Online home listings drive drastic change in real estate market
For 20 years, we have been chronicling the developments in the real estate industry in this weekly column. Boy, have times changed!
Twenty years ago, the Internet was unknown to most people. Ilyce signed up for an AOL account (she was within the first 500,000 users or so) just so she could put it in the introduction to the first edition of her first book, "100 Questions Every First-Time Home Buyer Should Ask."
Most people didn't know what a browser was. And remember how poor and oversized (at least by today's standards) cellphones were back in the early 1990s.
If you wanted to know what homes were on the market, you still had to go to a Realtor's office to look at a listing book --(and you weren't allowed to take it anywhere. Realtors held sway over all listing information. If you were a buyer, it was tough to get information from anywhere except a local real estate agent.
Agents still faxed each other the "hot sheet" and advertised in local newspapers. So did mortgage lenders. It was difficult to know where to get good information.
Google's founders wouldn't even start working on what became the behemoth until 1996, and the company was incorporated in 1998. Then, search was born.
It seems appropriate, on the 20th anniversary of this column, to look back at how the real estate industry has changed, for better and for worse. Surely, in the past six years it has been for worse -- at least that's how builders, real estate agents, home sellers, homeowners and mortgage lenders have experienced it.
Here's a quick look at how the world has changed in the past 20 years for home buyers and sellers:
-- BUYING A HOME. Where would we be without the Internet? Back to a paperback book of listings with one black and white photo of the front of the house or building that was published twice a month, viewable only under lock and key in a Realtor's office.
If you went out shopping for a home, you'd certainly see signage in front of a house, but no website, no color photos (let alone digital), no video, no floor plans and no way to search other comparable homes in the neighborhood.
There was no easy way to search school districts, real estate taxes, or the nearest gourmet coffee shop. And there was no way to tell online whether the local municipality had approved a four-lane highway cutting through the backyard of the home on which you were making an offer.
In short, it's a wonder anyone ever bought anything, which leads us to:
-- SELLING A HOME. Twenty years ago, most homes were sold through a full-service agent. Agents typically represented the seller, even though they carted buyers around to showings -- and the buyer thought the agent was working on his or her behalf. Nope. It was only during the mid-1990s that the concept of buyer agency was more fully developed.
Sellers had a tough time listing their home for sale other than through a local multiple listing service. Twenty years ago, there might have been a half-dozen local MLS services, each servicing a different portion of a metro area.
Typically, the MLSs didn't share listing information, which made it difficult for a buyer from the west side of town to buy a home on the east side of town, unless he or she used several different agents. (New York City still sort of works like this, if you're feeling nostalgic for any reason.)
Without listings on the Web, sellers were only able to attract attention through newspaper advertising, the Realtor listing book or signs. Buyers would often drive around neighborhoods, looking for signs that property was for sale.
No question, 20 years ago, real estate was a far less efficient marketplace. You couldn't really check up on prices, neighborhoods or the reputation of a salesperson before you hired them. In fact, it's hard to imagine how anything got sold at all.
Ilyce R. Glink is the author of many books on real estate. She also hosts the "Real Estate Minute," on her YouTube.com/expertrealestatetips channel. Samuel J. Tamkin is a Chicago-based real estate attorney. Contact Glink and Tamkin through her website, www.ThinkGlink.com.