Real estate brokers and agents didn’t exactly welcome the Internet when it burst onto the scene a decade ago. But since then, they’ve turned what appeared to be a threat into an opportunity. A round of applause is in order.
Real estate still harbors pockets of downright stubborn resistance to both the Internet in particular and technology in general. That’s not surprising since 1 million Realtors and counting are bound to mirror the characteristics of the general population, including the extent to which people embrace or reject technology. Yet taken as a whole, the paradigm shift in real estate’s thinking about technology has been both colossal and commendable.
The shift occurred largely because home buyers and sellers used the power of consumer demand to turn the Internet into a gigantic and very useful online housing store. More than half of all home buyers now use the Internet to start their home search, according to a survey the California Association of Realtors released at the end of June.
The survey, “2004 Internet Versus Traditional Buyer Study,” found Internet buyers spent more than twice as much time as traditional buyers gathering information before they contacted a Realtor. And once they had selected a Realtor, Internet buyers spent less time previewing homes with the agent than traditional buyers spent.
Fifty-six percent of buyers in C.A.R.’s recent study used the Internet in their home search. Stated in reverse, only 44 percent of the buyers were so-called “traditional” or “non-Internet” buyers. That means real estate sales associates who aren’t comfortable with the Internet could be shut out of more than half the market.
What’s worse for those shut-out salespeople is that Internet buyers appear to be more time-efficient than traditional buyers. Two survey findings support that conclusion: One, Internet buyers previewed a steadily decreased number of homes on average during the past four years while the average number of homes traditional buyers previewed changed very little. And two, the typical Internet buyer visited fewer homes with the agent than the typical traditional buyer. The difference was measurable and significant: Internet buyers visited an average of 6.1 homes while traditional buyers visited an average of 15.4 homes. How much time did agents spend to show non-Internet buyers an additional 9.3 homes each on average?
These findings also suggest the listing agent’s presentation of for-sale homes on the Internet is of tremendous importance. Some agents have balked at giving away the goods online before the customer is identified. That reaction is only natural, but it’s also out of touch with reality. Buyers are online. That means agents and for-sale houses need to be online too.
The boom in Internet home buying also suggests that investments in online technology, training, prospecting and advertising merit consideration, particularly if they connect salespeople to Internet-savvy home buyers. The cost-benefit analysis shouldn’t be thrown out the window, but neither should the opportunity be overlooked.
A final point: Internet buyers earned more money than traditional buyers did, according to C.A.R.’s survey. The median income of an Internet buyer in 2004 was $168,540, while that of a traditional buyer was $142,470. The difference amounts to $2,172 per month, enough for the Internet buyer to purchase a significantly more costly house, all else being equal. Higher prices typically mean fatter commission checks, and that’s money in the bank for the Internet-savvy realty broker and salesperson.
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