The California Association of Realtors does an annual survey to compare the internet buyer and the traditional buyer. This has become a very useful resource over the years as it can help real estate professionals determine where the should spend their marketing dollars. Take a look at the results and then ask yourself,"Where should my money go?"
We'll start by defining our two types of buyers. An internet buyer is someone who has begun their search for a house or real estate agent through the use of the internet. A traditional buyer is someone who's search started through a more traditional way. For example, newspapers, flyers, brochures, bill boards, etc.
Now we can take a look at what was found. In 2000, the first year of the annual survey, internet buyers made up 28% of the market compared to 72% traditional buyers. In 2007 the roles reversed with 72% of the market being attributed to internet buyers and 28% traditional buyers. There are multiple reasons that have lead to this rapid increase.
First, buyers who use the internet feel that they become more knowledgeable about the real estate process. This helps the buyer to become more comfortable when appoaching an agent. It also makes the agent's job easier. The agent is now able to spend more time focusing on finding the property for their client and less time educating the buyer.
Another reason that has led to the internet trend is the service the buyer receives. Internet buyers report a 98% satisfaction rate with their agents compared to 81% by traditional buyers. Response times are quicker and occur more often. Buyers also enjoy being able to do some of the research themselves. Many websites now provide the buyer the option to run their own searches. This helps reassure the buyer that they are getting what they want and not just what the agent wants them to see.
The growth of the internet in general is one of the main causes of the increase in internet buyers. The internet has become the ultimate resource with limitless information. It's easy and accesible.
So is this change good or bad for real estate agents? I'll let you determine that for yourselves, but keep these facts in mind:
1. Internet buyers on average spend 2.2 weeks with their agent before buying compared to 7.1 weeks for traditional buyers.
2. Internet buyers on average preview 6.7 homes before buying compared to 15.4 by traditional buyers.
3. Internet buyers are typically younger, make more money and buyer more expensive houses then the traditional buyers.
Subscribe to:
Post Comments (Atom)
5 comments:
I just want to thank everyone in advance for your thoughts and comments!
I think this is good for the agents, the process is more efficient for them. Of course, those who adapt to this change in marketing/advertising medium will benefit the most. What I also found (anecdotally) is that the buyers tend to hit the general sites - Ziprealty, Redfin, Remax, C21, etc. - rather than individual agent's websites. So I wonder how beneficial setting up one's own websites are. It seems more beneficial to leverage the agent's affiliation companies somehow.
gepetohong
Thank you for your response. I agree that a majority of buyers tend to go to the bigger sites. The key for agents is to include their website URL in every form of advertising that they use. There are also ways to move up the search engines, this just takes time. As with anything, the harder you work the more benefits you will see.
Great topic Ken! I am a production home builder in Northern California and trying to make it through this historic downturn. One of the reasons that home builders have typically use print advertising is the shelf life. TV and radio spots are there during the commercial, but then disappear from the buyers mind once the add is done. Print adds can sit on your counter forever. The internet is a tweener; 1) it can be more permanent than TV/Radio (assuming that you can get back to the website) and 2)you can print our your results.
Home building is an industry that has resisted change. The reason this is because home buyers want a house that was constructed just like their parents house. In a production environment, the most effiecient construction method is to "manufacture" the home. However, if the home buyer see this, the value drops as it is now considered just a little better than a double-wide trailer. As builders we go to great lenths to hide prefab parts, panel plants, etc. as these decrease the homes value in the eyes of the home buyer. Although homes are more efficient then ever and there is more regulation than ever, I still contend that the biggest technical advancement in the production of a home is a nail gun! LOL.
We also are in an evironment where many of our subcontractors do not even own a computer. Some great scheduling and bidding systems are out there but they have been very slowly accepted into the trades. Home builder are just now starting to see home buyers using the Internet more to do their homework and we are just now starting to accumulate statistics on whether or not the internet is working.
We also realize that no-one is going to actually purchase a home over the internet,it's just too big a purchase. This is way different than buying a car, typically a person's second largest purchase, where the manufacturer, model, color, options, etc are standardized. Instead we use the Internet to get potential buyers out to our location then we really do the selling. We also realize that since this is such a big purchase, that any "bootleg" sign that shows an arrow to a competing project will also get a visit from a potential buyer just to be sure of their choice in homes.
Thank you for your insight. You make a great point about people not buying the house online. Websites don't sell houses, people do. It's been that way forever. Newspapers don't sell houses either, these are just resources that we use to bring the buyers to us. The question is, which resource will bring the most buyers?
Post a Comment