Homebuyers Shop Internet But Buy Using Agent
With online services, computer companies and technology stocks in general doing their own version of the 1929 stock market crash, real estate agents can take some solace in the knowledge that the Internet isn’t likely to put them out of work anytime soon.
When the Real Estate Center at Texas A&M University surveyed 3,000 homebuyers in Dallas-Fort Worth, Houston, San Antonio and Austin, researchers inquired about the Internet’s role in the home search. Sixty percent of the nearly 400 respondents said an Internet home search was "important." Twenty-eight percent labeled it "very important."
"The Internet was the fourth most popular way to find a home," said Dr. Jack C. Harris, Center research economist who conducted the survey. "The highest percentage of respondents who used the Internet did so to collect information about homes and neighborhoods before making a commitment to an agent or lender. The web was seldom used to find brokers and lenders or to communicate with agents. Some respondents expressed frustration that they could not find more home information on the Internet."
Harris concludes that while consumers are uncomfortable conducting business over the Internet, they are willing to take advantage of the information it offers. While some real estate professionals see the Internet as a threat to their industry, others realize better-informed buyers may actually make the agent’s job easier.
Only 6 percent of respondents said the Internet was "very important" in their search for a lender. Three percent said the web played a "very important" role in finding a real estate broker.
Nearly half (49 percent) of the homebuyers reported finding their new home through a real estate agent. Yard signs were a distant second with 21 percent using them to find a home. Friends and relatives were third with 11 percent, the Internet fourth at 7 percent. Newspaper ads (5 percent) and open houses (3 percent) were even less popular means of finding a new home. None said they found their home as the result of a television ad.
"More than 82 percent of homebuyers responding to our survey used a real estate agent," Harris said. Of these, 64 percent used a buyer’s agent. "Some 75 percent agreed that the agent was a good source of information on houses and the community."
The value of the agents’ advice is more significant. Nearly half those responding to the survey said their agents assisted with mortgage financing, either by providing a referral, through an in-house mortgage officer or through a system in which the loan application was submitted through the brokerage office. Two-thirds said they bought title insurance through an agent referral.
Harris also asked the homebuyers why they moved. Most (42 percent) listed "wanted a larger home" as a major reason for buying. "Tired of renting" was the second most cited reason for the purchase. Other reasons, in order, were relocated from another town; wanted a better neighborhood or better schools; wanted a more convenient location; wanted a smaller or lower-maintenance home; newly married or divorced; and forced to move.
This group of Texas homebuyers spent an average 4.2 months looking at an average of 16.5 houses before buying. Those who used an agent spent 3.7 months searching compared to 5.8 months for those who did not use an agent.
"The search length varied significantly," Harris said, "depending on the reason for moving. Those who searched longest (5.7 months) were looking for a better neighborhood, which may take longer than finding the right house. Divorcees, on the other hand, were much less particular (3.3 months)."
Buyers of condo apartments spent only 2.8 months looking. Harris says that may be attributed to older buyers who had a good idea of what they wanted. Buyers of manufactured homes looked an average of 4.5 months before finding the property they wanted.
Courtesy of Real Estate Center at Texas A&M University, March 2001.
Copyright© 2002, David S. Jones.
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