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Jeff Barnett, president of the Silicon Valley Association of Realtors, says he believes that one of the biggest problems with the Internet is that people think they can buy or sell a home without the assistance of a real estate professional.
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Do-it-yourself real estate--to a point
By Jean Newton
It's no secret that technology is changing the way the world conducts business and the real estate industry is no exception. Primarily a service-based industry, many Realtors have embraced technology and the Internet to provide better service to their customers. Those Realtors who aren't up to speed yet with email and Internet access are starting to feel the pressure as more and more consumers rely on computers for research and communication.
"The face of real estate is changing," said Jeff Barnett, president of the Silicon Valley Association of Realtors. "There are several new trends on the horizon that are a result of the advent of a technology-centric society. But the one thing that won't change is the real estate industry's focus on relationships and providing knowledge and information to our clients. Technology enhances our ability to provide better service."
While some Realtors initially feared the idea of open information on the Internet, such as access to listings of homes for sale previously only available directly from Realtors, Barnett said the concept of direct access by consumers actually saves time for both the client and the Realtor.
"Buyers are becoming more Internet savvy. A buyer may look at 30 to 40 homes on a site, then call a Realtor once they've defined their needs and narrowed their choices down. The Realtor can then show them the homes that fit their exact criteria," said Barnett.
Now that the Multiple Listing Service is online at www.mlslistings.com, consumers can check for available homes in Northern California, find open houses, look for a Realtor or real estate office or find a service provider. Information is provided by RE InfoLink and contains complete coverage of Silicon Valley, including Santa Clara, San Mateo, Santa Cruz, Monterey, and San Benito counties. Although possibly a difficult task to accomplish because of the magnitude of information, Barnett said there have even been discussions about a national multiple listing service as well as expanding the listings into additional areas via RE InfoLink's website.
"Providing access to the public is great. We are not afraid to give out this information because there will always be a need for Realtors to close the transaction. Right now when clients are finished with a transaction, they usually have a file an inch thick. Consumers just can't be up to speed on the latest liability and laws, so there will always be a need to hire a Realtor," said Barnett.
Liability is a big issue, especially in California, which is a full disclosure state. With up to 15 different disclosures that may be necessary during a transaction, Barnett said that missing only one can provoke a lawsuit from the buyer. "It's really important to have a full-time professional Realtor helping you. They have the expertise and knowledge to guide you through the process," said Barnett.
Barnett said he believes that one of the biggest problems with the Internet is that people think they can do it themselves. Some Internet companies and alternative discount brokers promote this concept, but Barnett thinks it isn't really feasible for people to try to handle a transaction on their own. For instance, one of the newest trends in the industry, a concept called "limited service listings," raises a red flag for Barnett.
"The National Association of Realtors passed a policy giving multiple listing services the permission to designate limited service listings, where someone can list a home for a small fee, such as $200. Consumers need to understand what they are getting into, that the limited service listing does not come with the services of a professional Realtor," said Barnett. "Right now there is no limited service disclosure, so when you go to a limited service broker, you run the risk of not having fair legal representation."
Barnett advises caution for another reason. "There could be an issue with dual or single agency that might incur a liability as well," he said. "The public needs to be aware that the old adage of you get what you pay for is true."
Agency is a legal relationship established between a buyer or seller and the agent or real estate broker where the agent represents the buyer or seller in dealings with third parties. The relationship requires the consent of both the buyer or seller and the broker. Single agency means the broker represents only the buyer or the seller and in dual agency the broker represents both buyer and seller in the same transaction.
In the real estate industry, even if one Realtor is working with a buyer and another Realtor in the same office is working with the seller, the broker of the real estate firm is considered a dual agent. In addition to the gray lines surrounding the matter of agency and the potential for liability, Barnett reiterated the need to find a qualified, experienced Realtor who can guide the client through the transaction.
"There will always be do-it-yourselfers, and technology has enabled more people to try it on their own," said Barnett, a vice president at Alain Pinel Realtors in Los Gatos. "At Alain Pinel, for instance, we have already embraced technology and are using it to provide our customers with information so they can be more informed."
While technology has paved the way toward better service to clients, Barnett does not think Internet real estate companies or retail real estate has stood the test of time. "Many companies working solely on the Internet have already gone under, and most of the alternative discount brokers are gone because it costs a lot of money for overhead. Technology is a conduit for the traditional real estate industry, and I believe the future will capitalize on technology and e-commerce as an essential avenue to build strong relationships with our clients."
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