The NAR's latest home buying and selling survey offers lots of good news for REALTORS®, particularly those who do business on the Internet. According to the latest statistics compiled by the NAR, nearly four in 10 buyers now use the Internet to shop for their next home, but instead of disintermediating the Realtor, the survey found that 87% of Internet shoppers are more likely to use a real estate professional compared to 76% of offline buyers.

NAR's 2000 Profile of Home Buyers and Sellers tracks the demographics of home buyers and sellers and the effectiveness of marketing tools as used by the real estate industry to reach and serve consumers. The survey found that 37 percent of all home buyers use the Internet to search for a home, an eighteen-fold increase in only four years.

The study found that Internet shoppers buy more expensive homes than do traditional buyers. Web shoppers paid a median home price of $138,000 in 1999, while non-Internet users paid $120,000. That's because Internet shoppers boast higher earnings - $69,900 median income vs. $55,800.

Where did the shoppers visit to view homes? Realtor.com, the NAR's Web site, was cited as most popular by 61% of Internet buyers.

"The Internet is empowering consumers and making them more knowledgeable, said NAR President Dennis R. Cronk. ''In these times of low inventories in many local markets, many buyers are using the Internet to look for their next home quickly and easily."

Growth Opportunity in Buyer's Representation Remains

According to the survey, forty-six percent of buyers who purchased a home hired a buyer representative, and two-thirds of all buyers said they would definitely use the same real estate agent again in a future transaction. That is a tremendous growth opportunity for agents who wish to serve a market that has less than 50 percent penetration. What was not made clear in the survey results was how many buyers purchased homes through the listing agent, on the Internet or offline.

Bad News for FSBOs

The study also refuted claims by commission-slayers that hot sellers' markets breed more FSBOs. The survey, conducted in conjunction with Experian and tracking about 1,700 solds and purchases, found that only 16 percent of homes were sold directly by owners in 1999, a slight reduction from 18 percent in 1997. In previous hot markets, said the survey, as many as 20 percent of owners would try to sell without an agent. The survey underscored the point that the median selling price of a home sold directly by an owner was only $113,000, while the median selling price of a home sold by an agent was $129,900.

Realtor.com, NAR's Web site, was the most popular Web site visited by buyers, cited by 61 percent of Internet shoppers.

Marketing DOM's Cut by a Fourth, Closing Times Cut by a Third

One of the most interesting statistics to emerge from the survey was the length of time in which contracts went to closing - an average of four weeks in 1999, compared to six weeks in 1997. The average home was on the market only six weeks in 1999, down from eight weeks in 1995 and ten weeks in 1991. Improving technologies, including the Internet, take some of the credit, according to Dr. Fred Flick, research analyst for the NAR

Sharpen Your Internet skills, but don't chuck that newspaper ad campaign yet

Agents should be aware that the glowing reports of Internet home viewings don't match the reality of closed sales. Despite evidence that 40 percent of consumers are using the Internet to search for homes, only four percent found the home they bought on the Web.

The good news is that when it comes to where people first learn about the home they actually end up buying, 49 percent identified real estate agents as the source. Fifteen percent found their home with yard signs, eight percent through newspaper ads and another eight percent from a friend, neighbor or relative.

With the NAR and Realtor.com heavily invested in the present and future of the Internet, the low close rates of Internet shoppers has to be a concern. If lots of shoppers are searching the Internet and not finding the homes they buy, what can that fact signify? Are the homes being bought not being shown on the Internet? Could the available inventory be stale? Are pocket listings an unrecognized factor? How effective are the lead generation tools available on the Internet? Are agents taking advantage of lead generation tools? Are agents being contacted online and then showing Internet buyers other homes? If so, the Internet could be the strongest lead generation vehicle ever because of the unique communication tools of email and instant messaging.

Cronk explained, "What this tells us is that buyers think it's important to look far and wide to buy a home, but when it comes right down to it, real estate agents, along with their access to multiple listing services, are where the action is. In addition, the Internet is allowing buyers to shop and educate themselves at their own pace and at their own convenience, making it easier for people to take the next big step in contacting a real estate agent.''

"However, agents who do not have a Web presence and are not technologically savvy are at a disadvantage in terms of being sought by the 37 percent of shoppers who look for a home on the Internet and are comfortable in using e-mail and technology,'' Cronk said. "Three-quarters of survey respondents said it was somewhat important for their real estate agent to be "Internet savvy.''