The share of home buyers who said the Web was integral to their purchase process continues to grow, according to an annual survey of home buyers by the California Association of Realtors trade group. Meanwhile, the home-search process lengthened compared to the 2007 survey.
The association’s "Survey of California Home Buyers" reveals that 78 percent of buyers used the Internet "as an important part of (their) home buying and selection process," compared to 72 percent in 2007.
Buyers who stated that the Internet was an important part of the buying process spent an average 8.3 weeks searching for a home with their agent, up from 5.2 weeks in 2007 and 2.2 weeks in 2006 — reflecting the slowing sales environment of the past two years.
"Traditional" buyers who said the Internet was not an important part of the buying and selection process took even longer — 10.3 weeks searching for a home with their agent compared to eight weeks in 2007.
Also, the survey found that traditional buyers saw almost twice as many homes with their agent (23.3 homes) as Internet buyers (12.7 homes).
“Due to the high inventory of homes on the market, and uncertainty about the direction of home prices, buyers are more cautious and are moving at a slower pace during the home buying process than in previous years,” said William E. Brown, CAR president, in a statement.
The sample of buyers in the survey included 1,249 home buyers who used the Internet and 351 who had not to purchase homes during the last half of 2007.
The survey found that affordability for first-time buyers has improved with home-price declines and relatively low mortgage interest rates.
"However, problems in the area of real estate finance continue to limit access to capital on the part of all buyers, including first-timers," and has shrunk the pool of first-time buyers. Also, because of the credit crunch, "there is no guarantee that the loan will actually be funded," according to the report.
Participants expressed a need "to better understand the direction of the market" and for escrow to close on time, citing concerns about "market conditions" and "agent responsiveness," the report states.
Specifically, participants asked for better negotiating and faster response times from their agents. "Both assessments reflect the uncertainty of the market in recent months and frustration with that uncertainty," the report concludes from those survey findings.
The share of first-time buyers in the "Internet" group participating in the survey dropped from 31 percent in the 2007 survey to 22 percent in the 2008 survey and is down from 41 percent in 2006.
"With lenders tightening their underwriting standards and requiring a larger down payment from borrowers, many first-time buyers who had already been facing affordability constraint due to high home prices in California found it insurmountable to qualify for a home loan."
About 77 percent of first-time buyers reported that they were motivated to buy by falling home prices, compared to 64 percent of repeat buyers.
Other motivators included: low mortgage interest rates enabled the buyer to move to a better location, the likelihood that sales will increase, mortgage rates enabled the buyer to move to a bigger home, and the desire to move to a more affordable area, in that order.
Satisfaction with the home-buyer process dropped in ever category in 2008 compared to the prior year — the average rating among the nine categories was 3.4 in the latest survey (five is "most satisfied" and one is "most dissatisfied). In last year’s survey, the average rating was 4.1.
Overall satisfaction with agent averaged 3.3 in the 2008 survey compared to 4.1 in the 2007 survey.
About 80 percent of those who were not satisfied said the agent "did not negotiate aggressively on their behalf," according to the survey report.
And the report suggests, "Although home buyers did not mention it, failure to close escrow on time probably contributed to the level of dissatisfaction buyers had with their agent," as 57 percent of Internet buyers participating in the 2008 survey reported that they did not close escrows on time.
About 31 percent of the Internet group in the survey expected an instant response from their agent, up from 22 percent in 2007. And 96 percent of Internet buyers expected a response within four hours or less, according to the latest survey. That compares to 94 percent in the 2007 survey.
Also, about 84 percent of participants said they considered the agent’s response time to be either a "very important" or "extremely important" factor in their decision-making process, the survey report states.
About 71 percent of the Internet buyers in the survey said they would use the same agent again, down from 92 percent in 2007.
Among the "traditional" buyers, 27 percent reported they would use the same agent again, down from 47 percent in 2007 and 79 percent in 2005.
Participants who used the Internet in the home-buying process reported that the first Web site they visited was Google (40 percent), followed by Realtor.com (28 percent), Yahoo Real Estate (8 percent), and Zillow (5 percent). Four percent reported that they first visited the Web site "of a home that I was interested in," while 3 percent reported that Craigslist.org was the first site they visited and 13 percent were unsure.
An individual real estate agent’s Web site was cited as the most useful Web site during the home-buying process (33 percent), the survey revealed, followed by Realtor.com (23 percent), an "Internet listing of a home that I was interested in" (22 percent), Zillow (11 percent), real estate company Web sites (8 percent), and Yahoo Real Estate (4 percent).
And among the most-visited Web sites: Realtor.com, a real estate agent’s Web site, Web sites that included the specific home listings that buyers were interested in, real estate brokerage company Web sites, Zillow, craigslist and Yahoo Real Estate, in that order.
Multiple pictures and a slide show were named by survey participants as "extremely important" Web site features by buyers (61 percent), followed by maps and directions, agent contact options, virtual tours and neighborhood profiles.
About 88 percent of survey participants hired an agent to assist them in the home-sale transaction. About 90 percent of buyers in the Internet group found their real estate agent using the Internet, while 9 percent found their agent through a for-sale sign and 1 percent through an agent’s marketing materials.
Meanwhile, about 32 percent in the traditional buyers’ group reported that they had a previous transaction with the real estate agent, 28 percent found the agent through marketing materials, 27 percent through a for-sale sign and 14 percent through a referral, according to the survey.
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