Home Sweet Home: The Virtual Way to Shop for Real Estate

by Richard Seltzer, seltzer@samizdat.com, www.samizdat.com

Copyright 1999 by Richard Seltzer. All rights are reserved.

The following article is based on the introduction from Shop Online the Lazy Way, a book written by Richard Seltzer, which was published in August 1999 by Macmillan. It is available in paperback directly from our online store at http://store.yahoo.com/samizdat or from Amazon.com. It is also available in a Braille edition from National Braille Press (www.nbp.org).

Now that the rights have reverted to the author, he is free to update and revise this online version. Please send email to alert him of changes and interesting new sites that you have encountered.

Real estate is a complicated matching game. A limited number of unique properties (age, size, number of rooms, neighborhood, etc.) are to be matched with unique families (number of people, their ages, backgrounds, needs, tastes, etc.). This matching arrangement is different from shopping for new books or music, where thousands or even millions of identical copies of each item may be available, and you just have to decide which title you want. It's also very different from buying a new car, where you can decide which model you want, put together a unique combination of options and colors, and have one made for you. Yes, you can build your own house, but the design, the materials, and the options do not define the property. The lot it sits on, the immediate surroundings, the neighbors, the community with its roads, traffic, schools, taxes, and crime rate, all make an enormous difference in your satisfaction as well as in the property's value.

You aren't going to go through the whole real estate shopping process lying in bed with our laptop. You will want to see the property and its neighborhood setting in person, not just online, before you make a decision. And you or your representative needs to be physically present to go through the legalities of closing. But whether you are looking for a roommate, an apartment, or a house, the Web is a way to:

The Internet gives you more information and a wider range of choices than you've ever had before. If you've bought homes in the past, you'll be delighted at how easily the Web will allow you to go through the traditional steps of picking a neighborhood, a real estate professional, a house, and a mortgage. But don't let your familiarity with the traditional process blind you to the new opportunities that the Internet has opened. The Internet is having a major impact on the real estate industry by opening new business models that give both buyer/renter and seller/landlord far more choices at lower cost. Keep in mind that the rules of the game are changing even while you are playing. Innovative companies are pioneering new territory. You ought to check out what they have to offer (in particular, buyers agents, a wide range of for-a-fee services, and easier access to homes and apartments for sale and rent by the owner). The Internet lets you do more of the legwork yourself; and if you take advantage of the new business models, you can save considerably on transaction fees and commissions while still getting the professional help you want and need.

Getting started -- buy or rent or find a roommate

One of the first steps in shopping for real estate is to determine what you can afford, which may not be immediately apparent to you. Your desires may well exceed the limitations of your income. So use the Web to check the prices of available properties in the areas where you want/need to live, and to learn about bank lending rules and interest rates, and about all the other costs beyond the simple price: agent fees, deposits, taxes, closing costs, moving costs, etc. You may decide to rent a house rather than to buy one, or to rent an apartment, or to look for roommates to share the cost of rental.

At this preliminary stage, the Internet's "do-it-all" real estate sites can be very valuable. Such sites have assembled a wide variety of information and tools to help you better understand what you want and how realistic your expectations are, and to help you get a feel for the overall process of buying or renting. In addition, they provide listings of available properties and links to realtors and other businesses that can help you. However, be skeptical of the listings and business referrals. Because they are national services, the listings they have in your area today are likely to be sparse. There's a lot more property available, and a lot more of it listed online than you will find at these national sites. Don't be dazzled by fancy calculators and decision-support tools. They often mask incomplete and sparsely populated databases. If you can browse and search the whole set of listings and can also navigate through the same information calculator-style, that's great. If not, beware. The results you get may be misleading, and perhaps might be pointing you not toward the best selection for you out of the range of all that's possible, but rather toward only those that have submitted information here or paid to be included.

And the businesses (mortgage companies, movers, etc.) that these real estate sites refer you to will, for the most part, have paid fees for inclusion. So when you use an online tool to calculate the likely cost of a mortgage and see a list of rates and terms from particular lenders, remember that you are only seeing part of the picture. You have more choices than these sites would lead you to believe, including the option of dealing with real estate professionals who provide a[ag] la carte services for fixed fees, rather than working on a percentage.

