Recently, I've had the chance to sit down with an executive at one of the top real estate companies in the world. It just so happened that he was looking for a house right now (and no, I can't tell you who he is so you can try to solicit him). So before our business meeting got going, we got to talking about finding a house, what the process looks like, and so on. It triggered a thought -- more of a question, really -- for me.
What exactly is the first step in the whole home buying process?
If you look at the 2007 NAR Profile of Home Buyers and Sellers (PDF, $125), I'm sure you'd find some fascinating things. I'm not about to pay $125 to find out. However, it appears that the survey was actually done by NAR on behalf of various state REALTOR associations. So I tracked down the New Jersey Association of REALTORS version of the study, which is available here (PDF) in summary form. In the study, we find this gem:
32% of recent buyers reported that their first step in the home-buying process was looking online for properties for sale.
Because said executive and I spent a lot of time talking about various towns, neighborhoods, and school systems. Not once did a particular listing or a house come up.
It makes sense, actually. When my wife and I were thinking about buying a house, long before either of us got online and started combing through listings, we were talking about what kind of town we wanted to live in. Before we even thought about a house, we were thinking about convenience to our respective jobs, school system, what kinds of parks and shops, what sort of downtown we wanted, etc. etc.
I believe that is the real first step in the home-buying process -- thinking about the town or neighborhood.
The NJAR study actually hints at this, noting that "The typical home buyer purchased a home 13 miles from their previous residence."
13 miles in NJ is at least a town over, maybe two. Maybe even a different county. I'm pretty sure that all of those buyers did some sort of research for their new town prior to doing any sort of a real estate search. The reason why I'm so sure is that in order to do a listings search, you need to define the area by zip or by city, state or what have you.
We at Onboard Informatics do believe that this is how people do home search. First, they think about the neighborhood. Then, and only then, do they look at houses for sale to see, "Can I afford to live there?"
And yet, looking at real estate websites, it appears to me that most of them focus first and foremost on the listing search. Even those of you who are our clients, and have access to some of the best, most detailed neighborhood and school information available seem to use the neighborhood information as an add-on or an afterthought to your listing.
May I suggest an alternative approach?
Consider putting your neighborhood information and search front and center. We believe that is the first step in the consumer's mind when he begins the home-buying process. We believe this happens weeks ahead of anyone conducting a search for available homes or contacting a realtor.
In a different version of the same NAR study, this time by the the Illinois Association of REALTORS, we find this gem:
|FACTORS INFLUENCING NEIGHBORHOOD CHOICE, BY LOCATION|
|(Percent of Respondents)|
|Buyers who Purchased a Home in a:|
|All Buyers||Suburb/ Subdivision||Small town||Urban/ Central city||Rural|
|Quality of the neighborhood||65%||67%||57%||72%||49%|
|Convenient to job||54||54||52||60||29|
|Overall affordability of homes||41||44||51||26||34|
|Convenient to friends/family||46||47||38||54||19|
|Design of neighborhood||29||30||31||29||9|
|Quality of the school district||32||41||22||11||20|
|Convenient to shopping||30||29||26||36||18|
|Design of neighborhood||26||26||18||30||24|
|Convenient to schools||20||23||20||13||10|
|Convenient to entertainment/leisure activities||18||16||5||39||*|
|Convenient to parks/recreational facilities||19||19||5||29||6|
|Availability of larger lots of acreage||11||10||14||3||46|
|Convenient to health facilities||9||11||9||6||*|
|Home in a planned community||3||5||*||*||6|
|Convenient to public transportation||21||18||6||44||13|
|Convenient to airport||7||7||5||10||8|
|* Less than one percent|
Again, this makes perfect logical sense. Put yourself in the buyer's shoes. You'd be asking the same questions also.
Is the town close to my job? Are my friends and family nearby? What's there to do there, or in nearby towns?
All of this research happens before the consumer takes any action identifying them as being engaged in a home-buying process. I think it's worth getting in front of them when they're doing that research.
Call your account representative, or contact us directly, and let's talk about how you might leverage our assets to do this.
But even for those who are not our clients... even if you're using some other data source... it just makes sense to think about the consumer at the first step. That is where you and your local agents can add enormous value, by telling someone who doesn't know much about your town what's what, and the inside scoop.
Image Credit: Imanka on Flickr.com