By Jake Breen
It’s become a bit of a battle. You want a new home, you surf the web well in advance of actually moving (consumer surveys report you start 17 months in advance of buying) and you believe that you are becoming a real estate expert if you search long enough and hard enough. After all, can’t you find everything you need to know about a house, the neighborhood, the community by “googling”? Well, not exactly. Let’s examine why:
- Where do you shop online for homes?
A recent survey by the National Association of REALTORS® (NAR) reports 57% of all home buyers in 2014 started their search online (less than you may think and yes, it was higher for first-time home buyers). Most of these shoppers start by googling the area they want to buy and surfing national home search sites. Virtually every consumer I have worked with in my 12 year career is under the false assumption that these sites show different homes for sale. Also, many buyers assume that the homes displayed for sale are uploaded to those sites by someone who is manually inputting the information about each property. This is not how it works.
Every single one of these sites only shows the data they are purchasing to display from the source. The source of the home for sale is the listing agent and brokerage who signed the listing agreement with the seller. Furthermore, these sites are only updated when this feed they are paying for updates the information from the original source they bought it from.Why does this matter to Mr. or Ms. Home Buyer? Let’s put it in simple terms: These consumer sites all over the web are fighting to display the same information so that they can capture the consumers’ information and sell it in one way, shape or form as a lead to agents, loan officers and other industry professionals. The information isn’t fresh and it is infrequently updated.
- What’s the best source of data then?
According to a 2014 NAR report, there are roughly 115 million total households (homes) in the U.S. and last year 4,940,000 of those homes sold. Of all homes sold, 92% involved a real estate agent and 8% were for sale by owner. That means 4,544,800 homes sold in 2014 that involved a real estate agent and that agent was the source of the information for the house online. Specifically that real estate agent listed the home for sale on their local MLS (multiple listing service) system, which made it populate online search sites. In Utah (my area of expertise) that MLS system is known as Utahrealestate.com. It is the site where all agents are required to upload their listings within three days of signing the contract with the seller. The site updates in REAL TIME so if the agent contracts the house it will be removed from the site within minutes, whereas often times popular search sites, because they are so infrequently updated, will continue to report the home for sale weeks after the contract is signed.
Why does this really matter to a home buyer? Yes, everything is online these days but the age old adage still applies: Don’t believe everything that you read. Sites are often out of date, information can be incorrect and that can result in time wasted and money lost.
- If I do locate great data online, do I still need to use a real estate agent?
As of Sept 30, 2015 there were 1,160,392 licensed real estate agents in the United States. When buying a home (buyer representation only) 87% of all consumers in 2014 used a real estate agent and that percentage has steadily increased since 2001. This information begs the question: Why are more buyers nationally using real estate agents to purchase a home despite how easily property information can be found online? Because it’s a jungle out there and in some ways more information has led to wrong information and confusion. I could write a book on the benefits of using an agent to sift through all the online data but suffice to say the stats don’t lie and buyers have found they need an advocate, an expert, a negotiator and someone who knows the real story and cares about their own story, too. So, in 2016 you will probably still search for homes online but when it comes to real questions about real property, ask your local real estate expert; they will know what’s really going on.
JAKE BREEN, MBA, is a managing broker with Berkshire Hathaway HomeServices Utah Properties in Cottonwood Heights, UT. Visit his website, UtahCribs.com