|BUSINESSWEEK ONLINE : OCTOBER 18, 1999 ISSUE|
Let Your Keyboard Do the House-Hunting
Would-be buyers can see homes near and far on the Web
LaRae Maruyama, controller for the U.S. Olympic Committee, sifted through about 300 Colorado Springs (Colo.) real estate listings and looked at 60 houses over five months before she found one with the formal living and dining room and mountain view she wanted. But her search might have taken even longer were it not for the latest time-saving tool for buying and selling real estate--the Internet.
Especially helpful to Maruyama was a custom Web page, updated daily with new listings by Jennifer and Joe Boylan, agents for Prudential Professional Realtors. She came across the Boylans because their name was on a sign posted in front of a house that interested her. Their Web-based service alerted her to the home she ultimately bought. Using the Internet ''helped me eliminate properties that did not meet my specifications, and compare attributes of the houses, such as the type of building construction,'' she says.
Maruyama is in the forefront of a fast-growing trend. Save for closing your deal, you can now go through every stage of a home search without leaving your desk. Some 23% of buyers now use the Net as a search tool, up from only 2% in 1995, says the National Association of Realtors. By providing 24-hour access to information, listings, and financing options, the Net expedites what is often a time-consuming and frustrating process.
If you are a buyer thinking of following in Maruyama's path, you might first check Web sites with sections that can demystify the process. Microsoft's homeadvisor.msn.com provides tips on how you can determine whether you're paying the right price. The Housing & Urban Development Dept.'s site (www.hud.gov/conright.html) covers such topics as the role of brokers, anti-discrimination laws, and explanations of the fees you will be charged.
Once you launch a search in earnest, you'll find most sites allow you to create a profile of the home you want, from its location and price to the number of bathrooms. But the resulting listings vary greatly in comprehensiveness. For instance, some listings aren't updated regularly. And some national sites, such as online auctioneer Homebid.com, lack listings for entire cities and states. That's why it helps to search for Web sites of local real-estate agents.
PANORAMA. I conducted a trial search and found that one of the best--or at least the most comprehensive--sources for listings is the NAR's Realtor.com. My goal was a home in the Minneapolis suburb of Golden Valley, with at least three bedrooms and two bathrooms, 2,000 to 3,000 square feet, and a price range of $100,000 to $400,000. Realtor.com, whose database contains 1.3 million properties collected from Multiple Listing Services, an information-sharing system used by agents, yielded the largest list of homes for sale, with 36 properties that met my specifications. Homeadvisor.msn.com and Homebid.com showed nothing at all. Homes.com had no listings for Golden Valley, but it yielded six for the county it is in, Hennepin, which encompasses numerous suburbs. On Cyberhomes, I found 20 properties, but details on them were not as extensive as on Realtor.com.
If you are on the other side of the transaction, the Internet gives you the option of selling your home through an agent, who posts the listing, or by yourself. To avoid paying an agent's commission, look into ''sale by owner'' sites. Owners.com--whose sales, says Chief Executive Hans Koch, have totaled $30 billion since its launch in May, 1996--currently lists 20,000 homes for sale. It offers sellers two three-month ''listing packages,'' one for $139 that allows you to post five pictures on the Net and the other for $89.95 that shows one photo. You will also get, by mail, some traditional marketing tools, including a sign for your front yard and a book on how to sell your own home. You can list on Owners.com for free, but you only get one picture. This one-month listing, like the paid listings, also is distributed through Yahoo! and some other Net browsers. Online realtor PrivateForSale.com will list your house, including up to six photos, for $39.95 per month or $99.95 for four months. To help you determine a price for your property, HomeGain.com offers an instant valuation and a list of recent sales of comparable houses in your neighborhood.
Whether you are selling on your own or via a broker, check if your chosen site offers a moving, virtual tour of your house. Developed by bamboo.com, the tour consists of a sweeping view of a home's exterior and interior areas, such as bedrooms, living room, and kitchen. While the shots can be somewhat distorted, the tour allows potential buyers to see more of the house than any two-dimensional picture could. Dana Weiler, partner and senior sales consultant at Pacific Union Residential Brokerage in Danville, Calif., credits the trendy visual with closing a $599,000 sale of a Walnut Creek home. A couple had liked the house, but the rest of the family was in Southern California. So the absent members got on the Net to have a look. ''They all said, 'You have to buy it,''' says Weiler.
BANNER ADS. Almost every real-estate Web site can connect you with someone selling mortgages. In some cases, banner ads link you to a bank or mortgage company. In others, a click will bring you to a site, such as mortgage.com's or E-Loan's, that allows you to sort through current rates and types of loans, apply for a mortgage, and receive approval through the Net. These online mortgages can be cheaper than the conventional variety.
Through both mortgage.com, which is a lender, and E-Loan, which gives you a choice of loans from more than 70 mortgage companies, you can submit much of your financial data through the Internet and talk with an associate on a toll-free number. To close, buyers are referred to local offices of lawyers, title companies, and business affiliates.
Online mortgages can suffer from snags. Air Force Lieutenant Colonel Tim Printzenhoff of Colorado Springs got a 6.625%, three-year adjustable rate mortgage from E-Loan, a lower rate than from a local lender. But when he arrived at the title company for settlement, he found that his documentation--which he had sent to E-Loan 60 days earlier--had not arrived. He had to fax documents on his investments back to E-Loan before the settlement could occur, four hours late. He also was charged a $675 mortgage underwriting fee instead of the $300 quoted. When he objected, Printzenhoff received a $250 rebate.
Despite such hassles, real estate cybershopping is providing tremendous savings of time and money to homebuyers and sellers alike. Sure, if you're a buyer, you'll eventually need to walk through the door of your dream home and see if that great room really is as spacious as the pictures you saw on your monitor. But think of how much easier the Net made it for you to locate that home in the first place.
By ELLEN HOFFMAN
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Let Your Keyboard Do the House-Hunting
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