Online Home Loan Search Begins to Replace Need for Real Estate Agents
As The Lexington Herald Ledger puts it: It may come as no revelation to anyone looking at a computer screen at this moment, but the National Association of Realtors reports that technology “is dominating many aspects of the real estate transaction process.”
Case in point: On November 13, HomeSale Settlement Services, in collaboration with Simplifile, the Lancaster County Recorder of Deeds and the National Notary Association, transacted the first completely electronic home sale closing in Pennsylvania.
The closing “sets the standard for the title and real estate industry in [the Pennsylvania mortgage market],” said Steve McDonald, who is Lancaster County’s recorder of deeds, “and brings the real estate industry completely into the digital age.”
Nevertheless, the Realtors association’s 2006 Profile of Buyers and Sellers said most consumers prefer the traditional method of buying a home - using a real estate agent.
Because the group is made up of 1.5 million real estate agents and home mortgage brokers, a survey finding to the contrary would have probably shaken the housing industry to its foundations.
However, as chief economist David Lereah told the association’s convention last month, most of the 7,500 people responding to the annual survey said that “they begin looking for houses online, but most often learn about the home they buy from a real estate agent.”
Lereah added, “Even the buyers who learn about the house they buy online buy it through a real estate agent.”
Those responding to the survey bought or sold a house between July 2005 and June 2006, which covers some of the early sluggishness of the housing market, said the Realtors group’s Paul Bishop, who handled the research.
“During that time, the number of first-time buyers dropped to 36 percent of the market from 40 percent, despite historically low mortgage rates,” Lereah said. “The issue is affordability, since the price increases during the housing boom hurt first-time and low-income buyers. As affordability improves, the number of first-time buyers will increase.”
The survey also found that 22 percent of home buyers in 2006 were single females, compared with 14 percent in 1995, which “says more about the society in both of those years,” Lereah said. “The percentage of couples buying houses fell to 61 percent in 2006 from 77 percent in 1995.”
“Despite the increase in their numbers, single buyers continue to struggle with down payments and other costs associated with buying a house,” he said.
While Lereah insisted “all real estate is local,” the national figures represented by the survey show that houses remained on the market for six weeks in 2006, compared with four weeks in 2005.
Nineteen percent of seller-respondents put their houses on the market because they were too small, 13 percent because the neighborhood had become less desirable, and 10 percent to move closer to their jobs.
The majority of sellers owned their houses for at least six years, “which has been consistent over the last five years,” Lereah said. “We didn’t catch any flippers in the survey,” even though 6 percent of the respondents said they had owned the houses they were selling less than a year.
Reduced affordability in housing- coupled with the departure of investors from many overheated, now quickly cooling, locations such as California, Southern Florida, and the District of Columbia - has been blamed for the current sluggish market.