“Nearly half of recent home buyers begin their search online, and over half find the homes they purchased on real estate websites,” said Stephen Brobeck, senior fellow at the Consumer Policy Center, who has studied the real estate market for three decades.
These services are hard to beat if you’re trying to quickly learn about the market in a particular area, but they often don’t tell the full story. It’s important for buyers to understand what each platform can and can’t tell them about available homes — and what they might gain by logging off and shopping in the real world.
Brobeck just released a report on the four largest real estate search services: Zillow, Realtor.com, Redfin, and Homes.com. I asked him by email what he learned and what advice he gives to house hunters.
Question: What did your study find?
Answer: I examined 21 communities around the country, including Cohasset and Watertown in Massachusetts. I found that each of the big four portals listed a large majority of properties for sale in those communities. That’s because they get their listing from the same local and regional multiple listing services.
Q: So does it matter which service you use?
A: It does. There are differences in the properties listed. For example, only Redfin includes “Early Access” listings by Compass and affiliated companies, including Coldwell Banker, Sotheby’s, and Christies. Redfin reported recently that 64 of 2,215 total Boston listings were in this category. However, if these homes don’t sell within several weeks, they will usually be made available to and listed by the other three portals.
Q: Do Redfin’s competitors also offer exclusive access to certain properties?
A: I found no evidence of this in our sample, but non-Compass firms have established relationships with other portals that may eventually result in exclusive listings.
Q: Are there other differences among the portals?
A: Yes. Realtor.com, for instance, prominently lists properties under contract — those termed “contingent” or “pending.” Nearly 15 percent of these properties never close, so end up being available to other buyers.
A key statistic is “days on market,” or DOM. A home with a high DOM may be overpriced, and the owner may be willing to accept a lower offer. Yet, keep in mind that sometimes when a home is repriced, a portal may start a new DOM at day one. So, check the DOM of a property, especially those with a low number, on the other portals.
Also, “Coming Soon” listings by Compass and affiliates usually do not include a DOM or a price history. When considering such a property, buyers should insist that the seller provide this information.
Q: Zillow and Realtor.com have “contact agent” buttons. What should buyers know about these?
A: Both portals generate revenue by helping buyers find an agent, then taking 30-40 percent of the agent’s commission. Zillow informs users that the contact is with a buyer agent but Realtor.com does not, and a buyer may assume they are contacting the property’s listing agent.
Q: How do the portals calculate their property value estimates and are they accurate?
A: They are computed by complicated algorithms based on factors such as past sales and current market conditions. If a home is on the market, the estimates are far more accurate than if a home is not. But the estimates often do not consider individual conditions such as lack of maintenance.
Q: Can house hunters simply rely on the search sites?
A: No.
Since the Boston market is still a relatively tight one with listings often attracting more than one offer, buyers should consider supplementing their internet search with two other strategies.
The first is searching beyond multiple listing services and the websites. If there is a community that a buyer strongly prefers, the buyer might consider asking local residents about unpublicized homes for sale. If there are individual properties that are especially attractive, and buyers are under no time pressure, they might even consider contacting owners to indicate their interest. It might be worth the wait.
Most buyers will also benefit from seeking the assistance of an experienced, full-time agent who has satisfactorily served other clients.
Nearly half of first-time buyers end up working with an agent recommended by people they know. But before signing any agreement, buyers would be wise to ask the agent about their experience, fee structure, marketing strategy, commitment to working with them personally, and commitment to a fiduciary relationship, especially in relation to the properties they have listed.
Larry Edelman can be reached at larry.edelman@globe.com.