Realty Reality
The recent article in the New York Times authored by Damon Darlin (referenced in my previous posting) contains many statements that are common myths about the real estate process. In my next few entries I will point out those fallacies and hopefully bring to light the "reality of realty."
Myth #1: (Stated in several different ways) "The Internet has radically changed the way consumers buy books and airline tickets, trade stock and learn news." "You can find out more about an Ebay Beanie Baby than you can about a $1 Million house." "Buying a home online is not too different from ordering a book at Amazon.com or a computer at Dell.com."
REALTY REALITY: People are forgetting that an airline ticket, a book, a share of stock, and computers are commodities. That means that there is no real differences among many of them. For example, a plane ticket from Dallas to San Francisco on American Airlines is virtually the same as a plane ticket from Dallas to San Francisco on US Airways, or Southwest, or Delta, or United. 100 shares of Oracle stock is the same whether it is purchased from Etrade or from Morgan Stanley. If you buy a copy of "The Da Vinci Code" from Amazon or Borders, no one would know the difference.
However, a resale 3 bedroom, 2 bath house with a fireplace IS NOT A COMMODITY! One is usually significantly different from the other - even if they are in the same subdivision by the same builder. It takes market knowledge and personal experience to understand the differences in those products. The differences could be in the locations, or in the improvements made by different owners. One may have white carpeting and the other may have hardwood floors. Perhaps one property is in a flood zone and the other is not. One may be in a different school zone than the other. One may have had a fire in it and the other one didn't. One has a kitchen window that faces east into the morning sun, and the other has no kitchen windows at all. It takes an experienced person to have the market knowledge and understanding to know if the values of the properties are valid and in line with the specific differences unique to each house.
Also, if something breaks on the Dell computer you bought on the internet, or Amazon shipped you the wrong book, it is pretty easy to return them for the right things...Try that with the house you bought over the internet. You might then discover why the good real estate professionals get paid what they do.
The internet is a great tool for buyers, sellers, and real estate professionals. It helps everyone get information more quickly and narrow down possible properties for buyers, and exposes sellers' homes to those buyers. However, that does not lower the true costs of a real estate transaction.
Myth #1: (Stated in several different ways) "The Internet has radically changed the way consumers buy books and airline tickets, trade stock and learn news." "You can find out more about an Ebay Beanie Baby than you can about a $1 Million house." "Buying a home online is not too different from ordering a book at Amazon.com or a computer at Dell.com."
REALTY REALITY: People are forgetting that an airline ticket, a book, a share of stock, and computers are commodities. That means that there is no real differences among many of them. For example, a plane ticket from Dallas to San Francisco on American Airlines is virtually the same as a plane ticket from Dallas to San Francisco on US Airways, or Southwest, or Delta, or United. 100 shares of Oracle stock is the same whether it is purchased from Etrade or from Morgan Stanley. If you buy a copy of "The Da Vinci Code" from Amazon or Borders, no one would know the difference.
However, a resale 3 bedroom, 2 bath house with a fireplace IS NOT A COMMODITY! One is usually significantly different from the other - even if they are in the same subdivision by the same builder. It takes market knowledge and personal experience to understand the differences in those products. The differences could be in the locations, or in the improvements made by different owners. One may have white carpeting and the other may have hardwood floors. Perhaps one property is in a flood zone and the other is not. One may be in a different school zone than the other. One may have had a fire in it and the other one didn't. One has a kitchen window that faces east into the morning sun, and the other has no kitchen windows at all. It takes an experienced person to have the market knowledge and understanding to know if the values of the properties are valid and in line with the specific differences unique to each house.
Also, if something breaks on the Dell computer you bought on the internet, or Amazon shipped you the wrong book, it is pretty easy to return them for the right things...Try that with the house you bought over the internet. You might then discover why the good real estate professionals get paid what they do.
The internet is a great tool for buyers, sellers, and real estate professionals. It helps everyone get information more quickly and narrow down possible properties for buyers, and exposes sellers' homes to those buyers. However, that does not lower the true costs of a real estate transaction.
posted by Realty Executives Int'l at 10:04 AM
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