Will Real Estate Agents Be Left Behind?

RISMEDIA, The Real Estate Revolution caused by the shifting real estate market, low interest rates (currently 6.6%) and the Internet just might drive traditional real estate agents to extinction. According to Dave Lyons, vice president of Realty Impact Marketing, the key to staying in the game is to “go digital.” When agents advertise homes with unique Web sites, 24/7 online streaming video and DVD mailers, Internet-savvy buyers get the jump on hot properties.

Instead of roaming through open houses to see what interests them, more and more people are “screening” homes through digital video to narrow their choices. A well-produced video of a home’s interior eliminates a lot of the foot traffic, since most people are far too busy to spend their weekends combing through properties that aren’t even close to what they want. Buyers can preview their next home without ever setting foot outside their current one and without bothering the seller.

Of course, interior video recording isn’t a new idea, but clunky virtual tours are being upstaged by slickly produced movies. Lyons reports that “thanks to advances in digital video, the production values are not unlike those of a broadcast-quality commercial.”

Lyons, a Navy veteran, partnered in 2005 with Tri Cole, founder of Realty Impact Marketing, to establish the company’s San Diego division, offering high-tech solutions to area real estate professionals. Besides serving San Diego and Orange County, they plan to expand to Los Angeles and Santa Barbara in the wake of a banner year for the home office in San Jose.

RIM offers DVD production and sophisticated marketing for real estate agents who want to keep pace with technology. Lyons notes that agents can broaden their clientele, outside of their walk-by traffic or traditional Web site, by offering a fast turnaround on producing the video followed by a relatively quick sale. Potential buyers get in the “catbird seat of new properties” via the Internet or on a DVD direct-mail piece, which until now proved too costly to produce.

“The quality of the video must be completely in sync with that of the property to capture the attention and spark the interest of discriminating buyers,” says Lyons.

Will real estate agents be left behind? Some, but not all. According to recent reports, as many as 437,000 agents are now competing for 680,000 listings statewide because of the real estate gold rush. And the real estate profession is plagued by high turnover, which creates a workforce made up mostly of beginners. Many Realtors are part-time or “recreational” salespeople, who either retired from some other career or work in real estate seasonally. This level of commitment makes it impossible for them to keep up with the radical changes in law, business practices and marketing—including rapid advances in technology.

Lyons strongly believes that “real estate agents need to accommodate the tech-savvy buyers and sellers and that agents who understand this use of Web sites with video content to showcase homes.” Videos on these sites describe properties in detail, create interest and provide an easy way to weed out those homes that don’t fit a buyer’s criteria.” Lyons continues, “Since many buyers are out of the area or even across the globe, showcasing the community where the property is located definitely helps the sale.”

“The word to describe the future market is ‘adjustment,’” he says. “…Adjust the price of homes; adjust the sellers’ thinking about what it takes to sell their homes; and adjust the purchase process to cater to technology-minded, self-sufficient buyers.”

Because the industry is changing so rapidly, many real estate agents will become extinct unless they undergo a serious attitude adjustment. “Agents need to recognize that more and more people are turning to the Internet to buy homes,” Lyons says. “Realtors who adjust their marketing accordingly will not only survive, but prosper.”

[According to a study by the National Association of Realtors®, 72% of home buyers use the Internet to search for listings and services, and more than 20% of buyers reported that they first learned online about the home they ultimately purchased. These statistics will only increase as the average home buyer grows younger and more Internet-savvy.]

With every passing day, then, “cookie-cutter” Web sites will prove less effective for serious real estate professionals—especially when the Internet reaches a global audience of more than 200 million people every day, with that number growing monthly.

A study by the California Association of Realtors® (CAR) revealed that buyers who find their home on the Internet are wealthier and purchase more expensive homes than non- Internet buyers. On average, Internet home buyers spend $452,000 on a home while traditional buyers spend $310,000.

The reality is that even if it’s 2 a.m. local time, potential buyers in another state or another country might visit an agent’s Web site looking for that perfect home. Clearly, providing online 24/7 video open houses addresses this need.

The CAR study also found that Internet home buyers make their purchases nearly twice as fast as buyers who don’t surf the Web. Buyers check out prospective homes online, schedule on-site inspections and make an offer to buy before most offline buyers are even aware the properties are listed. Ironically, researchers also discovered that Internet home buyers are more likely than non-Internet buyers to use a real estate agent.

Another survey revealed that, as a rule, Web-surfing home buyers express greater satisfaction with their real estate agents after the transaction, which translates into repeat clients and referrals. But a key challenge of Internet house buying and that a Web site typically has only about 10 seconds to capture the attention of visitors and then draw them into its contents.

“That’s where RIM-SD comes into the picture,” says Lyons. “We specialize in attention-grabbing, state-of-the-art Web sites specifically designed to help agents take their business to the next level.”

The bottom line, he concludes, is that “Web visitors want to get the information they’re looking for quickly, be educated in aspects of the real estate market with which they’re unfamiliar and be entertained—all at the same time. This is exactly what we do, giving savvy agents a major competitive edge by helping them 'go digital'.”

Daily Real Estate News | December 14, 2006

More People Shop for Housing Online

Nearly 40 percent of Americans with Internet access go online when they are seeking a place to rent or buy, according to a study by the Pew Internet and American Life Project.

Overall, more than 27 percent of all adults in the United States have looked online for information about housing, more than double the 13 percent of Americans who had done so in 2000.

About 51 percent of the youngest adult American Internet users, 18 to 29 years old, have searched online for housing information, compared with 43 percent of 30- to 49-year-old Internet users, 27 percent of 50- to 64-year olds; and 15 percent of Internet users age 65 and older.

Money is also a factor. 45 percent of Internet users whose household income is $75,000 or more have sought a home online.

Pew previously found that about half of Internet users have taken virtual tours, including checking out a home available for rent or for sale, nearly one-third have used an online classified service to search for housing.

The study supports data from the NATIONAL ASSOCIATION OF REALTORS® that shows 77 percent of home buyers had used the Internet to help in their home search in 2005.

Source: Associated Press, Anick Jesdanun (12/13/06)