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The Honolulu Advertiser
Posted on: Sunday, March 5, 2006

Today, house hunt starts with a click

By ALLISON LINN
Associated Press

Megan McGrath Glouner takes photos at the home of her client, Molly Bolanos, who also uses the Internet in her search for a new home.

KEVIN P. CASEY | Associated Press

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SEATTLE — Years ago, Molly Bolanos looked for a home the old-fashioned way: She spent hours driving around in her real estate agent's car, hoping for the best and girding for the worst.

One recent morning, though, the process went like this: Bolanos and her fiance were alerted to a new online listing, checked out the pictures on the Internet, then drove over for a real-life look. Within hours, they were preparing an offer.

"It can be 24 hours — as quick as 24 hours that you're out making the offer — and it's because of the Internet," the Seattle resident said.

Add real estate to the list of industries being forever changed by the Internet.

Home listings — once printed out in books available only to real estate agents — are obtainable to everyone online, accompanied by increasingly sophisticated photographs and virtual tours. Now, a growing number of online services are also cropping up to help people do things like judge house prices, survey neighborhoods and evaluate school districts, long before they ever snap the seat belt in their agents' cars.

With the nation's housing boom expected to cool in some areas, experts say such offerings will only increase. And, since consumers have more power than ever to do alone what real estate agents traditionally helped with, agents' commissions could be driven down even further.

"The full impact of the Internet has not been realized, primarily because business has been going up each year," said Steve Murray, editor of the trade magazine Real Trends in Littleton, Colo.

Already, the industry is dramatically different than it was a decade ago. Besides viewing listings online, Bolanos now regularly visits Zillow.com, a new Web site that provides quick, anonymous estimates of home values based on county records and other data. Although the site, which is in test form, isn't always completely accurate, Bolanos said it gives her a good barometer for judging a home's worth.

Less than a month old, the advertising-supported site has already become fodder for office gossip and dinner party chatter, in part because it gives people a voyeuristic look at what their friends and neighbors might be able to get for their homes.

The company's chief executive, Rich Barton, said his goal is to give people the information that can improve their position when they sit down with a real estate agent or consider bidding on a house.

"My motivation, I guess, is kind of power to the people," Barton said.

Other real-estate related Web sites, such as HomePages.com, use interactive maps and other tools to provide information about neighborhoods, schools, local parks and even nightclubs surrounding a particular home.

Ian Morris, chief executive of HouseValues Inc., which runs the HomePages site, said his business aims to reduce the time people spend house hunting. But the company — which makes its money in part from real estate agents — stresses that he still thinks buying a home is complicated and valuable enough to require a Realtor's assistance.

"This is a professionally assisted transaction," Morris said. "One hundred years from now, I expect this will be a professionally assisted transaction."

Still, to survive in a world where consumers have more power via the Internet, many in the industry say agents are being forced to adopt new skills.

David Morrell, an agent in Santa Cruz, Calif., said he now has every house he lists professionally photographed for the Internet postings. When he sees an online listing that has been up for several days without pictures, he said, "It's unbelievable to me."

Real estate agents also may find the value of their service dropping, as people begin doing more legwork on their own over the Internet.

Murray's figures show that the average commission paid to real estate agents dropped from 6.1 percent of a home's price in 1991 to 5.1 percent in 2003, the most recent data available. That was mainly driven by the sharp increase in the number of agents vying for business during the booming market, he said. But in a cooler market, he expects the Internet to be among the factors that will drive those commissions down further.