John M. Lee: Impact of the Internet on Real Estate

Are you looking to purchase a home? Are you looking to sell a home? Are you using the Internet to do your research prior to making these major decisions?
Congratulations, a recent survey by the California Association of Realtors indicate that 78 percent of consumers are performing some type of research on the web prior to buying or selling a home.
Just several years ago, Realtors and their association were worried that the Internet had the potential to replace them in the real estate transaction process. When pure Internet-based real estate companies made their debut and offered services that, on the surface, looked like services offered traditionally by Realtors, but at a reduced price, people thought that consumers would run to Internet companies for all their real estate needs.
These companies were heavily funded by venture capitalists and spent most of the money promoting the companies and services, but like the other dot-com companies, they burned through their cash and are now struggling to survive.
However, the Internet has brought on many changes in the way we buy and sell real estate and, as with any new technology, this has transformed the interactions between consumers and real estate professionals and I believe the real estate industry is operating more efficiently because of it.
Prior to the Internet age, Realtors were the keepers of the Multiple Listing Service, more commonly known as the M.L.S. This is a collection of most, if not all, of the listings in any given geographical area and contains information on current properties for sale and properties that have sold recently. Only Realtors belonging to realtor associations had access to this system, and thus buyers and sellers would have to go through Realtors to obtain information.
With the advent of the Internet, consumers now have access to this information through various web sites.
Initially, many real estate agents were concerned that buyers and sellers would bypass them completely and consummate transactions amongst each other or through discount real estate brokerage companies. We have not found that to be the case.
However, armed with more knowledge, consumers view agents in a different light. They want to work with agents who possess more knowledge and experience than before. Gone are the days when agents just showed homes to clients and expected them to purchase.
Because consumers have access to the MLS, with demographics, school district data, loan, and comparable sales information, they are looking for agents to act more as advisors and negotiators rather than simply being a provider of information.
An interesting trend noted in the survey was that the buyers who used the Internet to look for their homes actually spent more time doing research online and less time actually looking at the homes prior to purchasing. Internet buyers look at 7.5 homes on the average prior to purchasing versus 15.2 homes for a traditional buyer.
On the selling end, the Internet has emerged as an inexpensive medium for advertising and promotion. We have the capability to load many photos and even virtual tours onto web sites so that buyers have a good sense of what properties look like before visiting them.
This is probably why Internet buyers physically look at fewer homes. They have ruled out the ones they absolutely do not want to look at by inspecting pictures or taking virtual tours online.
The Internet is here to stay and the home-selling process has changed and will continue to evolve as we work with this new technology. One thing for sure is that it is bringing about positive changes to the real estate industry.
John M. Lee is a top selling broker for Pacific Union . For questions about real estate, call him at (415) 447-6231 or e-mail johnlee@isellsf.com.