Don't get me wrong. This is good stuff. You need this kind of help to get oriented. Just consider these sites as starting points, not the complete real estate supermarkets that they present themselves to be.

Let's take a closer look at one of these sites to get a better idea of what to expect and what to watch out for.

Microsoft's HomeAdvisor is organized around the usual steps involved in buying a house: getting started, neighborhoods, homes for sale, financing, and offer and closing. "Getting Started" guides you through the basic decisions. You should go through all these calculator exercises, and probably more than once. The different steps are interrelated; for instance, what you learn from the second or third step might affect what you'd want to enter as your preferences in the first. (Please note, however, that this site is a Microsoft site. If you use a Netscape browser, your back button probably won't work, and other features may not work. It sometimes crashes my system.)

The results in HomeAdvisor's "Neighborhoods" section don't match my experience and perceptions of neighborhoods around Boston, and the language used to characterize them strikes me as offensive and not particularly helpful: "Established Empty Nesters," "Upscale Blue-Collar Families," "Elite Ex-Urban Families," "Sophisticated Urban Fringe Couples," etc. The demographic information comes from Claritas, a company that gathers consumer spending and lifestyle data and correlates it with zip codes. Claritas markets its data to companies that are interested in identifying the optimum places to locate stores or those wanting to do targeted advertising campaigns. This marketing data approach does not at all seem appropriate in a home-buying context, where gross averages across an entire zip code are not particularly useful. A true housing neighborhood may be defined by a few blocks, and the territory of a zip code could include dozens of very diverse neighborhoods. In your home search, you are likely to find this kind of quite statistical pigeonholing more harmful than helpful.

The HomeAdvisor's "Home Finder" features are complex and time-consuming to use, not allowing you to browse or search, insisting that you fill out forms, which seems to mask how sparse their listings are. As their listings grow, so will the usefulness of this tool. For now, even with the broadest of criteria, I could find no listings at all in the zip code where I live (the West Roxbury area of Boston). In fact, HomeAdvisor found zero homes within five miles of where I live.

"Find a Loan" takes you through a lengthy set of questions, but then only provides you with loan information from three national mortgage companies. The questions here, and in the other sections, are very helpful at making you aware of what criteria are important, and where you may fit in the general scheme of things. But don't stop your search here. You are likely to get a better deal with a local bank that understands the neighborhood.

If you are new to real estate shopping, check all the sites listed above in this section. There's some overlap, because they partner with some of the same companies, and because they are all trying to capture your full attention for anything and everything to do with real estate. But the insights you can gain by going through all their exercises and reading their articles are well worth the time. Just don't expect too much of any one or all of them. They can be very helpful in pointing out the kinds of things you need to know. Then you can go elsewhere to get the listings and other resources you need.

Also, keep in mind that finding a mortgage is an important part of shopping for a house. You should get preapproved before engaging the help of real estate professionals. You can do that online at mortgage sites linked to by the do-it-all sites. You should also check Priceline (www.priceline.com), Mortgage Auction (www.mortgageauction.com), and E-Loan (www.eloan.com) and mortgage lenders mentioned in Chapter 8, which deals with shopping for money.

Shopping the traditional way, with classifieds

Back in ancient times, before the dawn of the Web, your first step in finding a house, an apartment, or a roommate would probably have been to check the classified ads. That tradition is continued today at numerous online classified ad sites. Many of these sites simply move ad copy verbatim from printed newspapers to electronic form. Others follow old newspaper categories and format because users are already familiar with them, or just out of habit and inertia. Some even keep the cryptic newspaper-style abbreviations, despite the fact that on the Web, space is not limited the way it is in print. Nevertheless, these sites can be very useful. The nationwide sites typically have tens of thousands of listings, and they provide sort and search capabilities so you can limit your search to the geography you want and then quickly pluck out those listings that match your requirements. The problem is that these classified listings are likely to be unevenly distributed, with rich resources from one urban area where they have partnered with major newspapers, and very little in another. To get more listings in your geographic area, check the real estate and classified Web sites that focus on it.

