Buyers Seek Ammunition From Property Web Sites

By DANIELLE REED
Staff Reporter of The Wall Street Journal
From The Wall Street Journal Online

May 5, 2003 -- Like many would-be home buyers, David Goldstein did some due diligence before placing a bid, keeping track of local sales in the paper and calculating the property taxes. Then he hit the Web to get the real story -- and learned that the sellers had paid half their asking price.

In the latest twist in the ongoing real-estate wars, buyers are increasingly arming themselves with data pulled from Internet databases -- from last sale price to how much is left on the mortgage to how good the local schools are. It's the kind of information home shoppers once relied on their agents for, but in the current uncertain market (sales of existing homes fell 5.6% in March and many once-hot spots have cooled), they're determined not to overpay -- and doing the research on their own. "Buyers are going crazy on the Web," says Lanse Robb, an agent on Boston's North Shore.

Indeed, according to a Nielsen/NetRatings survey of big real-estate sites, the number of users has jumped 17% to 4.8 million in the last year. Recently launched research sites like Domania.com and GoneHome.com have seen their numbers of registered users as much as double during the last year alone. Despite the dot-com bust, online real estate "is more than holding its own," says Patrick Thomas, a Nielsen senior analyst.

Rocky Boler wasn't necessarily looking for a bargain online -- the cable executive was willing to pay $1 million for a place in New York's Hamptons. But he needed to make sure local zoning wouldn't keep him from building a six-car garage for his collection of vehicles. So he started looking up local zoning codes and building restrictions electronically. "I became much more of an expert than even the Realtors," says Mr. Boler, who eventually bought a five-bedroom house in Southampton. "All the online work saved me tons of money and time," he says.

Beyond Listings
Of course, people have been using the Web to house hunt for almost a decade. But until recently, most of what would-be buyers could get online were listings. For things like comparable sales or school test scores, they still had to turn to their broker -- or make a trek down to City Hall to dig through records. Now, they can get the same information on the Web in minutes. And while sites like Neighborhood Scout work by putting together data from all over the country, in spots like Palm Beach, Fla., and New York City, local governments are putting up all the info themselves, letting buyers check on everything from a home's assessed value to whether there are any federal liens against the property.

Not everyone thinks that's such a great idea, of course. "That's terrible," says Los Angeles broker Heidi Lake, about just how much data is available online. "It's like taking someone's clothes off." Other brokers complain that would-be buyers can get hung up on the data and never get around to making an offer (especially when they find out sellers paid a lot less than they're trying to get) and that all the research is turning clients into the equivalent of stock-market timers trying to buy on the dips. "You have to know how to take three steps back and say, 'This is what's available today in my price range that I like,' " says New York agent Patricia Cliff.

And not everything is available online, of course. In some states, like Texas and Wyoming, sales data isn't part of the public record, so there's no way to track what a house might have gone for. Even when information is available, it can be sketchy. On Domania, for instance, many comparable sales don't include how big a house is or the size of the lot, making comparisons difficult. Then there are the intangibles. "There can be a dark side of a mountain or a bright side, like in Telluride," says Santa Fe agent Mike Baker. "You can't see that on the Web."

Zeroing In
Maybe, but Tricia Portnoy's been using the Web to zero in on a specific section of Bayport, N.Y., where she can still land a house in her $400,000 price range. On the Neighborhood Scout site, she plugged in everything from her desired school ratings to crime rate, as well as home prices -- and the computer steered her to look in the north-central part of town, where ranches and Cape Cod-style houses on a third of an acre are going for about $380,000. "When you go into a new town, normally you don't know what's the good side of the tracks and what's the bad side," she says. "But I do."

And Boston banker Bill Gribbell says he has learned things on the Web that listings agents haven't exactly been eager to share -- like the fact that properties in his area are routinely selling well below listing prices. After tracking local sales electronically for a year, he used the research to back up a low-ball bid on a 10-bedroom $1 million-plus house nearby -- and got it for more than 20% below the asking price. While sellers are just beginning to wake up to the changing market, "the cold hard facts are the cold hard facts," he says.