USA Today Article - "Home shoppers do their hunting online"

On Friday, February 9th, the Money section of USA Today ran a story by Noelle Knox regarding how the internet has changed how people buy and sell real estate. It featured a couple who had purchased a home over the internet without ever seeing the home or even visiting the city where it is. Below are the headings of my response. For the full version of my reply scroll down.

• The MLS system is NOT exclusionary.


• The abundance of real estate information on the internet does NOT reduce the true costs of a real estate transaction.


• Buying real estate on the Internet is NOT like buying books, airline tickets, stocks or computers online.

Dear Ms. Knox,

I enjoyed your article (“Home shoppers do their hunting online” Feb. 9, 2007) today about the couple that bought their home sight-unseen over the Internet. I believe that they are the exception to the rule and will continue to be. Here are a few points regarding the real estate industry that seem to get overlooked when discussing this topic.


· The MLS system is NOT exclusionary.

The MLS system is open to everyone who pays the fees and plays by the rules, just like the New York Stock Exchange. The MLS was created in the 1950s to bring order to a chaotic market where buyers had to call or visit every single real estate office in the area to find out what was for sale. The MLS motivates Realtors to publicize their sellers’ properties to the world because they know they will get paid if the transaction is successful. This benefits buyers by creating an orderly marketplace where they can view everything for sale.

· The abundance of real estate information on the Internet does NOT reduce the true costs of a real estate transaction.

The truth is that real estate commissions will never be lower unless the most of the customers want to do most of the processes of the transaction themselves (research tells us that they don’t), real estate offices and personnel are not needed (research and experience of new models say they are), and most importantly, buyers and sellers of real estate take full responsibility for their own non-disclosures, mistakes, forgetfulness and changes of mind. In my 30 years of experience, it is this last point that creates the largest costs of real estate transactions.

· Buying real estate on the Internet is NOT like buying books, airline tickets, stocks or computers online.

Those items are commodities: a plane ticket from Dallas to San Francisco on American Airlines is virtually the same as one on US Airways. One hundred shares of Oracle stock is the same whether it is purchased through Etrade or Morgan Stanley. 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. Also, if something breaks on the Dell computer you bought online, it is pretty easy to return it and get it fixed. 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.