That e-Pro designation, and the size, complexity and age of this Web site, should tell you that I take the Internet seriously.
But for what it’s worth, I’ve come to the conclusion that the ‘net is a mixed blessing for the real estate consumer. No doubt the net is empowering, bringing buyers thousands of listings that, not long ago, only agents could access. That’s all good. If agents were only gatekeepers of inventory information, we’d deserve to go the way of the vacuum tube.
And that was the fear (or hope) back in 1998: the ‘net would “disintermediate” agents—take them out of the loop, make them dinosaurs overnight. The ‘net did change the real estate industry but, as you’ve noticed, it didn’t make it go away. The agent is still an essential part of the transaction. Sooner or later, most sellers and virtually all buyers realize that they need professional guidance. The ‘net can’t answer every question, address every concern and explain every key nuance of an extremely nuanced process. The ‘net can’t keep the parties focused and the transaction on track. Real estate is far too complex for that, and getting more so with each new court decision and each new piece of legislation.
But the apparent benefit of the ‘net, that it lets buyers into the market without making them interact with an agent, quickly becomes its main drawback. You’d expect an agent to say that, but I didn’t always think this. Once I too looked forward to a brave new world of self-directed buyers who did their own legwork, involving an agent only when ready to buy. Everyone would benefit from the new efficiencies the Internet brought us. Clients could set their own tempo. Agents, relieved of the grunt work of real estate, could focus on delivering a higher level of service. This changes everything!
Well, not quite. Yes, the ‘net does let buyers keep a safe distance from the real estate industry, but that’s not good for serious buyers. Real estate is like nothing they’ve ever done. Its complexities can’t be learned by surfing the listings sites or hitting every open house. That’s like trying to learn tennis over the Internet. No, it’s like trying to learn tennis over the ‘net so that you can play in a tournament where the stakes are your quality of life and hundreds of thousands of dollars. There is simply no substitute for taking regular “lessons” from a knowledgeable, trustworthy “pro”. You need to go out with an agent, regularly.
Right, just what you want to do.
So what can an agent teach you through continuous, real-time feedback? Think about how long it’s taken you to master the intricacies of your own trade or profession, and how much you could teach someone who’s just getting into it. There’s more to being a real estate professional than driving a late-model luxury car, although the industry does a poor job of telling people that.
But by far the biggest problem is that Internet-empowered buyers tend to involve agents only at the last minute, when the process can be overwhelming and even futile.
It’s the agent-as-(un)necessary-evil mentality. Buyers think, we’re just starting. We want to set the pace and keep control. That works until the magic day they fall in love with a house. It’s cute and priced to blast buyers like them right off the fence. The open house is packed and the listing agent says there’s already serious interest. Offers tomorrow at 6:00 PM.
Okay. Our buyers quickly call an agent whose card they’ve kept just for this day and steam down to his or her office, only to discover that there’s more to the buying process than they ever imagined—much, much more.
For one thing, no one will take their offer seriously because they’re not pre-approved for a loan. They talked to a lender but never followed through. After all, they were just starting and there was no hurry. Or maybe they were pre-approved but that was six months ago and interest rates have changed.
Next they make the Long March through the disclosure package, read all the reports and begin to worry. The house that seemed so dazzling only a few hours ago now looks like a minefield of hidden costs. Which repairs can they put off? Which should they do right away? Which contractors should they use? What will it cost? Do they have the money? Why doesn’t the general inspection include costs? Why does it keep referring them to other inspectors? Does the inspector see big problems or is he just covering his rear end?
The agent shows them a Comparative Market Analysis and starts discussing the value of the house. Here are comparable homes that sold recently and how much they sold for. Did you see them? Do you know how they compare to this house? How much do you want to offer? How much should you offer? How much can you offer?
Then there’s the big pile of contract documents to review and sign. The agent talks about strategy and inspections. You may be competing with other buyers, so you’ll want to make your offer as good as possible. Here’s one way to do it, and here’s another. This is the risk, this is the reward. What balance between the two do you want to strike? Okay, the buyers say, we’ll waive this right but not that one. We’ll pay for this repair but we want the seller to pay for that one. On and on, paragraph after paragraph.
Oh, and two hours ago little Buyer Jr. decided that real estate is a bore, and Mom and Dad have been playing tag-team babysitter ever since.
Along about the second quarter of overtime it begins to dawn on our buyers: they haven’t done enough, heard enough or seen enough to feel comfortable enough about a decision this big.
A week later their lender tells them they couldn’t have afforded the house anyway. All these months they’ve been looking at homes out of their price range.
Home buying will always be stressful—the money and emotion involved will see to that—and every house is different. But there’s much about the home-buying process that’s consistent from house to house. Regular, face-to-face interaction between buyer and agent de-mystifies that process, casually and with less stress. Not only does this prepare buyers for the pressure cooker of making an offer. It also develops a good working relationship with an agent, or uncovers problems with the relationship before it’s too late.
The Internet will get you to the game but it won’t teach you how to play.
Interested in buying a home? Please contact me at firstname.lastname@example.org.
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copyright © John Fyten 2004-2014