Home buying today versus back in the day…the evolving pursuit of the American Dream
March 1st, 2011 In 1995 Realtor.com went live, posting multiple listing information (MLS) from around the country in one database with public access. Before that, MLS information was proprietary. You couldn’t ‘see’ all the inventory of available homes without an agent / member of the MLS. Would-be buyers would drive neighborhoods looking for ‘for sale’ signs, or circle ads in the Sunday paper at the local coffee shop. But when they wanted more information on a home with that ‘for sale’ sign in front of it, or that ad in the paper, they had to call the phone number on the sign or ad. The real estate agent was the gate keeper.
Today you can see that same for sale sign, but now it may have a bar code-like ‘tag’ on it.
Focus on the tag with the tag reader app on your smart phone and the next thing you know you’re looking at the home online, complete with a virtual tour of all the rooms. 
And if you don’t like what you see, another GPS powered phone app can immediately identify any other listed property in the area. In fact, by 2012, 20% of home searches will be done on a mobile device. The gatekeeper is nowhere in sight.
One reason for the delay in talking with a professional is the temporal factor. That is, from inception of the idea of making a move (‘honey, we’re pregnant’) until the actual move into the larger home (with at least one more bedroom for little Johnny) is statistically a 6-month to 2-year process.
This also explains why the classified ad in the paper or magazine typically doesn’t sell the house (only about 1% of the time). Similarly, the odds are against the ‘sign call’ turning into a purchase (about 12% of the time).
The common denominator that explains the low correspondence between marketing and advertising venues and selling the house is that when buyers are looking at the ad or the sign they tend to be early in that 6-month to 2-year process…they are not ready.
Rather than drive through neighborhoods, today’s buyers surf the web. 90%+ of today’s homebuyers will do at least some of their home searching online.
But the stunning statistic today comes from a large survey by the National Association of Realtors of homebuyers and sellers released 6 months ago. When buyers were asked where they first learned about the home they ended up purchasing, 38% report they saw it first online! This percentage has grown dramatically over the past decade and will likely continue…and why not. Purchasers like being empowered with both information and anonymity.
Ironically, internet savvy buyers find that in spite of and indeed because of literally millions of pages of online content, the local agent cannot be trumped by the web as the ultimate source for information. It is information overload within a minefield of legitimate risk management concerns.
Real estate will never be like buying an e-ticket or a stock online. It is fundamentally a local enterprise, where the idiosyncrasies of neighborhoods and individual properties can only be parsed by the professional who has lived and worked in those neighborhoods; who is familiar with those individual properties; and who knows how to maneuver the minefield of inherent risks. The online listing information won’t tell you if the property backs up to a landfill!
And when it comes to the decision-making process, the real estate agent / local specialist understands the many tradeoffs that every buyer must manage–like vintage versus proximity; square footage versus premium location, etc. There are always tradeoffs. Even the 2 million dollar buyer wants the 3 million dollar home!
Today you can see that same for sale sign, but now it may have a bar code-like ‘tag’ on it.
Focus on the tag with the tag reader app on your smart phone and the next thing you know you’re looking at the home online, complete with a virtual tour of all the rooms. And if you don’t like what you see, another GPS powered phone app can immediately identify any other listed property in the area. In fact, by 2012, 20% of home searches will be done on a mobile device. The gatekeeper is nowhere in sight.Things have changed a bit…but not the fundamentals.
For example, the common denominator in the above scenarios is that buyers typically initiate the home-buying process on their own. They rarely contact a real estate agent as their first step. What was true back in the day is still true today–buyers quite frequently find their agent through what we might call ‘the back door’ of agent inventory. However, now they can do it with a great deal of precision.One reason for the delay in talking with a professional is the temporal factor. That is, from inception of the idea of making a move (‘honey, we’re pregnant’) until the actual move into the larger home (with at least one more bedroom for little Johnny) is statistically a 6-month to 2-year process.
This also explains why the classified ad in the paper or magazine typically doesn’t sell the house (only about 1% of the time). Similarly, the odds are against the ‘sign call’ turning into a purchase (about 12% of the time).
The common denominator that explains the low correspondence between marketing and advertising venues and selling the house is that when buyers are looking at the ad or the sign they tend to be early in that 6-month to 2-year process…they are not ready.
Rather than drive through neighborhoods, today’s buyers surf the web. 90%+ of today’s homebuyers will do at least some of their home searching online.
But the stunning statistic today comes from a large survey by the National Association of Realtors of homebuyers and sellers released 6 months ago. When buyers were asked where they first learned about the home they ended up purchasing, 38% report they saw it first online! This percentage has grown dramatically over the past decade and will likely continue…and why not. Purchasers like being empowered with both information and anonymity.
Has the importance of the role of the REALTOR diminished?
Real estate will never be like buying an e-ticket or a stock online. It is fundamentally a local enterprise, where the idiosyncrasies of neighborhoods and individual properties can only be parsed by the professional who has lived and worked in those neighborhoods; who is familiar with those individual properties; and who knows how to maneuver the minefield of inherent risks. The online listing information won’t tell you if the property backs up to a landfill!
And when it comes to the decision-making process, the real estate agent / local specialist understands the many tradeoffs that every buyer must manage–like vintage versus proximity; square footage versus premium location, etc. There are always tradeoffs. Even the 2 million dollar buyer wants the 3 million dollar home!
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