Online listings are no substitute for Realtor® knowledge
Originally appeared in Hills Publications, June 13, 2008 and ANG Newspapers, June 15, 2008
Clients called me today, very excited about a property they had found online and wanting to know why I had not told them about it. I explained that I had previewed the house for them, and found it had too many “issues.” From our initial interview, and subsequent conversations, I knew they would have found it unacceptable.
According to a California Association of Realtors survey, eight of ten home buyers use the Internet for searching. They can quickly find an address, see photos, price, bedrooms, baths, square feet and much more; however, a great deal of essential information never shows up on the screen.
What they did not know
Although the property my buyers found was in an area they wanted, they did not realize it is was located in a less desirable section. One sign of this is that several, nearby houses are in dire need of exterior paint and landscaping, reflecting neglect.
Although the online photos look good, they were somewhat misleading. The home has charming features such as built-ins and hardwood floors, but it also has three different types of windows and some non-period improvements.
On broker’s tour, I spoke with the listing agent and learned that the pest control report is substantial and indicates possible, expensive foundation and drainage problems (the report suggested further inspections). These, along with additional concerns, led me to scratch it off the list.
Buyers, be aware
Although some houses will actually be as good or better than they look online, in general, you cannot take what you see on the Internet at face value. Noticing what information is given or omitted may give you clues. For example, if the price seems low for that neighborhood, there probably is a reason. Or, if square footage is left off, that commonly means the home is tiny.
Lot size can also tell a story. If, for example, a parcel is shown as 3200 square feet, this should say to you that there is not much outdoor living. A standard lot in Oakland and nearby cities is 5000 square feet. In most cases, a 3200 square foot lot will have only a postage stamp backyard, if any. This may explain why there are no photos of the outside.
Is it light or dark? Many buyers are not happy with a house that is north-facing or shaded by large trees. This will not be evident online.
Was major remodeling, such as a new kitchen and bathrooms, done without permits? It may look good, but, without permits, how can you have confidence that the work was done to code and does not pose some health and/or safety hazard? Do not expect to find this out from a Web search.
We live in earthquake country and there are some locations designated as “slide areas.” This is almost never mentioned online, but is essential information. The online pictures will not reveal sloping floors and cracks in the foundation — issues that definitely affect value.
A number of cities and jurisdictions have sewer lateral, automatic gas shutoff, seismic retrofit and other ordinances. The seller may expect you to handle these after close of escrow, but this is not indicated in listings you will see on the Web. In particular, sewer line repairs can be costly.
If the house backs onto a creek, there may be maintenance mandates and other restrictions. Marketing materials may stress the serenity of creek side living, while failing to describe the additional responsibilities.
Pricing
With the omission of so much relevant information, it is not possible to reach a well substantiated conclusion on whether the asking price is high, low or reasonable just by browsing through online listings. Even with so many sites that provide comparable sales information and price estimates, the data are often inaccurate.
One factor that might help is CDOM, a Multiple Listing Service acronym for “cumulative days on the market.” If this is a large number, you could consider it a clue that the market is not agreeing with the asking price which, perhaps, may be flexible.
If CDOM is low, that may mean it is new on the market and, therefore, firmer on price. What you will not see, however, is if the house had been listed for the previous nine months, taken off for a 30 days, then re-listed. That would bring it back looking like a “new” listing when, in fact, it was not. In addition, marketing information on the Net will not tell you how many offers the home has, or has not, had.
Final Thoughts
The impression and feeling you get when seeing a house in person is usually quite different from your initial sense when viewing it online. This is why the best agents spend considerable time eliminating properties that are not right for their buyers.
There are many more conveniences available to buyers today than when I began in the business 29 years ago. A myriad of information and listing photos/videos exist online to help with your search. Despite that, as my column’s title warns, what you don’t know can hurt you.
Related Articles:
Sewer Line Blues, I
Sewer Line Blues II