According to the National Association of Realtors, 60 percent of homebuyers are using the Internet to get home buying information, and Jupiter Research predicts that by 2005, that number will be as high as 80 percent.

Why are homebuyers turning to the Internet before talking to their local Realtors? Here are just a few reasons.

• Attitudes have changed. While many financial planners would disagree, buyers' perceptions about homes have changed. No longer are homes perceived as the bastion of stability that they were in past generations.

  That's partially due to the mobile society created during the baby boomer generation. According to the Center for Generational Studies, boomers drove the current economy by being the first generation to buy "on credit." Just as previous generations worked all their lives for the same company and lived in the same home for generations, boomers concentrated on being upwardly mobile, at the cost of leaving extended family and neighborhood values behind.

  Subsequently, homes were soon perceived as more of a commodity, something that can be used and traded in as needed, much like an automobile. Today, mobile home buyers are more frequent than ever. First-time buyers stay in their homes an average of four years, with second-time homebuyers remaining in their homes seven to eleven years, according to the National Association of Realtors. Few homebuyers stick with their original choice of home through the life of its loan, which has given rise to new credit products to accommodate such mobility.

• Easier Credit Means Trading Up Earlier. The American economy is built on credit and the loan rates and terms extended to homebuyers are generous. Low interest rates, special programs for veterans, disadvantaged families, and first-time buyers have helped to drive ownership to record levels. Relaxed lending standards, including zero or low money down loans and private mortgage insurance have made it possible for many to buy beyond credit limits of the past.

• Homes Are An Investment. Today's home buyers expect to make a profit when it comes time to sell.

  Homes have traditionally kept slightly ahead of inflation, making them a great place to live, but not much of an investment as far as growth gains go. In the early eighties and the late nineties, that changed with homes showcasing double digit increases in many areas of the country, often outpacing gains made in the stock market, and other investments.

  Interest in homebuying was further encouraged by the Tax Relief Act of 1997, giving many homeowners the ability to earn hundreds of thousands of dollars on the sale of their homes without paying capital gains.

  Today, about 68 percent of the population own their own homes, a strong indicator of the record pool of home buyers that are entering the home buying pool for the first time, and needing the most basic as well as sophisticated home buying information.

• Internet Technologies Make Searching Easier. Database technologies have enabled brokers, agents and third-parties to distribute and display more information about listings, loans, and other home buying information than ever possible before.

  Where else can buyers take a virtual tour of a home's interior, view loan products and calculators to buy the home, find neighborhood, school and recreational information, and ask questions of the listing agent all at the same place?

  Adding to the appeal of the Internet is its 24-hour service, enabling these buyers to do their homework at their own pace. They can search for homes after the children go to bed, or at work using the boss' high-speed Internet access.

To make a competitive bid on a home, get the right loan at the right rate, and appear somewhat knowledgeable before making such an investment, many buyers feel that they have to start the information gathering process far ahead of talking to a Realtor. But does that mean that Realtors shouldn't waste their time with these information hounds?

On the contrary. Studies have proven that Internet buyers are usually sincere - they just do more investigation up front instead of relying on a real estate professional. They can work on their schedule instead of relying on a Realtor's availability.

And that is where the opportunity lies for brokers and agents. The CAR says that seventy-one percent of Internet homebuyers were first shown the home they purchased by a Realtor. 78 percent of Internet buyers choose their Realtor from the Internet. And 97 percent plan to use the Internet again the next time they choose a home.

That means that only Internet-savvy agents will get to work with these buyers.

Published: October 23, 2001

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