7 smart ways to tweak your online home search
Buying Advice: If you're like most buyers, you start your house hunt on the Internet. Here's how to pare down those options and find the homes that are right for you.
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Scouring real-estate search engines is a little bit like online dating. An overwhelming number of homes are available, but probably only a few are right for you.
To cut down on your time in front of the computer and to boost your knowledge about the market, we've gathered some tips for searching for homes online, as well as some advice on vetting the neighborhoods you have your eye on.
In this edition of Buying Advice, we'll also check in with the latest housing stats and find out where the biggest foreclosure bargains can be found. (Hint: Think East Coast.)
Use the search engines to boost your real-estate IQ
If you're like most people, your home search starts in front of the computer, where you type cities or ZIP codes into a real-estate search engine such as Zillow, Trulia or Realtor.com. (Realtor.com is a partner of MSN Real Estate.)
Instead of spending hours trolling photos, why not streamline your search so you're spending your time and effort in the right area? (Bing: Do online home photos lie?)
"You can have tons and tons of different properties," says Lee Clancy, vice president of consumer products for Trulia. "But you have to think, 'What's really important for me and how do I find the properties that match that?'"
Here are seven ways you can use those search engines to boost your real-estate IQ before you start hitting open houses.
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1. Narrow down the neighborhood. Sure, you've heard that inner-fringe suburb is nice. But what's so nice about it? Trulia can help with that. Click on the "Local Info" tab at the top, and it pulls up a map of the ZIP code or city you've selected, allowing you to overlay maps that show crime, commutes and school quality as well as local amenities. Both Zillow and Trulia also offer market summaries that track price history. "You can see the trajectory of home values in the neighborhood," says Katie Curnutte of Zillow. On Realtor.com, you can get an idea of what houses are going for by selecting the "Recently Sold" option under "Homes."
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2. Put a ring around it. Search engines usually track information by ZIP code or city, but you might find that your preferred places to live straddle ZIP codes or municipalities. Zillow and Trulia offer a draw-your-own-search function, so you can literally circle your real-estate sweet spot. Trulia lets you do it on your computer by clicking on the hand symbol on the upper-right corner of the search map. (You can save the search when you're done.) With Zillow, the feature is available only on the mobile and iPad applications. Both allow you to get alerts on new listings or changes in your search zone.
3. Refine, refine, refine. Sure, you may have narrowed your results by bedrooms and price, but what about filtering to see only foreclosures, new construction, open houses or homes with a pool? Clicking on Trulia's "more search options" link at the top will give you these choices. Zillow also lets you look at pre-foreclosures — homes that are in some stage of default — so you can scope out a future bargain and monitor it. Moreover, you can choose to sort your listings the way you want, such as by lowest price or days on the market. Trulia also allows you to put new price reductions at the top of your list so you can track changes easily.
4. See if it's a sellers market. When you select an agent and start looking in earnest, you'll need to know exactly what kind of leverage you have. One way to take the temperature of your market is to look at what homes are selling for relative to their list price. Did sellers get what they asked for? Head to Zillow to find out.
First, click on the "Local Info" tab and pull down the "Home Prices and Values" menu. There you can sort pricing data by a whole host of metrics. The sale-to-list-price comparison requires clicking on the "more metrics" link at the bottom of the Values column. If sellers are getting more, you'll know not to play hardball when you bid. Zillow also computes estimated values, or "Zestimates," for homes around that listing that are not for sale, so you can see if that house is a diamond in the rough (neighborhood). Some homeowners whose homes aren't for sale also enter a "Make Me Move" price, giving you more options if inventory in your chosen 'hood is tight.
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5. Follow that home! Once you see some homes you like in your chosen area, follow them just as you would a friend on Twitter. This will get you updates on what's happening with prices, tell you when that home goes into escrow and, in Trulia's case, will get you recommendations of similar homes that fit the size and price requirements of the home you liked. You can dial down the frequency of these email updates to weekly if you are just starting to look. Those preferences can be found under your account menu on the upper-left side of the screen.
6. Take an app with you when you go out driving. Mobile apps are a great way to check out listings and navigate among open houses on the weekends. You can check out pricing history, follow homes you like and record details about them. Zillow's app lets you snap pictures and save them with each listing, so you can remember the little details that aren't shown in the listing photos — the junkyard dogs next door or the expansive cabinets in the kitchen. Trulia will send you text notifications or emails on properties that interest you. Zillow uses only email.
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7. Be wary of online agent recommendations. While the search engines are a good place to check out properties, they may not be the best way to pick your agent. Just as companies pay to be featured prominently on Google, agents pay for official-sounding designations on real-estate search engines. The term "Pro" on Trulia is a title that agents can buy, putting them at the top of the list. Moreover, the term "VIP" just means that agents are active in Trulia's online community, not that they have sold the most homes in your area. Of course, it doesn't hurt to check out online reviews of agents, and on Zillow, you can see how many listings they have.
Home sales dipped in December, but prices held their ground. Existing-home sales declined 1% to 4.94 million in December from 4.99 million in November, according to the National Association of Realtors. That pace is still 12.8% above the 4.38 million homes sold in December 2011.
The national median price for an existing home was $180,800 in December, 11.5% higher than in December 2011. That's the biggest year-over-year increase since November 2005, but prices were virtually unchanged from the median of $180,600 in November 2012.
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While many fear the slowdown in housing might stem from a soft economy, NAR's chief economist, Lawrence Yun, blames the lack of suitable homes for sale for December's decline. "Record low mortgage interest rates are helping many homebuyers, but tight inventory and restrictive mortgage-underwriting standards are limiting sales," Yun said.
Total housing inventory at the end of December dropped 8.5% to 1.82 million homes -- a 4.4-month supply at the current sales pace, down from 4.8 months in November. It was the lowest supply since May 2005, near the peak of the housing boom.
The decline in sales should continue into January, according to the NAR's Pending Home Sales Index, which is based on contract signings rather than sales. That index, in which 100 is considered average, fell 4.3% in December to 101.7 from 106.3 in November. It remains 6.9% higher than last year.
There are some good tips here about searching for a home. BUT beware. Having just gone thru a move in the last year or so, I used Zillow, Trulia, and Realtor.com in addition to my real estate agent. The three online databases all have flaws and can be very misleading. Real estate agents just roll their eyes when I mention Zillow., for example.
I can tell you that info on Zillow in particular is poor. They show houses still "for sale" that were sold 6 months or more ago, not all houses for sale are listed on Zillow (I think the agents have to put it there), their Zestimates (Zillow) are horrible - not even close in many cases. Ignore them. One must be very careful in using any data as gospel. I'm sure that there are many people who input and touch the data (real estate agents, county records, Zillow, etc.) but as the saying goes - Garbage In, Garbage Out.
The other thing I noticed was in many cases, the historical pricing and sold info is incorrect. It will show the same house sold many times for exactly the same price over many years. Some of my neighbor's homes show that they were sold recently, but they were never for sale in the first place. Not sure how Zillow is getting their info.
In my case, my home sold for $217,000 but Zillow shows it sold for $177,000. I've left three emails to Zillow with no response. My selling agent and title company couldn't help either. I get concerned with inaccurate data because people from Zillow and others show up on TV shows talking about trends in the market based on their data and I know that there is a lot of garbage in that data.
These online data bases are only a general reference tool. The best bet is to get with an agent and have him/her sent you auto emails on all homes that meet your criteria. That is the most accurate and timely. I mostly use the online sites for aerial views of where the property is.
I think that the online databases (Zillow, etc.) are a great idea, poorly executed. If they can clean up their data and become more reliable, they can be a great tool.