The Internet - Changing Search Dynamics

Today, prospective purchasers are increasingly starting their home searches on the internet. The internet is initially used as a broad search tool. It is also used to exclude or eliminate homes. A bad web presence (ie. incomplete information, poor photographs, irregular updates, etc.) is as bad or worse as having no web presence.

Although a corporate website is a good starting point, the internet marketing model of driving internet search traffic to a company or developer website is also changing. Prospective purchasers are using a variety of search engines and gateway or portal sites for their searches. There is no longer a single point of entry. To be successful in sales, you need to drive people to your websites, advertisements, etc. Otherwise, you are simply waiting for the telephone to ring or worse driving leads to your office and not directly to you.

To succeed today, real estate professionals need to adapt to these changes by maximizing their exposure on the internet. There is no single solution. However, a strong web presence incorporating multiple formats is a necessity. The reasons are explained below.

Statistical Studies

Recent studies reported by the National Association of Realtors have reinforced how important internet marketing has become. The internet has caused a fundamental change or shift in the dynamics of how how prospective home purchasers are searching for new homes. The primary finding of the study is both clear and powerful - that is, if you are not actively marketing your services on the internet, you are missing 57% of the market of prospective purchasers. The practical impact is that the lack of a strong web presence is costing you both time and money.

Here are some of the other findings:

• 70% of purchasers used the internet as a part of their home search (up from 28% in 2000).
• 86% of purchasers using the internet searched the internet prior to looking for a specific home.
• 14% of purchasers using the internet searched the internet prior to contacting a real estate agent.
• Purchasers using the internet as a part of their home search spent an average 4.8 weeks doing research on their new home purchase. Traditional purchasers spent only 1.7 weeks performing research.
• Purchasers using the internet as a part of their home search bought a home after 2.2 weeks of working with an agent. Tranditional purchasers spent an average 7.1 weeks of working with an agent prior to purchasing a home.
• Purchasers using the internet as a part of their home search previewed an average of 6.7 homes using the internet to eliminate homes that they didn't want to see. Traditional purchasers previewed 15.4 homes prior to purchasing their new home.
• The distance between current residence and new residence was 25 miles for traditional purchasers and 242 miles for purchasers using the internet.
• 69% of purchasers using the internet as part of their home search said response time was "extremely important."
• 83% of purchasers using the internet as part of their home search said the favored method of communication with their agent.
• Internet purchasers were more satisfied with their agent ranking 4.3 out of 5 compared to tranditional purchasers who had a satisfaction rank of 3.3 out of 5.
• 91% of purchasers using the internet as part of their home search stated that their primary reason for satisfaction with their agent was "quick response time" compared to 35% of traditional purchasers who stated that there primary complaint was the need for "faster response time."
• 97% of internet purchasers said they would use the same agent again compared to 50% for traditonal purchasers.

It doesn't take an economist to conclude that the internet has fundamentally changed how purchasers search for homes. The prior search practices of viewing classified print ads or driving the neighborhood appear to be on the decline. Real estate professionals are faced with a Darwinian connundrum - adapt or face extinction.

In reviewing the research data, I have reached the following conclusions:

1. Internet purchasers have developed clear housing search criteria, have used the internet to exclude properties from consideration, and are more prepared to buy when they visit your properties.
2. Internet purchasers have a shorter buying cycle.
3. Internet purchasers demand faster, more immediate responses.
4. Agents who embrace technological change are more highly regarded and more likely to obtain repeat business and referrals.
5. Agents who focus on internet market expand the scope of their market from a 25 mile radius to over 250 miles.
6. Marketing budgets that focus on printed brochures, newspaper and other traditional media should be reconsidered and redirected to internet marketing.
7. Creating a Web Presence

Creating a Web Presence

Unless you are in a state of denial about the internet's importance to real estate marketing, real estate professionals need to actively change their marketing stategy. This blog entry discusses some of free or low cost initiatives to create a web presence outside of the general company websites.

