John M. Lee: House Hunting on the Internet

Are you looking to buy a home? Are you looking to sell a home? How are people using cyberspace to help in the home buying and selling business? This month, we are going to look at how consumers have utilized the web to make the home buying and selling process more efficient.

Just several years ago, real estate agents 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, looks like the services traditionally offered by agents 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 did not deliver all they promised. And just like most other Internet companies, they are operating with heavy losses and are either in the process of re-thinking their business plans or else closing shop altogether.

However, the Internet has brought on many changes in the way we buy and sell real estate for the better. And as with any new technology, consumers have found the best way to use it and I believe our industry is operating more efficiently because of it.

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 where and what to buy. Consumers are more knowledgeable about the homes, mortgages and the buying process prior to contacting any real estate or loan agents because they are doing their homework.

This also means that when consumers contact an agent, they are ready to purchase. Thus the Internet-savvy consumer takes less time to buy and physically visits fewer homes before making a purchase decision. This is a direct result of having more information and knowledge about real estate.

However, armed with more knowledge, consumers view agents in a different light. They demand agents who possess more knowledge and experience. Gone are the days when agents could just show homes to clients and expect them to purchase. Because consumers have access to the multiple listing service (MLS), demographics, school district data and loan and comparable sales information, they are looking for agents to act more as advisors and negotiators rather than simply as providers of information.

I recently was talking to a couple who was interested in purchasing a home. They had just "fired" their agent because they felt the agent only gave them a list of homes to look at during Sunday open houses, which they could read in the Sunday paper as well as their agent could. We, as agents, need to do better than that.

On the selling end, the Internet has emerged as an inexpensive medium for advertising and promotion. We have the capability to load photos and give virtual tours on websites, so that buyers have a good sense of what a property looks like before visiting it. I have had several sales where the buyers visited my website, liked what they saw, inspected the property and purchased it.

The Internet is here to stay and the home selling process will continue to evolve as we work with this new technology. One sure thing 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.

John M. Lee is a top selling broker for Pacific Union specializing in the Richmond and Sunset districts. If you have any questions about real estate, call him at (415) 447-6231.