Tuesday, January 17, 2006

More Reliance on Agents, More Internet Use - NAR

NAR does a survey of homebuyers and sellers every year that gives insights into how the industry is changing. Although NAR is out of the US, CREA does not do a similar survey (as far as I am aware) so we have to go with the American stats. When it comes to technology, Canada generally has a faster adoption rate than the US, so we can assume our stats are similar, if not slightly higher. I did read a survey from Ipsos Reid last year that showed exactly that.

This year's NAR survey shows an increase in internet usage when searching for a home from 2% in 1995, to 77% in 2005 (it was 74% in 2004). How a decade can change an industry! 24% of buyers said the first learned about the home they ended up purchasing on the internet, up from 15% last year.

“Buyers who use the Internet in searching for a home are more likely to use a real estate agent than non-Internet users, and consumers rely on professionals to provide context, negotiate the transaction and help with the paperwork,” said Stevens, senior vice president of NRT Inc.

In fact, 81% of buyers who used the internet as part of their search, purchased their home through a real estate agent, as compared to 63% on non-internet searchers.

“We find that the level of for-sale-by-owners is on a sustained decline and is now at a record low. In addition, a growing share of FSBO properties are not placed on the open market – they’re private transactions,” Stevens said.

Only 13% of sellers sold on their own (of which 39% were between parties who knew each other in advance), down from a cyclical high in 1997 of 18%. The median price of homes sold with the help of an agent was 16% higher than those sold FSBO.

When it comes to choosing and agent, most people were referred by a friend or family member, and the most important factor in deciding on who to use was reputation. 85% of buyers and 82% of sellers said they were likely to use the same agent again.

The complete survey results are available here, and include other stats mostly to do with demographics of home buyers and sellers.


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