Search Portals: Real estate search engines consolidate listings from multiple sources into a single location. Purchasers using the internet can search on homes for sale or rent. These sites provide prospective consumers with essentially an open MLS service. Sites that are popular search portals include GoogleBase, Yahoo Classifieds, Oodle, Vast, Trulia, and Craigslist. These websites provide increased exposure to your listings including volume as well as georgraphic area. However, the format is more akin to classified advertising in the local newspaper than a multiple listing service.

Aggregators: Aggregators simplify the process of being listed on search portals by collecting or aggregating listings from multiple sources into a single location. Popular aggregator websites include Trulia and PropSmart for homes, HotPads for apartments and rentals and MyNextDeal for commercial properties. These websites provide increased exposure to your lisitings as described above. The format is more akin to a multiple listing service.

Syndicators: Syndicators provide a single point of entry for distribution of classified advertisements to search portals, aggregators and other online marketplaces. A single classified advertisement requiring a single data entry is disseminated to multiple sites. Popular syndicator websites include vFlyer, Point2, and Postlets. These websites provide basic free syndication and more advance features such as statistical tracking on a paid basis.

Social Networks: Social networking sites or community sites allow agents to advertise their services and encourage the active development of a network - both professional and social - for the development of new sales leads and referrals. Popular social networking sites include ActiveRain, MyBlogLog, MySpace, Facebook, LinkedIn and Plaxo. These websites assist in the development of a network for professional referrals.

Blogs: Blogs, started originally as personal journals, now are often used to convey information on local market conditions and to demonstrate competence and expertise in your practice areas. Popular blog sites include ActiveRain and Point2.

Real Estate Communites: Real estate communities usually have multiple forms of interactive communication ranging from blogs, forums, and other methods of communication. These sites allow you to seek out other opinions, ask questions, and share your expertise. Popular real estate communities include Active Rain, Point2, Inman, and Zillow.

Mapping: Mapping websites provide a sophisticated marketing tool. These site have a wide range of uses ranging from driving directions to identifiy local amenities to provide topographical and aerial mapping. Popular mapping websites include YahooMaps and Google. However, these interactive maps are becoming more specialized with informational overlays. Interactive mapping sites particularly useful to real estate professionals and prospective buyers include Zillow, Neighboroo, Trulia and Hotpads.

Valuation: Valuation websites provide a good starting point for determining price points for a home and are used by both real estate professionals, owners and prospective buyers. Popular valualtion sites include Zillow, eppraisals, and Home Gain. Other websites track trends or offer market predictions. Popular market trend or prediction websites include My-Currency. However, the downside to these websites is that all real estate markets are local. The major downside to some of these websites is that they don't break the information down to particular neighborhoods and submarkets.

Agent Websites: Agent websites, often free or low cost, provide a good mechanism for "servicing the sale." Although such sites have limited use at driving new sales leads, the sites play an important function in promoting the services of individual agents by promoting "value added" resources as simple as links to existing customers and prospects. Popular agent websites include Point2. The Point2 website also has additional features such as syndication, virtual tour creation, lead management, and statistical tools.

Video: Video remains an underutilized tool. Whether the focus is on community building, branding, public service announcements or individual listings, video is becoming an important tool for real estate professionals. Popular video distribution sites include YouTube.

Benefits of Creating a Web Presence

The creation of a web presence has many benefits. Here are a few of the many benefits:
Save time. Automate repetitive functions such as listing entries, classified advertise postings, or reproduction of brochures.

1. Save money. Utilize free or low cost advertising and marketing tools.
2. Disseminate your listing information to a national or regional audience.
3. Increase referrals from other real estate professionals.
4. Attract prospects that are prepared to purchase.
5. Decrease the search and buying cycle time.
6. Drive qualified leads directly to the agent.
7. Improve customer communication and the dissemination of information.
8. Add "Value" to real estate transaction.

Conclusion

The internet is constantly evolving and improving. Although I personally use the websites listed herein, the list of websites are by no means an exhaustive list of providers of the same or similar services. If you want a list of links to some of our favorite real estate tech took, visit our website.

PREA SIGNATURE REALTY is a full service brokerage and consulting firm located in Saint Louis, Missouri. If you are interested in our sales training, sales management, and other consulting services, please contact Ryan Shaughnessy at 314.971.4381 or Michelle Silies at 314.397.3182.