January 24, 2006

According to new numbers from the National Association of Realtors (NAR) 90 percent of home buyers still use a real estate agent to acquire a home.

However, use of the Internet to search for a house has risen dramatically over the past several years, literally transforming the way the real estate industry does business.

The NAR study reveals that use of the Internet to search for a home increased from only 2 percent of buyers in 1995 to 77 percent in 2005. It now ranks as the number one most-used aid.

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The next most-mentioned source of information for home seekers was the yard sign, mentioned by 71% of buyers.

When asked where they first learned about the home they purchased, 36% said from a real estate agent — 24% of buyers identified the Internet, up from 15% in 2004 and only 2% in 1997.

Does this mean that realtors, in a classic middle-man position, are about to become disintermediated? Apparently not.

In fact, the industry is embracing new Internet technology.

"The real estate industry today bears little resemblance to the way we did business ten years ago.

It is hard to find another industry that has adopted technology so readily to its customers," said NAR President, Thomas Stevens.

"Realtors have invested a lot of time and money in building information technology, and because of these efforts, more consumers than ever are using the Internet in their home search."

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If you wonder why, Mr. Stevens explains, "Buyers who use the Internet in searching for a home are more likely to use a real estate agent than non-Internet users."

The survey showed that 81% of buyers who use the Internet to search for a home purchase through a real estate agent, while only 63% of non-Internet users buy through an agent — they are more likely to purchase directly from a builder or an owner they knew in advance of the transaction.

Realtor.com was the most popular Internet resource, used by 54% of buyers, followed by multiple listing service (MLS) Web sites at 50% and real estate company sites at 38% and real estate agent Web sites at 31%.

Source: eMarketer