Where Do Real Home Buyers Come From?

Friday, January 25, 2008

As CEO of CleanOffer.com I need to know what’s going on out there in the big, bad world of online real estate.  In addition to my CleanOffer duties, I remain an active real estate broker selling homes locally.  This keeps me current with the market and helps me better understand what works about the CleanOffer product and what needs improvement.  Plus, closing an escrow does pay nicely.

Being immersed in both the online and off line real estate game gives me an interesting perspective and keeps me asking questions like:  “How has the web changed the agent-client relationship and where do real home buyers (the ones who actually buy homes) come from today?” (How Do Consumers Choose an Agent?)

We all know that buyers are increasingly searching for homes online.  In fact, the National Association of Realtors now says that over 80% of them use the Internet as part of their home search.  It seems logical then that with access to all this information, buyers would be less likely to use a real estate agent. 

In fact it is just the opposite. Over the past 10 years, as buyers radically increased their use of the Internet in their home search, they also increased their use of real estate agents to complete the purchase transaction.  Why?  While empowering, all this online information only increases a buyer’s need to have a local agent to help interpret it.  Homes are not commodities.

So if increasing Internet use amplifies a buyer’s need for agent representation, then the next logical question is:  “Are real buyers finding their agent online”?  As pointed out in Buyers, Sellers: Realty Agents Rule, the answer is NO. In fact only 5% of the buyers who closed escrow on a home last year found their agent online!

Real estate is a relationship game. Buying a home is simply too significant of a transaction for most people to be comfortable working with an agent they don’t know or weren’t referred to by somebody they trust.  When I got Lasik eye surgery several years ago, I did lots of research on the Internet first.  However, the doctor I chose for the procedure came from a personal referral.  Those advertisements for, “Buy one eye and get the second one free” just didn’t feel right to me.  Likewise, most home buyers are not persuaded by the picture of an agent or taglines such as, “Top Producer Who Cares”. 

It’s still who you know.  I guess some things never change.