An E-Revolution in Home Buying
And now, buying a home - the biggest transaction most of us will ever negotiate - is happening online.
The move first began several years ago with the emergence of real estate referral sites. Most of these sites, which still exist, were much like dating services - third parties trying to match buyers or sellers with Realtors. Then there are the traditional brick-and-mortar brokerages that have established their own national and local Web sites primarily to display their own company's limited listings.
And now the next generation is surfacing: online real estate brokers that use technology to streamline and improve the entire process. Only a handful of start-ups make up this new class, and they offer home buyers the ability to control the process online from start to finish.
The technology revolution in real estate began with the widespread availability of computerized multiple listing systems for Realtors in the 1980s. This was a major step toward improving productivity and service, but it wasn't until the advent of the Web that this information became available to consumers, even in limited form.
There are literally thousands of Web sites today focusing on the real estate industry. The vast majority of these fall into the information access category. Some of the early sites displayed minimal listing information along with the listing Realtor, while others offered ways for sellers to request listing proposals. For instance, the Houston Association of Realtors (HAR.com) and the National Association of Realtors (realtor.com) provide access to information on home listings as well as ways of finding and contacting realtors.
But technological advancements during the past decade, along with the increased acceptance of Internet commerce, have produced higher expectations from consumers. The new real estate Web sites are not simply lists of properties but tools for facilitating the real estate transaction.
In general, online real estate brokerages have not abandoned the role of the Realtor; they are looking to enhance it through technology. These brokerages allow the consumer to control specific processes and to use the expertise of a Realtor when needed.
By being able to review data on all prospective homes, home buyers think they are making a more informed decision. Clients can use faster, more efficient processes to query the multiple listing systems database, research neighborhoods and narrow their search. Panoramic virtual tours offer efficient ways of checking out a house from your computer; e-mail scheduling of showing appointments eliminates phone tag; online mortgage applications and approvals cut significant time out of the equation.
Through the implementation of software applications such as SMART - System for Managing and Automating Real Estate Transactions - consumers can:
• Develop a personal portfolio to store and track information about potential homes fitting their specific search criteria.
• Be notified when any of the prospective homes in their portfolio changes (price or status).
• Stay up-to-date with new listing alerts via e-mail announcing the day's new listings in their area of interest.
• Link directly to service providers such as E-Loan, an online mortgage lender, as well as Stewart Title Co.
Because this kind of technology also reduces the paper shuffling and administrative work for real estate professionals, it affects the economic equation in real estate transactions. For consumers who embrace modern technology to conduct their real estate business, this can translate into significant cost savings. Many online brokers pass the cost savings on to consumers in a variety of ways, such as offering reduced commission rates or a cash rebate at closing.
So what's the bottom line? The inefficient process of finding and buying a home is being addressed head-on. As is the case in most e-commerce sectors, the consumer who embraces the new way - the Internet way - is rewarded with a faster, better overall home-buying experience at a lower cost.