Tuesday, August 01, 2006

Article in July 28, 2006 Detroit Free Press

Web puts real estate at your fingertips

Virtual marketing is latest tool for brokers in competitive world of home, condo selling.

Marilyn Bowden / bankrate.com

These days, anyone in the market for a new home or a beachfront condo can get a better idea of what's available by browsing the Internet instead of the Sunday paper. According to the National Association of Realtors, there are now about half a million Web sites in cyberspace hawking dream homes.

The Internet has been an important selling tool for the real estate industry for nearly a decade. During the recent residential boom, some have taken it to a new level, using the Web as the primary marketing tool to snare buyers for preconstruction projects, which exist only in the developer's imagination. For this class of sellers, the Web has replaced the sales center; the virtual tour has nosed out the model unit.

However, consumers need to exercise caution before leaping into an investment in a property that, as the market softens and some projects inevitably fall by the wayside, might never be anything more than a computer-generated fantasy.

The rise of virtual marketing

"Historically, the sales office would open before there was a project," says Mark Zilbert of South Florida's Zilbert Realty Group, which specializes in Internet sales.

"But with the emergence of the speculator market, which really drove preconstruction sales, we entered the era of the instant sellout. By the time the sales office was built, there was nothing left to sell."

While developers were once leery of Internet listings, Zilbert says, broader outreach at lower cost has converted many to the gospel of virtual marketing.

A well-designed Web site is now a must for large projects, says Liam Sullivan, spokesman for real-estate marketing firm Cotton & Co. The company has more than 60 Web sites up and running for projects all over the United States and the Caribbean.

Sullivan says virtual tours using sophisticated technology can convey a much better idea of what a project will look like than a visit to a construction site.

An integrated approach

All this doesn't mean that all developers are ready to forsake tried-and-true methods. Many prefer an integrated approach.

"While we use the Internet to expose our product, we rarely consummate a sale that way. So we're not doing away with bricks and mortar," says Pamela Liebman, CEO of The Corcoran Group, a New York City-based residential developer and marketer.

No matter how quickly a project "sells out," a sale isn't really a sale until the unit is delivered and the contract closed, says Edgardo Defortuna, president of Fortune International, a Miami-based real estate and development firm.

"Even if we are mostly sold out, we still build a sales office and models," he says. "There has to be something to keep the buyer excited during the two or three years the project may be under construction."

Another thing the Internet will never be able to replace, Defortuna says, is the relationship between seller and buyer. "There is no substitute for personal contact," he says.

The industry online

Industry statistics make it clear that the real estate profession is not in danger of losing ground to Internet sales.

Citing a recent survey of 135,000 homebuyers by the National Association of Realtors, spokesman Walter Molony says that though 77 percent used the Internet to search for properties, 81 percent used an agent to consummate the sale.

"The Internet is the norm today," Molony says. "But people still want a Realtor to explain the contract and handle the paperwork."

No comments: