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A Remote Purchase
...A Consumer's Perspective

Jane Santor of Arlington, Virginia will join a start-up in Mountain View, California next month and needs to buy a home quickly. She's wrapping up current responsibilities and preparing to move but does not have time to travel to California to find a new home.Instead, she begins house hunting on the Internet. Since she doesn't know Silicon Valley very well, she first goes to a real estate channel on the Web where she uses multimedia mapping tools to familiarize herself with the area near her new office.

Research
Jane is less concerned about how far she lives from work than she is with the actual commute.Using her browser, she enters the office address and specifies that she wants no more than a 30minute commute at 7:30 am and 5:30 pm. Almost instantly a free, advertiser supported service displays an interactive map highlighting an area that meets her criteria. She refines the area by overlaying demographic, school, crime, community, and economic statistics. She can redraw the borders and segment the selection area into two or more sections if she wishes. By doing this she limits her search to properties that fall within the chosen selection areas of the map, regardless of other criteria.

She now defines the type of home she wants: price range, bedrooms, bathrooms, age, square feet, lot size, style, etc. Intelligent Agent technology allows her to quickly scan all Web listings that meet her property type and location criteria.Instantly, her "agent" returns with three properties.Two existing homes meet 100% of her criteria and the third, a new home, rates at 78%.

To get a better feel for the neighborhoods of each property, Jane returns to the maps and enters the addresses to see the commute routes and times from each home. She can rotate a 3D topographical representation of the map andview the lay of the land from any angle. She also checks historical weather data (rain, sunshine, temperature, wind, etc.) for each property location. Finally, to see what the neighborhoods actually look like, she views zoomable high-resolution photos of each neighborhood. These show the immediate areas, especially the homes on either side of the selected properties. With this information, she eliminates one of the existing homes and focuses on the other two.

In addition to Web-based property information and 2D photos, she takes a multimedia virtual tour of the existing home, including 360 degree views of the front and back yards. Clicking on the roof brings up data on its age, construction type, and the number of years remaining on the warranty. She also views results of the last home inspection and termite reports, as well as a graphical representation of the last owner's utility usage in the past 12 months.

As Jane manipulates 360 degree panoramas of the interior she hears the listing agent's voice describe the features and benefits of each room.She zooms in for detailed views, and clicks on images of most of the major appliances and systems to examine the specifications and warranty information for each. Last, she takes a few moments to check out panoramas of several of the parks and schools in the area before she goes on to tour the brand new home.

Next, she "walks-through" a 3D model of the new home, and views each room from any point of reference. As she interactively plays with colors,materials, feature add-ons, etc. to design the home as she would want it, the sales price updates instantly to reflect each change.Designing and decorating to her exact taste appeals to her, but she prefers the neighborhood of the existing home and decides to make an offer on that one.

Pre-Offer Preparation - Comps and Loans
First she requests comps of similar homes sold in the area over the last year. Instead of just listing the basic information (square footage,bed/bath, lot size, garage), the Web based "Comp Wizard" interprets the results and suggests a realistic offer price range for the property. She uses another Intelligent Agent to search for the loan that best meets her intended down payment and closing cost criteria. Almost instantly, it returns 3 different loan options, which enable her to compare total pre- and after-tax costs during her expected 5-year ownership of the property.

Loan Approval
She takes 5 minutes to complete an online application for the loan she wants and submits a request for pre-approval. The lender immediately replies that they are processing her request and that her pre-approval (for a loan that meets the down payment, percent of loan-to-value, and acceptable property requirements) will take about 15 minutes.

While awaiting final approval, Jane uses her online Intelligent Agent to find an experienced Buyer's Agent to help negotiate the offer and make sure the transaction closes smoothly. Because she did the work of finding the property and getting pre-approval for the mortgage, she wants an experienced agent who will represent her exclusively but do it for a fee.

While narrowing her search to two agents, her pre-approval comes in. Armed with this, she makes a video call to the assistants of both agents through the Web. The first agent is out showing property and will phone back in the afternoon. The second agent (Sally Walker) will videoconference her later that morning. Jane is impressed with the efficiency, accessibility, and sense of teamwork between Sally and her assistant Lynn. When she and Sally finally connect, she's pleasantly surprised at how much Sally knows about the home in question and impressed with her rich, interactive, and informative Web site.After a brief interview, Jane decides that Sally will represent her during the negotiations and closing process.

Offer and Sale
Jane is ready to make an offer, and Sally directs her to the section of her Web site that has all the necessary contract forms online. After discussing the price and other terms, Sally helps Jane complete an offer form, which includes a clause making the offer contingent upon Jane's physical inspection of the property within 72 hours of acceptance. Jane signs it with her legally binding digital signature and transfers good-faith deposit funds into Sally's broker escrow account.

The entire process of searching for a property, getting pre-approval, and making an offer has taken about 1 hour. Most of the services used were free because of support from advertisers.Now that Sally has taken over, Jane can focus on wrapping things up with her current employer and prepare for her new job. That evening Sally contacts Jane to give her the good news that her offer was accepted. Since the sellers have already moved, Jane can close in just 5 days if she wishes and can track the progress of the closing on the Web. Jane is thrilled and fantasizes about living in her new home as she instructs another Intelligent Agent to find the best flight to San Francisco within the next 24 hours.

While the aforementioned scenario of making an offer contingent upon physical inspection may be atypical, it will be a growing trend. Especially as the immersive, interactive capabilities of the Net mature to offer a more complete home hunting experience while saving the consumer precious time and money. The Net is also changing the way agents, companies, franchises, and service providers work and interact with each other.

Contributing Author
Michael J. Russer
Michael J. Russer, President of RUSSER Communications, is an internationally recognized speaker, writer, and strategic consultant for the real estate industry about the Internet. His 22 years experience in the real estate field include the development of marketing and software systems as CEO for a high-tech mortgage consulting firm he co-founded. Also an authority on Internet risk management, he recently authored the industry's first comprehensive Internet policies and procedures manual for those companies that have agents active on the Net. He can be reached at (805) 882-1170 or mrusser@russer.com.