To find those, first check the Web sites of the local newspapers, then check the Yahoo directory which has a section devoted to classifieds http://classifieds.yahoo.com/. For example, in the Boston area:

While the nationwide sites list a couple hundred homes for sale in the Boston area, Boston.com lists a few thousand. These are all homes that were advertised within the last 7[nd]14 days in the print newspaper, but all in the same brief cryptic form that is typical of newspaper classifieds. That form provides limited information and makes searching awkward.

Roommate matching services

The Internet features a few roommate services with listings nationwide or even worldwide. Even if you don't want to check these listings, you might want to look at their advice and links to related services.

·Roommate Access www.roommateaccess.com: nationwide, but strongest in New York City and Boston.

For roommates, it makes more sense to check local sites rather than nationwide. Local sites typically provide a range of services--not just classified listings--and may charge fees for them. The services might include screening, advice, and opportunities to meet potential roommates at face-to-face events. Most urban areas in the United States should have at least a few. The problem is that these are not easy to find. Look for links from general commercial sites that serve your geographic area, such as local newspaper sites. Here are a few of the more prominent ones:

·Roommate Finders www.roommatefinders.com: Serving Manhattan, this site currently charges a $250 agency fee. They also have a "turkey file" of roommates blacklisted because of previous behavior.

·Roommate Express www.e-roommate.com: This site serves just the West Coast.

·Roommate Matchers www.roommatematchers.com: Serving the greater Los Angeles area, this site currently charges $49 membership fee.

·Roommate Connection www.dwellingsma.com/roommate.com: This roommate site serves the Boston area only and currently charges a $75 fee.

·Matching Roommates www.matchingroommates.com: This site is also a matching service for the greater Boston area.

Rentals

While large national sites portray themselves as one-stop-shopping places, when it comes to real estates, bigger is not necessarily better. The odds of your finding just what you want at such a site are quite small. Keep in mind that those listings are spread across the whole country. For instance, AllApartments (www.allapartments.com) boasts over 5 million apartments listed, but I couldn't find any there for West Roxbury (the section of Boston where I live) and only 18 for all of Boston. That's typical of results at the other nationwide sites. But try them anyway; you'll get a quick feel for the variables and for what's possible. In addition, you'll see advice and related useful links. Other renters sites, in addition to AllApartments, include: As with those for roommates, you are likely to see far greater selection in the rental sites dedicated to your local area. Try these sites, for example: For a collection of other such sites, go to About.com (www.about.com/realestate) and click on Apartments for Rent or on your metropolitan area.

Homework that really pays -- using the Web to buy a home

If you have decided to buy a home, you want to find the right one, with the minimum of hassle and wasted time. You want to negotiate a good price and close the deal. You also want guidance to make sure you have touched all the bases and taken care of all the related matters--and done it well--in this very complex transaction, involving laws and regulations that you are probably unfamiliar with.

You can expect to go through two stages. First, you need to educate yourself about potential neighborhoods, the range of choices, the process, and particular houses. The Web can provide lots of information and advice so you can avoid the hard-sell tactics, the time-consuming contact, and the persuasive skills of a realtor, until you are ready. When you are ready, you can then contact a traditional realtor, or a buyer's agent, or a company that offers a menu of real estate services for a fee. Then they can guide you the rest of the way, and perhaps even help you with the negotiation and related matters.

This isn't a macho exercise. You don't have to show off how much you think you know about buying a house. Let's face it--most people buy houses rarely, and mistakes can prove costly. Unless you've worked in the business, you aren't likely to be an expert. That means just about everyone needs some help and hand-holding from people who really know.

Even if, armed with everything you can learn on the Web, you decide to buy directly from a homeowner, you'd still be well advised to get some paid professional help along the way.

Both the Web research and the personal professional help are particularly important if:

Often you have to deal with both those circumstances at the same time.

With the right research on the Web, you can make good use of your time during your brief and expensive trips to the new city. By narrowing your choices before you arrive, you can cut down the number of houses you have to visit personally, and greatly reduce the time to purchase.

