Vol 5 No. 22- February 16, 2005

On-line shopping no substitute for real broker

By Louise Bolger
SUN STAFF WRITER

There’s been a lot written recently about using Internet resources to search for real estate to purchase. The Bradenton Herald and TIME magazine had pieces on it and I wrote a column, all making it sound like something whose time has come. But "just shopping" on line is one thing; actually purchasing requires a leap of faith most buyers can’t bring themselves to take.

It’s easy for a buyer surfing the Net to become excited by the prospect of finding his dream home for less money because commission rates are cut to the seller, in addition to inducements given to buyers to purchase through these sites. But the phrase, "Let the buyer beware," has never been truer.

Competition in the real estate market has always been fierce, but it was fierce among traditional real estate brokers. As TIME magazine pointed out, the way real estate is sold hasn’t changed since Eisenhower was president, until now. Discount Internet brokers are challenging the traditional brokerage community. Nationally, the average commission on a house sale has slipped to 5.1 percent from 5.5 percent during the past few years.

Buying a home, the largest financial transaction most Americans ever take part in, is not like buying stocks and bonds, which have really taken off on the Internet. A home is a much more personal transaction, requiring the advice of a combination of David Rockefeller and Martha Stewart.

I investigated some of the most popular Internet brokers and was surprised by the lack of choice provided. Some of the sites: domania.com and houeandhome.msn.com provided a lot of listings, but just referred you to a conventional broker. Good for doing some research but no discounts here.

E-realty.com, ziprealty.com, homegain.com, lendingtree.com and forsalebyowner.com do provide discounts to buyers and sellers but were limited in the listings provided. For instance, homegain.com asked you to practically fill out an on line questionaire before you could get into its listings, lendingtree.com only gave me two available listings on Anna Maria and fosalebyowner.com gave me all of Manatee County, even though I only asked for Anna Maria Island.

The main thing not provided by these web-sites is access to the multiple listing service, the mainstay of the real estate industry. Until the discounters can crack into the closely held listings of traditional real estate brokers, they don’t, in my opinion, have a competitive product.

That being said, nothing is forever, and according to TIME magazine, the Department of Justice is reviewing new rules that have been proposed by the National Association of Realtors restricting access to the multiple listing services. The government is concerned that restricting access is an antitrust issue the National Association of Realtors counters that argument by maintaining listings really belong to home sellers not to real estate agents. And don’t forget real estate commissions are and always have been negotiable, like any other commodity. You get what you pay for.

It does appear that the real estate industry is in a transitional process, but until the transition is done, the best way to see everything available for sale is still through a conventional real estate broker.

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