Agents still key in real estate deals

In the 2005 NAR Profile of Home Buyers and Sellers, nine out of 10 home buyers indicated that they used a real estate agent in the search process, but use of the Internet to search for a home has risen dramatically over time, increasing from only 2 percent of buyers in 1995 to 77 percent in 2005. The next largest source of information for buyers is a yard sign, mentioned by 71 percent of buyers.

The survey, based on more than 7,800 responses to a questionnaire mailed to a large national sample of consumers located through county deed records, is the latest in a series of surveys evaluating demographics, marketing and other characteristics of home buyers and sellers.

Jim Bolin, general manager at Carol Jones, Realtors, said the firm has had a Web site at www.caroljones.com since the mid- to late 1990s. Bolin said he's not surprised that while Internet use has increased in real estate, people are continuing to rely on agents, because a Web site is simply an enhancement to the business.

“The Web site is to reach out to buyers and sellers that maybe we wouldn't have normally been able to get to,” Bolin said. “Even our yard signs - if you drive by at 10 o'clock at night, you may not call the Realtor because it's too late, but you can certainly go home and do your own research (on the Web site) by plugging in an address and pulling up information on that home.”

In the survey, 24 percent of respondents indicated that they learned about the home they purchased online, up from 15 percent in 2004 and just 2 percent in 1997. Another 36 percent first learned about the home they bought from an agent, and 15 percent found their homes from yard signs.

The survey shows 81 percent of buyers who use the Internet to search for a home will go through a real estate agent to purchase it, while 63 percent of non-Internet users buy through an agent; non-Internet users are more likely to purchase directly from a builder or an owner they knew in advance of the transaction.

“What the Internet does, I think, is (it) makes for a better prepared buyer, typically … because a lot of times, they've done a lot of preparatory work themselves. They've done a lot of research, they've looked at different sites,” Bolin said.

Choosing an agent

NAR Senior Economist Paul Bishop said both buyers and sellers use traditional methods to choose real estate agents.

“Word-of-mouth recommendation is the most common way to learn about real estate professionals,” Bishop said. “The most important criteria, whether you're buying or selling, are the individual agent's reputation and their knowledge of the local market.”

Agents' response times also are key, particularly in the age of technology, Bolin added.

“(Buyers or sellers) may have looked at different agent sites, and they may have e-mailed agents for information and found out … if they e-mailed 10, they only got a response from one,” he said. “Then, they've made their selection of an agent, perhaps, based on their technology skills.”

Carol Jones, Realtors teaches in its agent classes that all phone calls and e-mails should be returned within 24 hours, but clearly, Bolin said, that's too long.

“What we've seen is that sometimes an e-mail lead or contact will come in, and we contact them four hours later, and they've already called or made contact with three other agents,” he said.

Bolin said Carol Jones, Realtors is considering adding software that would contact agents by telephone when they receive inquiries via the Web site. Also, he said, more and more agents are using cell phones with e-mail capabilities, enabling them to respond to inquiries more quickly.

NAR's survey showed that 44 percent of buyers were referred an agent by a friend, neighbor or relative; 11 percent used an agent from a previous transaction; 7 percent found an agent on the Internet; 7 percent met at an open house; and 6 percent saw contact information on a “for sale” sign. Six other categories accounted for smaller shares each.

Real estate transactions are complicated, and sometimes difficult, Bolin said, but Realtors are familiar with the process.

“The thing to remember about agents, the Realtor who represents clients, whether on the seller's or the buyer's side, is that they're in the center of the transaction,” Bolin said. “Everything comes to them … everything that revolves around that transaction, there has to be a center point for it, and the center point for a real estate transaction is not really the buyers and the sellers. It's the Realtors, typically.”

Who's in the market?

According to the survey, married couples make up the largest share of the housing market, accounting for 61 percent of transactions. Single women purchase 21 percent of homes while single men account for 9 percent. Unmarried couples were 7 percent of the market, and 2 percent were listed as other. In 2004, 18 percent of buyers were single women and 8 percent were single men.

The typical buyer walked through nine properties, searched eight weeks to buy a home and moved 12 miles from his or her previous residence. The typical seller placed a home on the market for four weeks, had lived in it for six years, moved 15 miles to a new residence and previously owned three homes including the one just sold.

Four out of 10 respondents are first-time buyers, a finding that has been consistent for more than a decade. The median age of entry-level buyers is 32 years, also typical over time, and the median household income was $57,200. Buyers made down payments of 2 percent on homes costing $150,000, but 43 percent purchased with no money down. Of first-time buyers who made down payments, 23 percent received gifts from a friend or relative.

In all, 94 percent of buyers and sellers believe their home purchase is a good financial investment.