And while we won't deal directly with selling your home, you can use many of these same sites and services to help you with that as well.

Basically, if you use the Web effectively, you can expect more from the traditional players, like realtors. Knowing that you are ready, well-informed, and motivated, real estate professionals can and should take you more seriously and give you more attention and help, knowing that you are ready and prepared. Whether you are a buyer or a seller, if the first realtor you pick doesn't treat you that way, then go to another.

Research and then more research

Although there are brand name realtors, there are no brand name houses. Hence there are no reference books listing all the choices. Each property is unique. Even condominiums in the same building are on different floors or have different views, and cookie-cutter houses in a development have different physical locations. And over time, owners make improvements and cause damage and wear, so the older the property, the more unique it is likely to be. At the same time, the actual purchase of a house is just one step in a whole complex network of related activities---from getting a mortgage and insurance to moving, and furnishing and then making changes to the property to suit your tastes.

So while you would like to get as much information as you can about a particular property, you also need to familiarize yourself with a wide range of subjects. And for all these subjects there are dozens, if not hundreds, of Web sites that can help you.

After you've checked the do-it-all sites listed above, check some of these advice sites:

Advice for buyers and sellers

If you want to do in-depth research on a neighborhood or specific property, first check the "Home Values" section at Yahoo Real Estate (realestate.yahoo.com/realestate/homevalues). There you can search by location to find all homes that have sold on a particular street since 1987, or the sales history of a specific address. You can also search by price to find all homes sold within a certain price range in one city. You can also sign up (for free) to get automatic e-mail notification when a house sells in a particular neighborhood. Yahoo draws this information from a database of 20 million U.S. home purchase price records, updated weekly, with info typically available six weeks after the close of sale.

Other resources for in-depth research include:

Other sites provide resources intended for people building their own home or buying new, or for sale by owner, both of which present their own unique challenges and opportunities.

Building your own home and buying new

If you decide to explore the realm of newly built houses or perhaps even have one built to order, beware of builders that offer to do everything for you--arranging for mortgage money, doing the appraisal, and even setting you up with property insurance. They could get profit from each of those operations at your expense. Proceed with caution and do your own research into those matters.

Homes for sale by owner

If you are interested in buying a house directly from the owner or selling a house yourself, first check the article by Pat Rioux, "What's New in Discount Listing Services for FOR SALE BY OWNERS," at the International Real Estate Digest site www.ired.com/buymyself/rioux/fsbo, and check related the state-by-state directory of resources www.ired.com/dir/fsbo.htm.

Also check the following sites:

Links to Just about Everything Having to Do with Real Estate This is where you are likely to find links to Web sites dedicated to the geographic area where you want to move.

Realtors and buyers agents -- when you are ready for the real thing

When you have done enough research and have a clear idea of what home you might want to buy and what you are going to have to do to get it, then it's time to turn to a local realtor or buyer's agent.

Traditional Listing Agents

Many sites, including the do-it-all ones, provide search tools for finding realtors. I'd recommend using the International Real Estate Digest (www.ired.com). This site doesn't list every realtor in the country, but it does provide quality ratings those it does list and indicates the range of their services. And it includes just about everyone that has a Web site. These realtors are the ones you can check out online and learn about before spending the time and effort to call or visit them. They are likely to provide, online, complete descriptions, costs, photos, and floor plans of the houses they list. Some may even offer online video tours of some homes.

Other realtor sites to keep in mind include:

Nationwide (US) Realtor Referral Sites

Nationwide Chains Selected Regional and Local Realtors Buyers Agents

Legalities vary from state to state, but most realtors are "listing agents" who represent the seller, while buyer's agents represents the buyer. Ask your realtor/agent to clarify his or her role and responsibilities.

Buyer's agents, like traditional realtors, have access to the Multiple Listing Service (MLS) to help you find homes in your target geography.

Do you pay more for a buyer's agent? Perhaps, but perhaps not. For instance, some for sale -by owner sites don't offer any commission at all. In that case, the buyer working with an agent may end up paying the fee to the agent. But with a professional on your side, you are more likely actually get the property you want and to negotiate a lower price and other terms favorable to you. Then again, if negotiation is all you want, you could consider someone who specializes in that on a fee-for-service basis.

