April 2017

Real Estate and the .com: Where the Search Begins

Author: Kitty Bartell

As much as potential real estate buyers may prefer, they will never find the Lowcountry landscape dotted with FOR SALE yard signs, primarily, in thanks to neighborhood, community, resort, and plantation by-laws prohibiting their display. Area Realtors often hear the lament, “We did a little driving around, and we didn’t see any properties for sale.” More accurately, what they didn’t see were FOR SALE signs; after all, there is an adequate inventory of property for sale. And while there are still those who prefer the meandering path to finding properties for sale, today 90 percent of home buyers begin their real estate searches online, and they take an average of three weeks before even contacting or connecting with a real estate agent. That’s three weeks during which these buyers are gathering information from online source giants like Realtor.com, Zillow, and Trulia. The old-school standbys of piling the family in the minivan and visiting open houses on a Sunday afternoon, or searching neighborhoods for FOR SALE yard signs, still happen, but represent a more boutique style, less-practiced way of looking for real estate on Hilton Head Island and in gated communities throughout Beaufort County. Once the first stop for buyers, Realtors have now taken on the role of conduit between well-informed buyers and the local market.

The business side of the behemoths of Internet real estate marketing have a relatively short history. Realtor.com came into existence in 1995 as an accessory to the National Association of Realtors, and though only 22 years old, could be considered the granddaddy to Zillow.com (b. 2006) and its recently acquired sibling, Trulia.com (b. 2004). With deep financial pockets, Zillow, and to only a slightly lesser degree Trulia and Realtor.com, skyrocketed into the American home-buying psyche via a wildly successful marketing offensive. In 2016, over 59 million users visited the Zillow group’s sites, and with their strong relationships with Multiple Listing Services, Realtor.com furnishes consumers with access to detailed information pertaining to 97 percent of all properties listed on these services.

In a not-so-scientifically-conducted survey, potential home buyers who eventually connected with a real estate professional to help conduct and complete their property searches and purchases began looking for their perfect piece of our little paradise across all three of the afore-mentioned real estate search sites. Preferences for one site over the others were not easily discernable because, for the most part, the information gathered was compiled into one bucket of information in the minds of buyers.

Zillow’s practice of providing “Zestimates” was the only site-specific component mentioned differentiating the sites. While Zillow’s CEO, Spencer Rascoff claims superiority in the marketplace because Zillow provides consumers with all the secret information Realtors have been ostensibly keeping to themselves for decades, it is their method of calculating “Zestimates” that is the biggest secret of all. According to Zillow.com, “Zestimates” are calculated with a proprietary formula based on public and user-submitted data. This zestimating may be the one real area of concern where consumers should be encouraged to take great care when believing in a property valuation determined by a computer calculation, which is only as good as the unverified public and user data provided it, and of a system where the property in question has not been seen or personally evaluated by the value-estimating source. In an interview with National Public Radio’s Jeremy Hobson, Rascoff provided a caveat, “If you want a more accurate opinion of value, consult an appraiser or real estate agent.” Italicizing their oft-questioned approach, Rascoff personally sold his home in 2016 for $1.05 million—approximately 40 percent below his own “Zestimate” of $1.75 million.

That onerous business aside, Zillow, Trulia, Realtor.com, and several other smaller, but equally captivating real estate search sites are fantastic fonts of information for the real estate-minded. Property details on the various sites range from price, to square footage, bedrooms, baths, and beyond, schools, taxes, neighborhoods, days on-site—even links to mortgage companies ready to begin the process of approving buyers for funding.

On that point, buyers who bring along pre-approval for financing when starting their boots-on-the-ground search are in a much stronger position when offers are made and negotiations begin. If not in a buying-with-cash position, the real estate search sites help consumers hone their hunt by showing them what their approved money will buy in the market in which they are looking. Time is saved and heartaches avoided when non-contenders are taken off the list of possibilities. Of course, and remember this will be said again, always consult a licensed Realtor before crossing a property off the wish list. At times, special circumstances or local knowledge makes what may seem impossible, possible.

Zillow, Trulia, Realtor.com, et al., are time-draining, attention-grabbers—mind you, not by any means in a negative way. With pictures to be perused, it is the visual impact of seeing that dream property in all its four-color, digital glory, that first sells-it: Check out that view, the gourmet kitchen, the baths, the pool, the nooks and crannies, and offices, and garages. In the early days of online listings, the photography was less-than-grand. Taken on grainy-producing formats with poor lighting or bad exposures, it was difficult to see the proverbial forest for the trees. Today, high-quality digital photography is the norm, and getting a true picture of a property is a reality.

Adapting to the rapidly changing face of the real estate business, in large part to the advent of the Internet’s broad reach and flexible applications, successful realtors position themselves to be that conduit between savvy consumers, who likely bring with them a great deal of valuable information, and the properties they desire. And remember, always consult a licensed Realtor when ready to begin a real estate search, because they do have the local knowledge, the professional training, and the negotiating skills to make dreams into reality. If your preference is to be looking for those FOR SALE signs or visiting open houses, they are still out there; you just may have to look a little bit harder these days. 

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