Lane Hornung has been watching the statistics regarding home buyers using the Internet for a decade.
“I remember when the Internet didn’t even register,” said Hornung, president and co-founder of 8z Real Estate.
Now, Web-based searching for a home is on everyone’s radar screen – 89 percent of buyers use the Internet, according to the National Association of Realtors.
But there has been a largely unnoticed trend.
For the first time, Hornung notes, more people found their home through the Internet than from a real estate agent, according to the most recent NAR report.
Sure, it is close.
Internet No. 1
When the NAR asked buyers where they first learned about the home that they purchased, the No. 1 answer was the Internet, at 38 percent. Real estate agents came in at No. 2, at 37 percent, the Realtor-trade group said last November in its 2010 Profile of Home Buyers and Sellers report.
In 2001, real estate agents were the No. 1 method of finding a home by a wide margin. Some 48 percent of the buyers found the homes they eventually bought from a real estate agent, and only 8 percent from the Internet, a distant number two. In 2009, the Internet and real estate agents tied for first place, at 36 percent each. In 2008, the No. 1 source was the real estate agent at 34 percent, compared with 32 percent for the Internet.
Consumers still need real estate brokers
Despite the growing popularity of Web-surfing to find a home, Hornung contends the real estate agent is more important than ever.
“There was this common misperception that within five or 10 years, the Internet would replace the real estate agent,” Hornung said.
Instead, the Internet has proved to be a great source for home buyers, but they have so much “noise” – that is, information overload – that the real estate agent is needed more than ever to guide them through mountains of possibilities.
Indeed, Google “Denver home sales” or “Denver real estate,” and you are likely to end up with results for 3.7 to 39 million possibilities at any given time.
“The Internet is a great complement to a knowledgeable real estate agent,” Hornung said. “The under-stated story out there is what a great time it is to be a consumer. There truly is an unprecedented amount of information available. I would say that the Web has not only made for better consumers, but I truly believe it has made real estate agents better as well. The baseline level of market knowledge of the Internet-empowered consumer has pushed real estate agents to raise the bar on their own market knowledge. Especially now that the bubble-market is over, consumers want to hear the advice of a knowledgeable real estate professional.”
He noted that buyers, after doing their “homework” on the Internet, “look to an informed real estate agent with knowledge and experience to interpret the data and provide context to the data. It’s a great combination for the consumer. Online research makes the consumer very well informed. I believe consumers today are the most informed ever. But there are some things you cannot learn online, and that is where the real estate agent comes in.”
For example, a real estate agent may tell a prospective buyer that a house on a certain street isn’t as great of a deal as it appears, because from 5 p.m. until 7 p.m. each weekday, headlights will be shining through her windows.
“The Internet is a snapshot of that moment in time,” Hornung said. “A real estate agent who has worked in that market and has sold hundreds of homes in that area can put the house you are considering into a historical context.”
Some agents are so familiar with an area that they farm, if you throw out an address, they can give you specifics about the home such as it needs a kitchen makeover, he said. You’ll never find anything as specific as that on the Web.
WebMD didn’t end need for doctors
“I don’t want to make to dramatic of an analogy, but it is not unlike what you are seeing in the medical field,” Hornung said. “You can go online to WebMD or other sites, and you have really great resources, but you’re still going to want to talk to an expert. I understand that buying a home is not a life-and-death situation. But let’s say you think you have a hernia. You find all of the symptoms online. You’re then going to want to find a doctor who has done hundreds, if not thousands, of hernia repairs.”
And with all of the information available, he said a prospective buyer can save time and make their Web-searching more efficient, by focusing on sites run by reputable real estate companies, real estate agents, Realtor associations or MLSs.
“These Websites have agreements to market the vast majority of the MLS listings and they are required to keep their listing data accurate and up-to-date,” Hornung said.
Lane Hornung is president and co-founder of 8z Real Estate, a sponsor of InsideRealEstateNews. Every month he addresses real estate issues on this blog. Hornung also is co-founder of www.COhomefinder.com.