Two female foreclosure investors on opposite sides of the nation recently discovered a new and refreshing way to purchase foreclosure properties — online.
In Florida, Jennifer Crowley — a part-time foreclosure investor and stay-home mother — scrolled through potential foreclosure bargains on RealtyTrac’s online foreclosure marketplace from the comfort of her Tampa Bay, Fla. home.
Suddenly, Crowley spotted a diamond in the rough.
“I saw an address in Port Richey that I knew,” said Crowley, adding that the foreclosure property was located on the coast within walking distance from the sun-drenched beaches of the Gulf of Mexico. It was listed as an online auction with the bidding at $140,000. “I ran over and looked in the window of the empty house. It had granite counter tops in the kitchen, a new roof and it really looked nice.”
Next, Crowley went home, got on her computer, wrote an offer online and submitted the purchase contract electronically.
“Seven days later, I owned the property,” said Crowley, who specializes in buying foreclosures in Florida, which has the second-highest foreclosure rate in the country. “I can sell it now for $285,000 and double my money.”
In California, Karen Krynen, another foreclosure seeker intrigued by the notion of house-hunting online, discovered what she calls her “forever house” via an online search for foreclosures. While browsing RealtyTrac, Krynen noticed a run-down house on a hill about five miles from her Whittier, Calif., home.
“The bank’s price was well below the market,” said Krynen, noting that the home commanded panoramic views of La Habra Heights. “It’s an area we never thought we could afford to live in.”
Nestled at the top of a tree-lined hill with a long private driveway, the bank-owned property sat on a massive 40,946 square foot lot. It was exactly what Krynen, and her general contractor husband, Jeffrey, were searching for.
The bank wanted $599,000. The Krynen’s offered $500,000 and the bank took it. Although the home was small with two bedrooms and two bathrooms, they figured they could build a larger home on the huge lot.
In the pre-cyberspace age, buyers were more likely to meet a seller face to face — either with an agent or without one — to hammer out a deal.
But now, more and more, tech-savvy homebuyers like Crowley and Krynen are window shopping for foreclosures by computer. If there’s any lingering doubt about how the Internet is transforming real estate, they are powerful proof of how the Web is re-programming the real estate landscape.
Democratizing Data — Clicking Once, Clicking Twice, Sold!
Are Crowley and Krynen pioneers? Maybe so. But in the new digital democracy, where the information superhighway is jammed with eyeballs, the widespread availability of real estate information on the Internet has lured more than 80 percent of house-hunters to the Internet, according to the National Association of Realtors. Sellers, likewise, are increasingly willing to make the leap of faith into cyberspace.
Real estate shopping on the Web has brought on a radical and revolutionary change in the way homes are bought and sold. Buyers are finding more information via the Internet and sellers are doing more of the traditional agent’s work, leveling the playing field and giving consumers more control over real estate transactions.
“Increasingly, information-rich real estate dot-coms of all kinds are mushrooming across the Web, “democratizing the data,” said James J. Sacaccio, chief executive officer of RealtyTrac.
“The Internet has been a catalyst for a breakthrough in the real estate industry in terms of pushing the private information that realtors commanded out to the public,” Saccacio continued.
Barbara G. Cox, co-author of “Internet Marketing in Real Estate” (Prentice Hall) and an instructor of real estate technology at Saddleback College in Mission Viejo, Calif., said technology is making a significant and a long-lasting impact on the real estate industry.
“Real estate brokers and agents are no longer the gatekeepers of information,” said Cox, referring to the 800 multiple-listing services nationwide. “The Internet has empowered buyers and sellers. It has improved their knowledge and understanding of the transaction. And it has also raised expectations.”
She also said the Web, by educating buyers about what is available, can cut down the time the agents have to spend with clients.
Cox and other real estate experts said the Internet — and all the technologically driven tools that fuel its popularity like podcasting, IM, text messaging, blogging, mapping, virtual tours, RSS feeds and other features — have made investing in foreclosures easier and far more transparent, giving buyers and sellers access to vital real estate information once controlled exclusively by real estate brokers and a small circle of real estate professionals.
Joe Henry, a real estate broker in McLean, Va., said there’s an “intrinsic value” to researching and buying real estate on the Internet.
“Everyone starts their home-buying search on the Internet now,” Henry said.
There’s no hard data on how many buyers purchase real estate online like Crowley and Krynen. But there is anecdotal information that this is a growing trend and more and more buyers are taking the leap into e-realty.
“By the time buyers call me, they have already been on the Internet,” said Lisa Johnson, a Boston, Mass., real estate agent that has embraced technology and the Internet in her daily business. “A growing percent of my business comes from the Internet.”
New Technology Ahead: A Paperless Transaction?
Real estate websites have changed significantly in the last 10 years, and new technology is sure to continue to change the way real estate listings are presented, marketed, sold and exchanged on the Internet, said Jim McFadzean, a real estate agent in Woodbury, Conn.
“In the next five years, if you’re not on the Internet you will be out of business,” speculated McFadzean, who generates 90 to 95 percent of his buyer business online.
Like others in the field, Ilyce Glink, a nationally-syndicated columnist and author of “100 Questions Every First-Time Home Buyer Should Ask,” said that the next generation of real estate websites will incorporate personal networking structures like MySpace and YouTube.
Cox, the real estate instructor and author, said the next innovation on the technological horizon is electronic “transaction management,” a service that allows buyers and sellers to track and complete a sale electronically, from the moment a contract is signed until the deal’s closing. A broker essentially creates a website where all the parties involved in a sale — from the appraiser and surveyor to the termite inspector and lawyers for every party — can file their reports online.
“Theoretically, electronic transaction management should have fewer errors,” said Cox.