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A study conducted by the National Association of Realtors (NAR) showed that almost four out of every ten purchasers use the World Wide Web to look for houses.
The study, called the “2000 Profile of Home Buyers and Sellers,” concluded that 37% of all purchasers of homes use the World Wide Web to research. This rate is eighteen times higher than it was only four years ago.
The president of the NAR, Dennis Cronk, says that the increased availability and use of the internet has made home buyers better informed and gives them more opportunities. He adds that the internet is especially useful as trends have lead to lower inventories.
The study also found a direct correlation between the number of home purchasers who use the internet and the number of purchasers who use real estate agents. 87% of those who use the internet to shop used realtors or brokers, while 76% of non-internet using shoppers used real estate agents or brokers.
Even though early predictions stated that the increased use of the internet would decrease the number of home shoppers who use agents, this has not proved to be the case. In 1999, only 16% of home purchases were completed without the use of an agent on the part of the seller. This is actually a decrease from 1997 when the rate was 18%. In earlier years, when the market was excellent for buyers, up to 20% of sellers would try to sell their homes on their own. Also, economic factors still favor using an agent. The median purchasing price for a house that was sold by an agent was almost $130,000 while the median price for sales without an agent was $113,000.
Cronk says that increased use of technology has provided another way to sell homes; it hasn’t negated the need for the old system. He notes that however home buyers shop for houses, it is a major decision and buyers value the opinion of a professional to help research and negotiate.
The 2000 Profile of Home Buyers and Sellers also found that home buyers that use the internet tend to buy homes at a higher price. It found that the median purchasing price of a buyer who used the internet was $138,000 in 1999. The median price for buyers who didn’t use the internet was $120,000. The study also found that home shoppers who use the internet usually have annual incomes that are $15,000 higher.
Though shoppers look for houses in many different ways, roughly half found the home they end up purchasing through an agent. Of the remaining 50%; almost 10% found their home by word of mouth; 15% by seeing signs in yards; and 8% by classified ads in a newspaper. Only 4% of shoppers found the home they actually buy on the internet. The remainder found their homes through nine various other sources.
Cronk says that the numbers show that while shoppers like to explore many different options when buying a home, in the end they generally rely on agents’ resources and expertise. He says that the internet is allowing people to explore more options and make better informed decisions when it comes time to get serious about buying a home and contacting a real estate agent.
The study also found that it is important that agents are active on the internet. Shoppers who do use the internet and are familiar with email and web shopping want agents who can keep up with them. 75% of those surveyed said it was “somewhat important” for their agent to be familiar with technology.
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