10 Pros and Cons of Online Real Estate Platforms
Selling or purchasing a home is a huge life decision. Not only are you dealing with large sums of money, but you’re dealing with your bank, your lawyer, your movers, and in most cases, an agent like myself.
In today’s digital world, many homeowners, or aspiring homeowners, can turn to online platforms like Zillow to find or sell their homes. We’re going to examine some pros and cons of online real estate platforms to help you decide the best strategy for buyers and sellers just like you.
The Downside To Online Real Estate Platforms
1. Real Estate Is A Full-Time Job
Whether you’re selling your home or purchasing a new one, the process demands a lot of your time.
If you’re selling your home, will you be available for showings during the week and weekends? Are you free to answer calls from potential buyers at the drop of a hat? Will you be able to market your home once you’re done work for the day?
If you’re buying a home, do you have time to contact the seller and set up showings? Do you know how to access your listing information for your mortgage advisor? Can you confidently compare the prices of similar homes in your area of interest?
Like most homeowners, the answer is a hard “no”. Real estate transactions are incredibly demanding of one’s time and energy, with some searches taking as long as a full year. While an online platform might be an easy option, it lacks the support of an experienced agent.
2. Avoid Emotional Sales
Selling and purchasing property is a huge decision, and comes with emotional ties. Without an agent, you are solely responsible for dealing with offers, rejections, follow-ups, and negotiations.
As a homeowner, being one step removed from the selling or buying process can prevent silly, but significant, mistakes from occurring. Agents can lessen the sting of rejection, for example, or the upset of a low ball offer.
In contrast, agents can facilitate meaningful negotiations of price for their buyers in a professional manner. The good, the bad, and the ugly of real estate transactions can be easier to digest when it comes from a broker who you trust and who is on your side from start to end.
3. Losing Access To Agent Networks
It’s unlikely that your personal and/or professional networks will have any interest in the fact that you are selling and/or purchasing a home. This isn’t because they don’t care about you, but more so that they likely won’t purchase your home, nor are they going to be interested in helping you find a new one.
People are busy, and listing on platforms such as Zillow, Redfin, or Craigslist is only one small step in marketing your home. It’s far from enough to get solid offers on the table. Alternatively, searching for a home without the experience of an area, previous listings and sales, the overall value of a home and its criteria, and so on, is incredibly difficult.
Simply put, sellers and buyers do not have the connections that experienced agents have, and it inhibits their ability to sell or buy a home on their own. Can you do it? Yes, of course. But the real question is, “should you do it?”
4. Weeding Out Unqualified Buyers And Properties
Agents have the ability to sift through your potential buyers or potential properties. Whether someone who wants to view your home is legitimately interested, or just a curious neighbour, is detective work that you will have to do should you forgo an agent. Similarly, agents can take your lists of “musts” in a new home, and filter out properties that don’t meet your expectations.
There is a level of training and skill that an agent brings where Zillow, or similar platforms, falls short.
5. Price Negotiations Take Skill
All the sales experience in the world means next to nothing in the real estate world. It’s a specific industry and requires specific skills in price negotiation.
Going at it alone as a buyer or seller means that you will be negotiating a price with someone else’s agent. An agent who has niche knowledge for the industry, the area, market conditions, a history of sales in the area, an in-depth understanding of local customs for home sales… Just to name a few. Furthermore, agents are both trained, and emotionally uninvolved, in this process and handle difficult conversations with a higher level of professionalism than buyers and sellers alike.
The Upside To Online Real Estate Platforms
1. Sell Fast
Zillow Offers can sell your home fast if it meets the requirements to buy. While data suggests that sellers lose about 10 to 15% when selling on Zillow without an agent, it doesn’t mean you can’t get a great price for your home. You need to ask yourself what you’re comfortable with accepting both fiscally and emotionally.
So how exactly does this work? Essentially, Zillow will purchase your home, and then turn around and sell it themselves. On one hand, it saves you a lot of time and energy. On the other side, you should be prepared to sell at a lower price than you may have originally planned.
Additionally, Zillow Offers has very strict requirements in order to buy your home outright. It must be a relatively new property and in good condition, and with more repairs comes fewer profits. If your home is in good condition and you’re looking for a simple sale, you can take their eligibility questionnaire and find out if Zillow Offers is right for you.
2. Use Online Platforms To Increase Awareness
Platforms like Zillow are a great tool for sellers, buyers, and agents alike!
The key to making money is to utilize these platforms in tandem with other marketing strategies. Whether that be social media, display ads, or other advertising methods, normally a single platform is not enough to get people to see your home. Similarly, reasonable buyers often look for credibility in online listings, and that comes with supporting content and information.
3. User-Friendly Experience
Zillow, and similar platforms, are very easy to use and navigate. This is a major advantage for sellers or buyers who prefer to operate without an agent.
Something to note here is that an estimate of price provided by a platform, like Zillow, is only as accurate as the data provided. This means if there is any misinformation in a listing, such as square footage, bedrooms, or lot size, the estimate will be inaccurate.
Zillow’s co-founder, Spencer Rascoff, listed his home for $7 million over the Zestimate price given from his own company. This goes to show that you can’t always trust these automated estimate tools.
4. Full Control
If you’re looking to have total control over the purchase or sale of your home, an online platform like Zillow is the way to go. From price and budget to marketing, screening potential buyers or properties; you will have the final say. However, Zillow will use agents to sell your home and this will require a form of commission fee to be paid by the seller down the road.
Research suggests that having an agent garners higher profits, even after paying out a commission. Be aware of alternatives to selling and buying properties to ensure you choose the best (and most profitable) option for you. Remember, there is always a price for convenience!
If you have time to spare, going online to sell or buy may not be a bad idea. You can set your own schedule, take your time making decisions on marketing, and not feel rushed into any decisions.
Overall, going online or choosing an agent completely depends on your comfort level, your experience, and your capacity both in time and financially.
If you’re on the fence, going with an agent is a safe choice, and gives you more freedom as either a seller or a buyer. If you’re looking for more control and to be very hands-on with the whole process, you may consider going with Zillow, or another platform. At the end of the day, you need to make a decision that suits you, and your real estate needs.
Good luck out there!