There’s a new way to buy a home, and it doesn’t involve driving around inspecting properties. It’s the Internet, and experts say the technology is shaking up the real estate industry.
Click onto Realtor.com and you have access to information on 1.3 million homes nationwide. Here in Rhode Island, realty firms are putting up their own pages that allow shoppers to view homes within a given region and get information on the communities in which they’re located — from SAT scores to crime rates.
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And within those firms, individual agents are putting up their own pages in an attempt to draw business to themselves, not just the office.
So fast is the business growing, in fact, that experts predict real estate e-commerce will be a more than $10 billion industry within five years.
“Amazon.com will look pretty small compared to what is going to happen with real estate,” predicted Kevin Hawkins, director of Real Estate Connect, a biannual conference on real estate and technology, the next of which will be held in San Francisco Dec. 3. “Anybody who’s anybody (on the Internet) is jumping into real estate.”
Last July, in fact, Microsoft launched homeadvisor.com, which allows shoppers to locate homes and loans online. Only about 5 percent of sales are being generated now because of the Internet, estimated Jay Readyhough, president of the Rhode Island Association of Realtors. But he also said he’s noticed that consumers are becoming increasingly aware of their possibilities when browsing online.
“It’s playing a very small role in terms of actual leads and sales relative to the whole,” Readyhough said. “But I’ve got to say that in the next three to five years it will be a whole different animal.”
Several factors are driving the change. Shoppers find it convenient. Once they’re online, they can check out new listings, interest rates, even get themselves pre-approved for a mortgage. People looking to relocate to Rhode Island can arrange to have e-mails sent to them when the type of property they want becomes available.
One result of all this is that buyers are saving time because they are able to do much of the background research themselves, experts say.
“We’re getting much more educated buyers,” said John Hodnett, a broker/manager for Lila Delman Real Estate, which has offices in Narragansett and Newport. “And it’s obviously a tremendous benefit to the seller.”
Tremendous in that it increases exposure to the home. With the Internet, anyone in the world may view homes listed through Lila Delman through a series of pictures placed on its Web page. And this technology is evolving to the point in which buyers will be able to take “virtual” tours of each home, Hodnett said.
Realtors who take advantage of the technology now have an opportunity to cash in on the online real estate craze. For example, industry leaders say that any real estate agent who does not have his or her own web page is at a great disadvantage.
“The advantage of having your own web page is that you get calls directly,” said Suzanne Rossi, manager of the firm of Harper, Ramos, & Sheridan, which has offices in Bristol and the East Side of Providence.
Rossi said Harper has had a Web page for four years — long before most firms were online. Last year, Rossi said she sold a home in Bristol to a couple from Germany in only one day. The couple, who had been viewing homes over the Web, knew exactly what they wanted.
“We jumped on the bandwagon relatively fast,” Rossi said. Asked if Internet has significantly increased sales, she said: “Absolutely. We’re having the best year ever, and I attribute a lot of that to our Web page.”
Experts say Internet started to become a factor in the business about two years ago. At first, most pages were simply electronic business cards. Today, companies are making their pages more interactive and providing more free information about homes and communities. But those in the industry also agree that having a Web page alone will not increase sales. The page must be updated daily, and have lots of useful information. Nothing turns people off more than stagnant Web sites, they say.
“It really needs to be part of your business plan,” said Daniel Liese, a broker/associate with RE/MAX Professionals, whose territory includes South County and Southeastern Connecticut.
But he added that most Realtors have yet to embrace the technology. “I think most of them are just not aware of the impact it can generate. If you go across the top selling (RE/MAX) agents across the country, I don’t know of any of them that don’t have their own Web site.”
For example, a 1997 survey of individual Realtors by REALTOR magazine found that only 15.8 percent of individuals had their own site. Indeed, the nationwide movement, though growing, is still in its infancy, Hawkins said. Still, he sees a number of ways the business is going to change. For example, because the price of technology has dropped over the last several years, small brokers are able put up Web sites with features that can compete with larger agencies. High speed connections, real estate news, and calculators that enable buyers to determine their mortgages are examples of service within reach of smaller brokers now, he said.
“The Internet has become a great equalizer,” Hawkins said. “The average Realtor can literally afford to have the kind of marketing presence that a giant (like) RE/MAX or Century 21 might have.”
But with the changes are also some problems, Hawkins said. For one, with agents becoming publishers, the public will become increasingly wary of the information they see online. Security will also be an issue, he said, citing one infamous case in which a credit bureau e-mailed a credit report to the wrong customer.
And cluttering Web sites with high tech frivolities will also be a problem for some, he said.
“Sometimes we forget, as we get enamored by technology, what the point of it is,” he said. “There’s a real temptation to get all the bells and whistles, when most (shoppers) use it (Web pages) for information gathering.”
Still, with all the hype about technology, no one predicts real estate transactions will ever be conducted entirely without people. Buyers, they say, still need to see houses in person, and still like to work with brokers who can help them solve problems along the way.
