Ooh, baby, baby it’s a wired world — but what is going to change in residential real estate in the next 12 months? Almost nothing . . .
One of my clients gave me a wake-up call late this year. She has a computer, but she’s never unpacked it in her current home. I don’t know if the computer is robust enough for broadband, but it really doesn’t matter, does it? I’ve been ferrying listings to her by car — printed on paper, stuffed in envelopes and parked under her doormat. Just lately she acquired a fax machine, which is convenient. We have a house under contract and there is a lot of paper flowing back and forth. Certain oil-rich sheikdoms might weep, but everyone else can breathe freely — and from a cleaner air supply.
This is a weird world for a wired Realtor, but guess what? It’s the real world. My own sweet mother is such a Luddite that we’re buying her the dumbest dumb terminal I have ever seen for Christmas. We started out saying, “When all you have is a hammer, everything looks like a nail.” By this point, we act as though we believe that everything is a nail.
This is incorrect.
For one thing, buyers and sellers of residential real estate are not on-line in concentrations greater than other demographics. How could they be? Young people, yes. Technophiles, yes. Everyone else…? Not so much.
Moreover, whether or not buyers and sellers are poking around on-line, for the most part they are not making life-altering financial decisions in untouched-by-human-hands on-line real estate transactions. There might be a news story about a crazy young couple taking the plunge, but you need to stop for a moment to recall that that exact page of the newspaper only just last week was devoted to a young man who has never cut his toenails. What makes news? The exception, not the rule.
We are too much misled. The exception is interesting, but it’s interesting because it’s rare. We ignore the commonplace because… well, it’s commonplace. In the last year, we saw the launches of dozens of new Realty.bots, each one devised to provide easier access to information that was, for the most part, already available. What changed in actual, on-the-ground residential real estate transactions? Almost nothing.
Over the next year, you will hear repeated references to The 2006 NAR Profile of Home Buyers and Sellers. Why will this be cited? Because it’s pre-packaged PR pabulum spoon-fed to reporters. Should it be cited? Out of 129,5000 recent home-buyers and sellers contacted by the NAR, only 7,548 responses were deemed usable. In other words, 94% of the people “surveyed” threw the survey away. Whatever the nature of the responses, to rely on them as a guide to anything — except some sort of fanaticism — seems to me to be a huge mistake. The NAR heard from people who either loved or hated their Realtor (or all Realtors) and no-one else. Who cares what the survey says, taking account that we already know it must be inherently wrong?
And yet this is the survey that will underly any number of potentially bogus claims about how important the internet is to real estate transactions. As many as three-quarters of all buyers will begin their home search on the internet — and yet, somehow, not a single one of them is in your extended family. Uncle Ned, who has never successfully bought a book at Amazon.com without help, is going to buy a ski-lodge sight-unseen on the web.
I love technology, but I love it for what it is. Would you like to know what is the ultimate best hi-tech real estate tool invented so far? Email. My clients can talk to me when they have time, I can reply when I have time. I tend to carry out extended conversations by web-page or full-blown web-site. Three letters I can’t live without that I almost never mention to my clients: FTP. Second to email — and first when I’m out of the office — is my BlueTooth headset. If you’re looking for some big hi-tech investment in a Realty.bot, look elsewhere. Those toys are cute and fun, but they have nothing to do with my job. The information they “share” is next to useless, and that’s why it’s “free.”
Want proof? Don’t tell me about the house you found on-line, tell me what is the best day, strategically-speaking, to make an offer on it? How much below list price can you get away with? How should the closing costs be structured? How much of an earnest deposit is enough? Is it better to pay 20% down or to keep that money invested and go for 100% financing? What closing date is most to your advantage? Before you run off looking for definitive answers to those questions, there aren’t any. They’re all trade-offs, and which works best in your particular circumstance is a matter for expert analysis.
And who would that expert be?
I love, love, love everything that is happening in the world of hi-tech real estate. But as fascinating as these new technologies might be, they probably won’t make much difference in how the business of residential real estate is transacted. The internet can make the easy parts of the process easier, and it may, in the long run, make some of the harder parts faster. But there is no substitute for an experienced professional when it comes time to put a deal together — and to keep it from falling apart.
There will be a lot of real estate news in the coming year, and BloodhoundBlog will cover it all. But what is really going to change in residential real estate in the next 12 months? Almost nothing…