Although nearly 4 in 10 home buyers now use the Internet as a shopping research tool, few of them actually find the home they will eventually buy online, according to results of a new survey from the National Association of Realtors (NAR).
The survey, “2000 Profile of Home Buyers and Sellers,” says that the number of home buyers who went online to shop for a house rose from 2 percent in 1995 to 37 percent in 1999. “Technology has created a new delivery channel for real estate services, not replaced the old,” said Dennis R. Cronk, president of the Washington-based association.
Most of the home buyers — 89 percent — used the Net to search multiple listings. Others went online to get information about geographic areas.
Agents Still Required
Even with the Internet as a sales tool, the percentage of homes sold by owners, rather than through agents, declined by two points. “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,” Cronk said.
In fact, the survey found Internet shoppers are more likely than offline shoppers to use real estate agents. Results indicated that 87 percent of the survey respondents used the services of real estate agents or brokers to buy their homes, while 76 percent of traditional buyers worked with agents.
The findings are particularly encouraging to the 750,000 real estate agents in the United States who once viewed the Internet as a threat to their livelihood.
Internet Shoppers Spend More
The survey also found that Internet shoppers spend more than traditional buyers do for their homes. The median home price paid by Web shoppers last year was $138,000 (US$), while offline buyers spent about $120,000. The median income for Internet shoppers was $69,900 compared to $55,800 for non-Internet users.
Cronk believes the Internet is “allowing buyers to shop and educate themselves at their own pace at their own convenience, making it easier for people to take the next big step in contacting a real estate agent.”
Cronk added 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 important for their real estate agent to be “Internet-savvy.”
Online Mortgages Sluggish
Meanwhile, as things are looking up for real estate agents, processing mortgages online appears to be an uphill battle for lenders.
So far, consumers appear somewhat uncomfortable with the process, which is often cumbersome and time consuming. Industry analysts say the loan closing process may have to be streamlined and simplified before consumers warm up to the idea, and even then the lack of human contact may hinder its progress.
Still, some of the biggest names in the business, including Microsoft, American Express and Priceline have launched their own mortgage lending ventures, with an eye on the future when using the Internet for financial services may become more routine.