Have you shopped for mortgage money on the Internet?

Of course, you say. Doesn't everybody use the Web to help gather information to make real estate decisions?

Well, everybody doesn't. In fact, according to a national study of recent homebuyers and sellers, Internet users in real estate shopping are actually in the minority. Only 37 percent of a statistical sample of consumers who bought or sold a home last year said they used the Internet in any way whatsoever.

Those who did use the Internet were slightly younger - 36 years old vs. 41 years old for nonusers - and had higher household incomes ($69,900 for Internet shoppers vs. $55,800 for nonusers). Buyers who made at least some use of the Internet tended to buy more costly houses - an average $173,199 vs. $144,280 for nonusers.

But what did real estate shoppers on the Web actually do with their online access and resources? Were they able to eliminate any of the traditional intermediaries involved in a purchase or sale - real estate agents or mortgage loan officers in particular - to conduct their transactions?

Intriguingly, people who use the Internet to locate and buy a house appear to make heavier use of real estate agents than people who don't go online. Eighty-seven percent of online shoppers hooked up with a real estate agent or broker to handle their purchase at some point vs. 76 percent among non-Internet users. Nonusers were roughly twice as likely to buy directly from a previous owner - a FSBO (for sale by owner) purchase or from a builder - than Internet users.

The significance here is that contrary to the predictions of some dot-com pioneers, the Internet is not diminishing or eliminating the role of the real estate agent.

Nor is the easy availability of mortgage money on the Internet - from pre-qualification to closing the deal - cutting down significantly on buyers' use of traditional mortgage lenders. In fact, only 6 percent of buyers reported even applying for a mortgage online in 1999.

What the Internet appears to be doing instead is changing how consumers use traditional intermediaries like mortgage and real estate brokers. Consumers are viewing them less as a source of publicly available data and more as a source of professional guidance in complex financial transactions.

For example, 89 percent of Internet real estate shoppers in the study said they visited Web sites - either their own agents' sites or mega-sites like Realtor.com and HomeAdvisor.com - primarily to look at home listings in an efficient, convenient way. About one-third of all Internet-user real estate shoppers tapped into Web sites' rich lodes of community profile data - household composition, property values, school performance and the like. Forty-eight percent of Internet real estate shoppers visited one or more homes they'd originally spotted online with a real estate agent accompanying them. Only 28 percent visited houses they spotted online without an agent.

Another 15 percent went the complete distance: They bought a house they'd initially spotted online with the professional assistance of a real estate agent. Just 1 percent purchased a home they'd found on a Web site without involving an agent at some point. That should be good news to the National Association of Realtors, which sponsored the Internet research as part of its Year 2000 Profile of Home Buyers and Sellers. The study focused on a sample of 1,778 consumers nationwide who were identified by the giant household data firm, Experian, as buyers and sellers during 1999.

Asked what they found to be the most important features of real estate Web sites, online shoppers said the top attractions were:

The detailed physical information about houses listed for sale;

Multiple photos of properties, and virtual tours;

Maps showing the location of houses for sale within the town or neighborhood;

Community and neighborhood profile data.

Does the Web actually save home real estate shoppers time? The results of the study on this score are counterintuitive: 53 percent of all shoppers say that using the Internet did not reduce the total amount of time they spent from starting their active search for a home to concluding it. Both surfers and traditional shoppers spent about the same average eight weeks on the entire process.

But Internet users strongly believe their online access strengthened their ability to locate and buy the right home. Seventy percent of online shoppers rated Internet home searching as either "extremely valuable" or "valuable" against just 2 percent who said it wasn't valuable at all.

Kenneth R. Harney is a syndicated columnist. Send letters care of the Washington Post Writers Group, 1150 15th St. N.W. Washington D.C. 20071.

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