In the typical case, the price of the house has a commission of about 5- percent built in, which is split 50[nd]50 between either the listing agent and the realtor, or between the listing agent and the buyer's agent. The listing agent is the one who gets the information from the seller for inclusion in the Multiple Listing Service, puts the "for sale" sign in the front yard, and acts as the seller's coach through the whole process.

Some agents purport to represent both the buyer and the seller--an obvious conflict of interest. Make sure you understand your agent's role and if the agent will receive any payments from the seller or other players in the process (such as a recommended mortgage lender).

Also, keep in mind that if you deal with a large brokerage company, you might run into an instance of "competing buyers," where the buyer's agent company might represent more than one individual interested in buying the same property.

To find buyer's agents in your area and to learn more about the role of a buyer's agent, check:

New business models: choose from a "menu of services"

Considering the way the Web is changing the real estate sales business, one would expect a greater variety of sales-related services to be available from new kinds of businesses at costs far less than the standard 6 percent sales commission. That is happening, and happening fast.

Basically, the Internet enables both the buyer and seller to do much more of the work themselves, and new businesses are experimenting with ways to provide buyers and sellers better services at far less than the traditional cost.

Today's fee-for-services companies charge less if the seller or the buyer takes more responsibility. The resources available on the Internet make it much easier for you to do just that. The services and their cost may vary widely. And there are also new services--beyond what traditional real estate professionals normally do--to make it easier for you to cope with the myriad of activities related to home buying and owning. Picking from a menu, you choose and pay for only what you need. Read the promotional material carefully. Make sure you know what you will pay, what you should get for it, and what your role will be. The savings could be considerable--perhaps as much as $5,000[nd]$10,000 for an average house in a major metropolitan area--but only if you play the active role that is expected of you.

Note that the new fixed-fee seller services make it far easier for homeowners to sell their own property. You don't have to be a pioneer do-it-yourselfer anymore. There are companies that can help you in the ways that you want to be helped, at far less cost than a full-service realtor.

Today there is no professional organization or central site from which you can readily search for all fee-for-services companies. For starters, check your state in the United States real estate list at the International Real Estate Digest (www.ired.com/usa). Then check your state in the list of buyer's agents www.ired.com/dir/trueagnt.htm. As examples of what's possible, consider the following sites, which serve local communities:

Seller services for a fee

Sidebars for this chapter

When you search at a real estate site and you find a house that looks interesting, try to find that same house listed at other sites as well. Some sites will provide more info than others on the same property. Some might even have pictures.

At major real estate sites, you can spend a lot of time filling out a detailed and complex form only to find that that particular site has no listings matching your needs and preferences. It's best to start very broad both with regard to location and to what you would like. Then if you are fortunate and there are many listings, get more specific.

If you believe in the ancient Chinese theory of site location, before you pick a house or a lot on which to build a house, check The Feng Shui Directory and Magazine www.fengshuidirectory.com and other related resources listed at www.ired.com/dir/fengshui.htm.

Want to see where these houses and apartments are? Want driving directions? Go to MapQuest (www.mapquest.com). Then click on "maps" or "driving directions" and enter the address. Print out the results. It's free.

If you haven't found exactly what you want to the real estate sites, go to AltaVista (www.altavista.com) and search for "home* for sale". Also search for "home* for sale" +"by owner."

For even more listings, check the newsgroups. At Deja.com www.deja.com, search for phrases like "real estate," "apartment," "roommate wanted," or "for sale by owner." Also, click on Browse Groups and then on Regional to find newsgroups dedicated to your state or region.

Are you a student looking for off-campus housing, and perhaps roommates as well? A Break 4 Students www.abreak4students.com has listings of rentals near universities and is geared for the needs of students.

Want to venture into the wilds of Internet newsgroups? The "regional" listing at Deja.com www.deja.com is a bit misleading, encouraging you to just click on a state. If you are interested in New England, enter ne.housing in the Deja search window. For the San Francisco Bay Area, enter ba.market.housing in Deja' search window.

