Internet Buyer
vs. Traditional Home Buyer
By Mike Parker
RISMEDIA, Feb. 8, 2007-If you are one of those many agents
or brokers who don't really believe that the Internet is
"the way" in real estate today, perhaps the following data
compiled and presented by Leslie Appleton-Young, chief
economist and vice president of the California Association
of Realtors® (CAR®) in her analysis of the real estate
market in California for 2006 will get your attention.
If you believe that the Internet is the single most
important factor in your future success, here's your
continuing proof that you are correct. Pages 62-82 of the
Appleton-Young and CAR® (www.car.org) study compare some
distinctions between Internet vs. Traditional buyers and the
findings are powerful.
The charts in the report show the undeniable trends and the
clear preferences consumers have for the Internet approach
to buying a home: since the year 2000, virtually every
preference that used to favor the traditional approach has
been turned upside down and the Internet approach is now
overwhelmingly favored. This report is unequivocal evidence
that if you are not on the Internet bandwagon and if you
can't be found by people searching for homes on the
Internet, you are completely "missing the boat" in the real
estate business.
Here are just a few of the report's findings:
- 92% of Internet buyers found their agent on a Web site;
63% found them through an Internet search engine; 0% of
Internet buyers found their agent through brochures, flyers,
yard signs or mailers to their home (does this tell you to
spend more on Internet marketing and less on print?);
- In 2000, 28% of people said that they used the Internet as
an important part of their home-buying and selection
process. In 2006, 70% said they did;
- 86% of home buyers started using the Internet as part of
their process before they started looking for a specific
home; the other 14% did after they started looking, but
before they contacted a real estate agent; that means that
100% of buyers surveyed started looking at homes first,
agents second. When you combine that finding with the
already existing one that fully 81% of Internet buyers stay
with the first real estate agent they choose to contact, you
can see a powerful case for being able to have consumers
find you, first;
- Internet buyers spent an average of 4.8 weeks doing
research before contacting an agent; traditional buyers only
1.7 weeks. That means an Internet buyer is better prepared
and twice+ as less likely to waste your time;
- Internet buyers bought a home on average after spending
2.2 weeks looking for a home with an agent; traditional
buyers spent an average of 7.1 weeks; how high would your
productivity be if you could spend 2/3 of the time you now
spend previewing with clients and could dedicate it to
selling and marketing, instead?
- Internet buyers previewed an average of 6.7 homes with
their agent (they had already eliminated ones they did not
wish to see), traditional buyers previewed 15.4 homes; an
average of just under nine fewer wasted showings per
customer;
- Only 3% of all Internet connections available at the
primary computer used for the home-buying process were
dial-up: Internet home buyers and searchers are not sticking
with dial-up, just as they are not sticking with traditional
methods;
- The approximate distance between previous residence and
new residence for traditional buyers was 25 miles; for
Internet buyers, it was 242 miles (you can sell anywhere
compared to traditional ways);
- Number of agents an Internet buyer interviewed, on the
median: 1; Traditional buyers? 3. (Why would you want fewer
auditions and more certain retentions?)
- 69% of Internet buyers said response time was extremely
important.83% of those buyers chose email as their favored
communication method with their agent. 0% chose "in person."
(The Internet is the new "office visit.")
- Internet buyers were more satisfied with their agents: 4.3
to 3.3 for traditional buyers, on a scale of five where five
is "surpassed expectations."
- 35% of traditional agents listed "faster response time
from my agent" as the one thing they would change, if they
could, about their experience; Internet buyers? 0%!
Internet buyers were far more satisfied in every important
researched category of satisfaction than traditional buyers
were; when asked the number one reason for satisfaction with
their agent, 91% of Internet buyers said that satisfaction
was because their agent "was always quick to respond."
Traditional buyers? Their number one reason was "worked hard
on my behalf," chosen by 62% of them, leading us to conclude
that traditional buyers did not find their agents "quick to
respond."
An incredible 97% of Internet buyers said they would use the
same agent again. Traditional buyers? 50%. (Twice as likely
to be satisfied and twice as likely to give a referral,
wouldn't you think?)
I'm not an economist, but it seems to me that these data
show clearly that:
- Agents who sell via the Internet do not get as bogged down
in unproductive chauffeuring to preview homes as traditional
agents do;
- Agents who utilize online marketing and have Internet
buyers are more liked, more highly regarded, more likely to
have a repeat sale with the client,
- Agents selling to Internet buyers are likely to work only
2.2 weeks with a buyer before selling a property ( vs. 7.1
weeks traditionally);
- Agents committed to online marketing may be able to expand
their market area to an average 242 mile radius of their
location and remain effective due to online communication;
people find you on the Internet, call you or email you, and
use you to help them find a home in an area they may not
know.
