John M. Lee: Real Estate and the 'Net'

The Internet has been with us for quite a number of years now and it has changed our real estate industry from how consumers purchase homes, how homes are being sold and how Realtors and real estate agents interact with the public.

When real estate listings first appeared on the Internet, Realtors and their associations were worried that the Internet had the potential to replace them in the real estate transaction process. When companies such as ZipRealty and eHomes made their debut and offered services that on the surface looked like the services offered traditionally by Realtors, but at a reduced price, some thought that consumers would run to the 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, thus far, they have not delivered all they promised. And just like most other Internet companies in the beginning, they operated with heavy losses and are now in the process of adjusting their business models.

Currently, we have a better sense of how the Internet is influencing the real estate industry. Statistically, a recent survey by the California Association of Realtors indicated that 78 percent of buyers are researching properties and neighborhoods on the Internet before making a decision on what and where to buy.

Because they are doing their homework, consumers are more knowledgeable about the homes, mortgages and the buying process prior to contacting Realtors or loan agents.

This means their decision-making process has shortened. This also means that when they contact a Realtor, they are ready to purchase. Thus, the Internet-savvy consumer takes less time to buy and physically visits fewer homes before making a decision to purchase.

Buyers also have the advantage of previewing homes on the Internet before actually inspecting them. This acts as a filtering process whereby buyers can "view" homes, rule them out or only visit homes that have some initial appeal, thus saving lots of time. There has been many times that a buyer told me that they have seen the pictures on the web and as long as they are representative of the home, they are ready to purchase it.

Armed with more knowledge, consumers view the role of real estate agents in a different light. Agents are no longer the gatekeepers of information.

For the longest time, Realtors were the only ones with access to the multiple listing service (MLS) and if buyers or sellers need pricing and listing information, they had to contact a Realtor. Now that information is readily available, most consumers do their own research. They are looking for agents to act as advisors, negotiators and, sometimes, as therapists to see them through the stressful process of buying or selling a home.

Gone are the days when agents can just show homes to clients and expect them to purchase. Consumers are demanding more and that is one of the reasons Internet-based companies have not made much of an in-road into the real estate industry.

Because this is usually the largest investment of someone's life, buyers want someone knowledgeable to help guide them through the process.

Recently, one of my clients was wondering if I studied psychology in school because I led her through the selling process, held her hand and made her comfortable each step of the way. I believe that's the current job of a good real estate agent, making the process as problem-free as possible. I feel that it's a compliment whenever my clients tell me that they didn't know it would be this easy to buy or sell a home. I believe that is what consumers are looking for now. If a Realtor can assist and make the process seem effortless, then they will have done their job and everyone will have a rewarding experience.

The Internet is here to stay and the home selling process has changed and will continue to evolve as we work with this technology. One thing for sure is that it is bringing about positive changes to the real estate industry.

And those who do not embrace and learn to adapt to the Internet will be left behind.

Election Issues:

Each year in November I write about real estate propositions that are on the ballot. But to my surprise, there are none in this election.

However, we will be electing a new mayor with the front-runners being Gavin Newsom, Tom Ammiano, Matt Gonzalez, Susan Leal, Tony Ribera and Angela Alioto.

The mayor has power to influence rent control issues and sign off or veto significant proposals by the SF Board of Supervisors. Thus, it is important to vote on Nov. 4.

John M. Lee is a top-selling broker at Pacific Union specializing in the Richmond and Sunset districts. If you have any questions, call (415) 447-6231 or e-mail him at johnlee@isellsf.com.