From foreheads offered as advertising space to Justin Timberlake’s half-eaten French toast, in today’s digitally driven world, it’s obvious that you can buy just about anything online. And with the rise of sell-it-yourself sites like Craigslist and eBay, sellers can post items day and night, and negotiate the best offer.
So why — especially with our Internet obsession — do most home sellers still use real-estate agents? Good question, given that by-owner websites offer all the same digital tools that agents use. In many cases both home buyers and sellers are finding they can save time and money by going straightfrom the Internet to each other, negotiating a price and sale directly — without an agent.
Use of the Internet in the home-search process has increased to 92 percent (from 90 percent in 2012), according to the 2013 Profile of Home Buyers and Sellers by the National Association of Realtors (NAR). Of the buyers who used the Internet to search for homes, almost 50 percent first found their new home online.
These Internet-savvy buyers are viewing by-owner listings alongside agent listings, because sites like ForSaleByOwner.com offer sellers the opportunity to use the Multiple Listing Service (MLS), as well as automatically advertise their listing on Trulia and Zillow and other popular real estate sites. That way, their homes will get the same sort of exposure as those represented by a real estate agent.
As the real estate market continues to recover, home sellers reported that they typically sold their home for $25,000 more than they paid or it (up from $20,000 in 2012), according to the NAR report. Yet agent commission fees are still a considerable chunk of the seller’s price gain. As an example, on a $300,000 home a seller can owe up to $18,000 in agent fees. By-owner sales costs amount to a fraction of agent fees. By-owner listing costs amount to a fraction of what traditional sellers end up spending. For comparison, a ForSaleByOwner.com seller may pay as little as $80 to list their home and never owe an agent commission fee.
While NAR claims that “as the market changes and evolves, the need for a professional to help with the transaction has increased,” heavy use of the Internet by consumers suggests just the opposite. As buyers and sellers become more tech savvy, they want more control over the experience and are adept at using online home-selling tools to do it themselves.
Google and NAR recently did a joint study entitled “The Digital House Hunt: Consumer and Market Trends in Real Estate” that concluded:
In today’s complex, rapidly changing and digitally driven media environment,
capturing a home shopper’s attention in order to build a real estate business
and personal REALTOR brand is tougher than ever.
In other words, even NAR acknowledges that these days it’s hard to establish a real-estate practice amid the increased online expertise of the buyers and sellers. The importance of Internet home shopping is illustrated by a whopper of a statistic in the report: Real estate-related searches on Google.com have grown 253 percent over the past four years.
By-owner sellers are feeling the effects of house hunters searching the Internet. After selling her Newport News, VA, home for $282,000 using ForSaleByOwner.com, Donna Smith said: “The listing on the Internet also produced a lot of ‘hits’ from people looking to buy a house. The buyers that ask for a tour are more serious than ones led by a real estate salesperson.”
The speed of the digital marketplace also impresses by-owner sellers. They no longer have to wait days for their ads to appear in the newspaper; online listings reach motivated home buyers immediately. Azad Yepremian sold a house in Westchester, PA, this year for $260,000: “We listed it with little expectation of it selling quickly and were thrilled when we received an offer within five days of listing!”
Eliminating the middleman can provide intangible benefits as well, including more direct communication between the buyer and seller. That’s a very good thing. After all, no one knows your home and your neighborhood better than you do. A real estate agent might not know that there’s a great dog walker just around the corner, or where to take your dry cleaning, or who’s the favorite kindergarten teacher at the local elementary school. Buyers value this insider information.
In addition, if both sides forego a traditional real estate agent, there’s a chance for the home buyer and seller to negotiate a home price directly without the added costs.
The Internet has helped make many things easier and streamlined many processes. It connects people as never before and opens up a world of choices–and savings.
All that power can be yours when selling your home by owner.
We want to know: What digital solutions have made your life easier?