The biggest consumer item on any shopping list is the place where we live. Homes are not only huge investments, but they also reflect our preferences, finances and status.
And yet while homes are crucially important, they get less attention than other consumer goods. You can instantly get a Carfax report for virtually any vehicle, consumer reviews grade every refrigerator, and endless reports describe diner experiences in tens of thousands of restaurants.
But when it comes to homes the situation is different: You can get such things as termite inspections, appraisals and home inspections but such traditional checks and reports lack context, they do not get to the information that buyers increasingly want in a changing world.
After all, what’s the value of a home with a great roof if the neighborhood has poor schools, pollution and a tendency to flood?
Government reports and academic studies are filled with information any homebuyer can look up, but such data is often hard to find and difficult to understand. Clarity is not the hallmark of much research, and the practical, understandable and actionable information that buyers want is often hard to find if not impossible.
The type of information we’re talking about will help purchasers make better-informed decisions regarding where to buy, decisions which might allow them to save tens of thousands of dollars by finding homes with lower insurance costs, less exposure to natural disasters and a greater potential for appreciation. Moreover, such data offers important benefits that buyers, sellers and real estate brokers want.
New tool for brokers
But what about real estate brokers? Will they want buyers to have more property information?
You bet. Many brokers and sellers will soon automatically provide independent pre-diligence reports when a home is listed, at open houses and with MLS listings. It will be a way to add credibility from an independent third party to property presentations and marketing programs.
Savvy brokers will use pre-diligence reports because they understand the value it brings. The information is objective and beyond their control.
It can provide a competitive advantage, especially when other brokers do not offer such reports. Successful brokers know all about the famous clothing retailer, Sy Syms.
Syms said, “An educated consumer is our best customer.” He meant that when consumers are empowered with independent information they’re better able to make decisions in their best interests.
If one clothing store freely gives out such information while others don’t, then where do consumers shop? Who are they most likely to trust? The same principle applies to real estate brokers and the homes they show.
Lifestyle home searches
Home searches often really translate into lifestyle questions, not how much income you have but how you prefer to spend it. For instance, would you rather live in a place with 6,500 people per square mile or 2,500? How about a big city with 30,000 people per square mile?
Or, what about this: Would you pay a premium to live in an area with top-flight school districts? What if the premium in one state is a lot lower than in another?
Environmental changes are real and the potential for damage to homes and property values can be measured. Data from RealtyTrac show that 35.8 million homes and condos — properties worth $6.6 trillion — are located in counties with a high degree of exposure to natural disasters.
Today’s real estate buzzwords — “pre-diligence” and “hyper-local” — are really new terms for an old idea: The more you know about a property and a neighborhood, the stronger your ability to negotiate a good deal.
Now, with pre-diligence, important information and data are immediately available, independent knowledge that can have substantial value for all buyers.
RealtyTrac contributor Peter G. Miller is a syndicated newspaper columnist with OurBroker.com.