14 April 2016
Realtor.com by Jonathan Smoke
I have a confession to make: I watch far too much home-related reality TV. Even though I’ve been studying housing and real estate as an economist for more than 20 years, I love seeing real houses, real people, and the natural drama that occurs around choosing (and fixing up!) a home.
But I also know how the made-for-TV approach leaves out the stuff that matters most. If you’re a real estate newbie devoted to “House Hunters” or “Buying Alaska,” you may be left with some very wrong impressions about how the house searching and buying process really works.
Here are some facts from the 2016 National Association of Realtors® Home Buyer and Seller Generational Trends that get conveniently left out of most real estate shows.
On TV, it seems that as soon as the idea of buying a home crosses someone’s mind—whether they’re a property virgin, a multiple-home veteran, or what have you—a real estate agent appears like a fairy godmother, ready to guide their search.
In fact, 42% of all buyers and 38% of millennials say their first step in the home-buying process is looking for properties online. For 13% of all buyers and 18% of millennials, the first step is seeking out information on the home-buying process—also online. Contacting a real estate agent is next on that list.
Buyers reported taking a median of two weeks as they are searching before contacting an agent. For millennials, the median was three weeks.
Moreover, websites are used throughout the process by 89% of buyers and 93% of millennials. Indeed, 71% of millennials are specifically using phones or tablets to access data during the process.This may not add up to compelling reality television, but it is actual reality.
Since I work for a real estate website, you might expect me to be upset about leaving out our role, but there’s actually one thing that gets me even more worked up about the standard reality TV formula. On TV, our TV camera-ready house hunters look only at the magic number of three houses before finding their perfect place. Every time! In real life, buyers look at a median of 10.
Let me tell you: Three houses just wouldn’t cut it. From my personal experience, I can attest that it is nearly impossible to grasp what is most important to you in a new home, and how to value the various trade-offs, without having real, honest-to-God examples in front of you. And there will be trade-offs: No two homes are alike, and what is available for sale at any given time is typically a subset of the features most buyers think are important.
You might think that being in a specific neighborhood, or having an open floor plan, or having the latest appliances seem most important—but when you actually walk through homes in various conditions, at differing prices, in a mix of locations and styles, suddenly you realize it isn’t so simple. Not even close.
You want reality? Here’s reality: You’d have to be a master of perception to intuit what you and your family truly need after looking at only three homes. And most people today buy a home that they found on the Internet.
But don’t get us wrong: A good Realtor® can be incredibly helpful. In fact, the use of Realtors and their perceived value are at all-time highs. Why? Because the process is complex, and buyers don’t want to make mistakes in what is likely the biggest purchase they’ve ever made.
The real estate agent helps the buyer understand the process, points out unnoticed features or faults with properties, negotiates better sales terms and prices, provides a better list of service providers and mortgage lenders, and both expands and narrows the buyer’s search area.
In other words, it’s not about finding a home. It’s about finding the right home, making a good decision, navigating the entire process, and getting a good deal. And if you’re looking to buy a home, you’ve started in the right place here at realtor.com.
Now pardon me—there’s a “House Hunters” marathon on TV.
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