Real Estate in the digital age

Fifty years ago, it was customary for a potential homebuyer to open a Sunday paper and peruse the ads for suitable family homes before hopping in the car to take a leisurely drive around town, visiting open houses.

On Monday, Dad would call the family Realtor and begin the calculated process of finding a new home, signifying a transition that would occur about five times total throughout his life.

Today, a similar homebuyer also peruses the newspaper, searching for and noting the ads for builders and homes that match his family’s needs. Then he turns on his tablet to look up the sale properties online, to get more details.

He may also sort through an auto-feed of additional listings before texting back his Realtor, who quickly makes appointments to view the homes.

The Realtor begins researching comparables and performing due diligence while engaging his lender who stands at-the-ready to provide pre-approval; he begins packing for one of the 11 moves he will make in his lifetime.

We are living in a digital revolution, and residential real estate is a prime example. To demonstrate this, let’s begin with some statistics, courtesy of a study by the National Association of Realtors, released in 2015.

In 1964, 40 percent of homebuyers cited newspaper ads as a primary source to finding a new home and 61 percent worked with a real estate agent that they knew for support during the transaction.

Today, 43 percent of homebuyers also research properties online, and 87 percent work with a real estate agent to help them through the process.

Broken down by age, the number of home shoppers who take what they find in the newspaper and then engage online includes 95 percent of millennial, 84 percent of baby boom, and 60 percent of greatest generation buyers today.

Here is where it gets interesting: During this home research process, 48 percent of homebuyers used a mobile device (i.e. phone or tablet) and 36 percent of the time, that mobile device helped conduct research from their residence(s).

Gone are the days when a new homebuyer will invest precious time on a leisurely Sunday drive to view a home that may not be a good fit – homebuyers are coming to the table prepared, informed, and eager to execute. This makes sense, given that current homebuyers will now engage in twice as many transactions during their lifetime as their grandparents did.

Socially, it could be said that this is part of our instant gratification culture; no longer must we wait decades to “cash in” on our equity, or enjoy the benefits of our upward mobility.

Practically, it could be said that this is a factor of our rushed and harried lives; we need low-maintenance homes that are ever closer to work, school, or activities so that we can maximize our precious time together.

But while the digital revolution has made information more available to homebuyers, it has also exacerbated the concept of FOMO (Fear of Missing Out).

Among homebuyers in 2014 who did not perform digital research (just the clients, not their Realtors) during their home purchase process, the median search period was four weeks, and included a tour of four homes before writing on offer. Those numbers double when clients add personal online research to the formula – averaging 10 weeks and including a median of 10 house tours before finding a new home.

It seems that more information leads to more choice, but ultimately can also create a stressful quagmire wherein homebuyers believe a “more perfect” real estate opportunity could be illuminated with every browser refresh. At what point does the data, which is meant to serve us, begin to own us?

The truth is that a smart Real Estate opportunity is unique to everyone — it is a nuanced and detailed algorithm of financing, features, layout, location, timing and so much more.

So, too, is the nature of the relationship between Realtor and Client — trust, tenure, values, style, skill, medium, and momentum are all involved.

Technology is an asset to both Realtors and clients in that it streamlines information, communication, and transaction processes. But in the end, at its core, a residential Real Estate transaction is about finding a new place to call home, and that is something we should never entrust to a machine.