If there’s any lingering doubt about how the Internet is transforming the way people buy and sell homes, here’s eye-widening proof: Marnie Azadian and her husband just moved from Scottsdale, Ariz., into a $410,000 home in Tulsa that they bought 100% over the Internet.
They never visited Tulsa, where Marnie had accepted a job. They never opened the front door, or a kitchen drawer. Never drove around the neighborhood.
“I did have some moments of ‘Oh my gosh, what did we just do?’ ” says Azadian, 57, but no regrets about the house they’d fallen in love with from a virtual tour. (Though her commute is a bit more of “a pain” than it looked like on mapquest.com.)
Risky? Maybe so. But this is just a glimpse of how rapidly and radically the Internet and other techno-gadgets are reshaping real estate sales. Already, 80% of buyers used the Internet to help find a home, according to the National Association of Realtors. Day by day, new real estate tools are surfacing on the Web.
Technology is shifting knowledge and power to buyers and sellers. In doing so, it’s loosening Realtors’ long-standing control of vital information and cutting into their sales commissions. For more than 100 years, Realtors have guarded the details of homes for sale via their multiple listing services. At least 900 regional MLS systems exist nationwide. Unless the MLS systems become more open, unified and technologically sophisticated, they risk being replaced by a Web search engine.
“The Internet is a significant threat to Realtors, who in previous decades have had iron-grip control over all necessary information for those seeking to buy or sell a home,” says Stuart Gabriel of the University of Southern California’s Lusk Center for Real Estate.
Compared with the patchwork of MLS systems, each with its own board of directors, “The Internet search engines may be very competitive and very efficient.”
Signs of upheaval in the industry were evident by late 2005, when the Justice Department filed an antitrust lawsuit against the National Association of Realtors. Justice wants the Realtors to stop letting brokers withhold for-sale listings from low-cost Internet rivals.
The Realtors’ policy is on hold. But Brian McDonald, a deputy assistant attorney general for the antitrust division, says the policy’s restrictions still exert “a chilling effect in the market” because some companies won’t risk introducing new Internet business strategies if they could be undercut in the future.
But even as the two sides file motions, delaying the trial, the Internet is leveling the playing field and prodding the industry to adapt faster than you can say, “Your honor, we’d like a recess to consider new developments.”
In just the past few months: