Nearly four in 10 buyers now use the Internet to shop for their next home, according to a survey by the National Association of Realtors (NAR).
NAR’s “2000 Profile of Home Buyers and Sellers” found that 37 percent of all home buyers use the Internet to search for a home, an 18-fold increase in only four years.
“The Internet is empowering consumers and making them more knowledgeable,” said NAR President Dennis Cronk. “In these times of low inventories in many local markets, many buyers are using the Internet to look for their next home quickly and easily.”
The survey also found that Internet shoppers are more likely to use real estate agents than non-Internet shoppers. Eighty-seven percent of Web home shoppers use a real estate agent or broker, while 76 percent of traditional buyers work with an agent.
Despite the sellers’ market in many locales and predictions that the Internet would diminish the role of agents, the study found that only 16 percent of homes were sold directly by owners in 1999, a slight reduction from 18 percent in 1997. In previous hot markets, as many as 20 percent of owners would try to sell without an agent. Also, the median selling price of a home sold directly by an owner was $113,000, while the median selling price of a home sold by an agent was $129,000.
“Technology has created a new delivery channel for real estate services, not replaced old,” Cronk said. “Whether they are shopping online or on-foot, most consumers still want a professional to interpret the data, negotiate the transaction, provide expert advice and close the sale or purchase of what’s likely to be the largest transaction of their lives.”
The study found that Internet shoppers buy more expensive homes than do traditional buyers. According to the to the survey, the median home price paid by a Web shopper in 1999 was $138,000, while the median price of a home purchased by a non-Internet user was $120,000. Internet shoppers also earn more, $69,900 median income vs. $55,800.
Consumers continue to use a wide variety of sources in searching for a home, but when it comes to where people first learn about the home they actually buy, 49 percent identified real estate agents. In addition, 15 percent said yard signs, eight percent newspaper ads, and another 8 percent from a friend, neighbor, or relative. Ten other sources generated smaller numbers, including the Internet where four percent of buyers first learned about the home they bought.
“What this tells us is that buyers think it’s important to look far and wide to buy a home, but when it comes right down to it, real estate agents, along with their access to multiple listing services, are where the action is,” Cronk said. “In addition, the Internet is allowing buyers to shop and educate themselves at their own pace and at their own convenience, making it easier for people to take the next big step in contacting a real estate agent.”
The survey also found that agents who do not have a Web presence and are not technologically savvy are at a disadvantage in terms of being sought by the 37 percent of shoppers who look for a home on the Internet and are comfortable in using email and technology. Three-quarters of survey respondents said it was somewhat for their real estate agent to be “Internet savvy.”