- The money you may spend on brochures, ads, newspaper ads,
and the like should be reconsidered and placed into Internet
marketing.
So, unless you are in a state of denial about the Internet's
importance to real estate transactions, you need to do
several things in your planning for this year, at minimum,
if you want to be on the right side of these statistics.
You need to take most of the money you are spending on
newspaper ads, brochures, glossy marketing pieces, etc., and
invest it in your online marketing. Chances are good that
you cannot possibly wisely spend all those dollars online;
consider those savings as your bonus this year. It will be
tough not seeing your comforting listings in the paper, but
think of all the money you'll be saving! (And as more fuel
for that fire, consider this: Ms. Appleton-Young's data also
show that over 70% of people 65 and older read a daily
newspaper, but only 35% of 24 year olds do. Print is dead to
this generation of home buyers.
You need your own Web site showing your properties and you.
You can get a very good one free. What are you waiting for?
Just having a Web site or a page on your franchise site
won't cut it; you must be able to be found by people
searching for homes in your considerably larger
e-neighborhood. The Internet is a really big place and
chances are that you and your site may be lost in its
hugeness. (Click here to find out if your site can be found
and how to make it found: http://TheBlackwaterCG.onelanding.com.)
You must be permanently committed to "Thinking Internet." I
have heard many agents say, "I don't get that involved with
online marketing; I've been successful the traditional way
for 15 years." I offer those of you saying that now two
things: my sincere congratulations on your past success and
my sincere empathy for the frustration you will suffer as
the curve gets further out in front of you.
The report told us that in 2006, 63% of Internet buyers (who
comprise 70-85% of all buyers today) find their agent on the
Internet. We believe that within the next two years, this
number will approach 90%. While this CAR® study does not
report on every State in the Union, it does report on what
is happening in America's biggest and most influential real
estate market. No matter where you are, these data and
trends are coming at you. You must get on board or you will
be literally run over and left behind. Internet selling is
the way, and within our lifetimes, the statistics will
continue to favor online marketing of real estate in even
greater proportions.
We at Blackwater and our affiliated companies, Compass
Internet Systems and Web Reporter Tool, talk to agents from
Martha's Vineyard to Hawaii, Maine to Florida, Texas to
Canada and everywhere in between on a daily basis. That will
never make us as well-informed as Appleton-Young, but I
believe it gives us a good perspective on trends in this
area, and here's what we think: all over the country, agents
and brokers are showing interest in, adopting, and pouring
their time, effort and money into online marketing on a
scale that was unimagined only two years ago.
That makes us certain that every professional real estate
sales person who wants to stay in this business must adapt
to Darwin's Law on its most brutal terms: Adapt, or die. In
listing and selling terms, that means that you must make the
effort to make the Internet make money for you, for soon,
that is where it all will be made. Go to a search engine,
enter your city, state and the words "Real Estate" or "Homes
for Sale" or any other combination that describes what you
do. Then hit "Search." Are you one of the 10 people listed
on the page? Based on the statistics you just read, if you
are not that means there is a certainty that the searcher
will not buy a home from you, but from one of the people on
that list of ten; after all: "92% found their agent on the
Internet; 63% of them used a search engine." 63% of 92% of
all Internet buyers means that there's a 57% chance you are
out of luck.
After years of evolution in the way we do things, the pace
of that evolution is increasing. This is the time to get
with the wave, this is not the time to miss it. Internet
marketing is the future of real estate sales.It's up to you:
Stay where you're comfortable with traditional buyers, or
move the cheese and learn how to get more Internet buyers.
In the long run, there will be fewer and fewer traditional
buyers for you to pursue, but more and more Internet buyers.
Thanks to Leslie Appleton-Young, chief economist and vice
president of the California Association of Realtors® (lesliea@car.org)
for producing this information and being so cooperative in
permitting its publication.
Mike Parker is a Principal at The Blackwater Consulting
Group and a regular contributor to this newsletter. For a
copy of his newly updated booklet, "15 tips to Make your
Website make Money for you, Version 2.0" or a free review of
your Web site and its ability to be found by Internet
buyers, write realestate@TheBlackwaterCG.com and ask for the
booklet "15 Tips." To contact Mike Parker e-mail mparker@TheBlackwaterCG.com.
RISMedia welcomes your questions and comments. Send your
e-mail to: realestatemagazinefeedback@rismedia.com.
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| 2003 © www.john-chapman.com
Real Estate information contained in this site deemed
reliable but not guaranteed for Las Vegas, Henderson,
Summerlin, Green Valley, North Las Vegas, Boulder City ~ Las
Vegas Real Estate. This covers MLS Las Vegas commercial real
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Summerlin, North Las Vegas and Green Valley NV. John Chapman
is a Realtor for RealEstate.com and serves real estate
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Summerlin, Green Valley, North Las Vegas and Boulder City
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