Sell Your House, Save Money, Find a Florida Home Loan Online
The Florida home loan world is changing. Thanks to the Internet, there’s been a shifting in the balance of power in the real estate industry, providing home buyers and sellers with more control over the deal than ever before and fueling competition among agents.
Gone are the days when Florida real estate agents could guard the information in their Multiple Listing Service. Now, buyers and sellers can see all the homes for sale on 800 regional multiple listing services on the Web.
They can see thousands of newly built homes for sale and apartments for rent nationwide. They can view aerial photos of homes and neighborhoods. They can get appraisals or see how much the house down the block fetched. They can shop for Florida home loans and compare mortgage rates.
It’s all clicks of the mouse away - and 100% cost-free.
“The Internet has done what no consumer advocate could ever do: It has reduced the distance between the consumer and the real estate expert to the point where the consumer is so much more informed, they don’t need the expert as much as they used to,” says Art Raby, an agent for McColly Real Estate in Valparaiso, Ind.
In 1995, just 2% of home buyers used the Internet to look for a home. Last year, 77% of home shoppers went house-hunting online - and nearly one-fourth of buyers first found the property they bought on the Internet, according to the National Association of Realtors. Traffic on real estate websites jumped 8% in the past year, double the growth rate of Internet traffic overall, according to comScore Media Metrix.
The Florida home loan market: A turning, pivotal point
The rising dominance of the Internet comes at a pivotal point in the Florida real estate market. After a five-year feeding frenzy, home sales are expected to drop at least 6% this year. Some sellers are already chopping their prices from last year’s record levels. Home buyers and sellers, meanwhile, are seeking new ways to save money … and they’re finding them on the Internet.
Armed with more information, sellers are bargaining down agents’ commissions and buyers are asking for rebates on their Florida home loans. Some are even cutting out the agent altogether, forging online deals directly. These factors have pushed commissions to an average of 5.1%, down from the long-standing 6%, according to Real Trends, a real estate newsletter.
“I haven’t found that the Realtor does much more than I end up doing myself in terms of checking out a house first,” says Todd Tierney, a 41-year-old architect who bought a home in Boston using ZipRealty.
How a Florida real estate agent can help
Make no mistake: There’s no shortage of buyers and sellers grateful that they used a traditional real estate agent even though they paid full price for the privilege. For most Americans, after all, a home is the most expensive purchase they’ll ever make. It’s complex.
In fact, 81% of home buyers who used the Internet to look for a home also used a real estate agent. And last year, only 13% of homes were sold directly by the owner, without an agent (down from 19% in 1991), in part because the documentation is more onerous now, according to the NAR.
Many agents now resort to paying for leads (contact information for potential buyers or sellers) gathered by Internet sites like HouseValues.com, RealEstate.com and e-Agent. Sites such as HomeGain.com even take a piece of the broker’s commission once the deal closes.
The gravest threat of all to Realtors is probably the rise of discount Florida home loan brokers, who dangle rebates, or charge low flat fees or reduced commissions. Realtors have helped persuade about a dozen states to pass laws limiting the ability of real estate agents to give rebates to home buyers or to offer a la carte services at low prices to home sellers.
State regulators say their laws are designed to protect home sellers who don’t understand the potential hazards of hiring a limited-service agent. Some brokers, for example, will charge a flat $295 to put a seller’s house on the Multiple Listing Service, but they won’t provide any other support in closing the deal, such as complying with lead-based paint disclosures or ensuring that advertising meets fair housing laws.
“Apparently, there have been a lot of situations where the seller was trying to save as much money as possible but somewhere in the process got in over their heads,” says Craig Cheatham, chief executive for the Association of Real Estate License Law Officials, which represents state real estate regulators.
Future for Florida real estate agents
There are plenty of experts, such as Steven Levitt, economics professor at the University of Chicago, who think the Internet is fast eroding the value of traditional real estate agents.
“What does a real estate agent do for a homeowner?” Levitt says. “One is the actual labor of showing the house, but you wouldn’t actually pay that much money to show a home. What you’re actually paying for is knowledge of how the real estate industry works - what your property is worth and the state of the market - and finding you buyers, because you have to have an agent to list on the MLS.”
The Internet lets home buyers and sellers do almost all of that themselves. And that means there will be less need for traditional real estate agents, says Levitt, co-author of the best-seller Freakonomics: A Rogue Economist Explores the Hidden Side of Everything.
Should you eschew the use of an agent and look for a Florida home loan deal yourself? It’s worth a try. As prices/values drop, this is a viable way to save money on your transaction.