Looking for a retirement home, a vacation rental, or a timeshare? Go to LookSmart (www.looksmart.com). Click on Home & Family, then Real Estate, then Vacation & Specialty.

If you are relocating, you should check Virtual Relocation.com www.virtualrelocation.com , which bills itself as a "moving and relocation mega-site." It has gathered in one place all the resources you are likely to need.

If price is very important, consider buying a foreclosure. Foreclosure World (www.foreclosureworld.net) acts as a multiple listing service for foreclosures and has over 30,000 listings nationwide. It charges a one-time flat fee (now $368), e-mails you details on all foreclosures in your area, and provides a consultant to help you through the process. You pay no broker's fee.

Are you really interested in that house? Want to know who the neighbors are and maybe give one or more call? Go to AnyWho www.anywho.com and enter the street name and the zip code. In the query result, you'll get the names, addresses, and phone numbers of everyone on that street.

Did you buy a fixer-upper? Or do you want to turn a house that's almost what you want into your dreamhouse? For remodeling, repairing, gardening, landscaping, and furnishing, go to LookSmart www.looksmart.com. Then click on Home & Family, and House & Garden. Follow those links, and you'll find enough ideas and resources to keep you busy for the rest of your life.

Looking for a unique vacation home, perhaps outside the United States? At AltaVista www.altavista.com, click on Usenet, and search for "real estate." Then add other query terms to focus your search. You'll find intriguing listings of property for sale in such unexpected newsgroups as rec.travel.africa and rec.nude.

Looking for luxury? Even if you can't afford it, check it out The duPont Registry of Luxury Homes www.dupontregistry.com and Who's Who in Luxury Real Estate www.luxury-realestate.com.

If you aren't in a hurry and you have a particular dream image of a house in mind, make your own Web page (as described at the end of Chapter 3). Describe your dream house in detail, and ask people to email you if they know of a house like that for sale.

Dreaming about not just a house, but a lifestyle? Check out what you could get in a "private, gated or master-planned community" at www.registryone.com.

According to a study by McKinsey & Co., restructuring in the real estate industry could lead to savings of $30 billion a year, and a good chunk of that savings could go to buyers and sellers. If you want to keep track of real estate trends and locate innovators, check Inman New Features www.inman.com for real estate news.

A new Internet standard (XML) for marking up the text of Web pages should make it easy for buyers to search through real estate listings from any online source around the country-- one search and you'll see them all, instead of having to search through one site after another. The standard and the technology are in place, but it will take a few years for this to be implemented. For details on this developing standard, see www.4thworldtele.com

For more resources, check the Real Estate section of our Online Shopping Directory www.samizdat.com/shopping2.html#real

The rest of the book (Shop Online the Lazy Way):

Part One covers aspects of online shopping that apply no matter what you want to buy.

Part 2 covers special cases, where there are major differences in how you shop based on the kinds of things you are looking for:

This site is Published by B&R Samizdat Express, 33 Gould St., West Roxbury, MA 02132. (617) 469-2269. seltzer@samizdat.com

Please visit our online store at http://store.yahoo.com/samizdat

You may also want to check Richard's Online Shopping Directory www.samizdat.com/shopping.html, which has links to all the sites mentioned in the entire book, plus sites he has learned of since the book went into production.

My Internet: a Personal View of Internet Business Opportunities by Richard Seltzer, on CD, includes four books, 162 articles, and 49 newsletter issues that will inspire you and provide the practical information you need to build your own personal Web site or Internet-based business, helping you to become a player in this new business environment.

Web Business Boot Camp: Hands-on Internet lessons for manager, entrepreneurs, and professionals by Richard Seltzer (Wiley, 2002). No-nonsense guide targets activities that anyone can perform to achieve online business success. Reviews.

A library for the price of a book.

This site is Published by B&R Samizdat Express, 33 Gould St., West Roxbury, MA 02132. (617) 469-2269. seltzer@samizdat.com

Return to B&R Samizdat Express

<
Internet Business Showcase: