E-Commerce in the Real Estate Brokerage Industry

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1

E-Commerce in the Real Estate Brokerage

Industry

Waleed A. Muhanna*

Executive Summary. This article summarizes the results of a survey of 150 real estate firms designed to examine how they are attempting to adapt to the Internet and to assess their perceptions regarding its potential. Results indicate a dramatic rise (50%) in the number of firms using the Internet during the second and third quarter of 1999, and that an increasingly significant portion of those firms’ gross sales is attributable to it. The adaptation of the new technology is viewed as an opportunity to attract new buyers and reduce marketing and customer acquisition costs. Respondents report that they expect a substantial increase in business via the Internet by 2002. Thus, firms may be underestimating the potential of the Internet.

Introduction

The confluence of technological, economic and cultural forces during the last decade has given rise to new business models and made possible new systems and strategies that many believe will transform the very nature of work, the structure of organizations, the way firms operate, relate to other firms and compete in the marketplace. Although it may well be one of the most over-hyped technological innovations of all time, there is no question that the Internet is already having an impact upon markets and business organizations. In a short period, the Internet has emerged as a viable commercial medium, forcing significant changes on industry. According to data from a December 1999 Harris Interactive survey, the use of personal computers (PC) in American homes has just surpassed 50% (compared to 30% in early 1996), and 90% of PC users (about 110 million adults) are now online. Industry analyst firm Dataquest, a unit of the Gartner Group, reports that online retail sales doubled in 1999, reaching $20 billion, and projects those sales to reach $147 billion in 2003.

This article reports on the first phase of a larger research project investigating how the new information technologies are likely to affect the real estate market and industry structure and identifying the options these changes present for firm strategies. The article summarizes the more important findings of a telephone survey of 150 Ohio real estate firms focusing on what those firms are doing in this area and their perceptions regarding the potential impact of the new medium. The survey was conducted during the second half of August 1999.

Motivation and Objectives

The Internet is quickly emerging as a major shopping medium. According to a July 1999 study by America Online / Roper Starch, 42% of Internet users say they regularly *Ohio State University, Columbus, OH 43210–1144 or muhanna.1@osu.edu.

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shop and purchase products and services online, compared to 31% in 1998—an increase of one-third. The activity of shopping for a home is no exception. In fact, according the National Association of Realtors (NAR, 1999), the number of consumers in the United State using the Internet to search for homes rose from just 2% in 1995 to 23% in 1999. (The same NAR survey also seems to suggest that most potential home buyers, regardless of whether they themselves used the Internet to conduct their search, want their real estate agent to be Internet savvy; only about 25% of the respondents felt that this characteristic was not important.) In Ohio, the picture appears to be even more compelling. A survey (Reichert and Lange, 1999) of individuals who bought homes in Ohio during a two month period (September and August) in 1998 showed that 73.5% of those buyers had access to the Internet and 38.7% used it in some facet of the home buying process. This study aims, in part, to examine how real estate firms are attempting to adapt to the new medium and satisfy the growing number of Internet-savvy homebuyers. The objective is two-fold: (1) to examine real estate firms’ use of the Internet; and (2) assess their perceptions regarding the new medium.

Methodology

Data for this study were collected through a telephone survey using a questionnaire. The target interviewees were randomly selected from a database of 3,200 principal brokers in Ohio, supplied by the Ohio Association of Realtors. Although the target population consists of firms in Ohio, some of the results suggest that Ohio firms might be representative of real estate firms throughout the country. The Center for Survey Research (CSR), an independent surveying facility at Ohio State University, was commissioned to administer the questionnaire by phone. This was done to ensure quality; personnel at the Center are trained in interviewing techniques, and they have extensive experience in conducting telephone surveys.

Survey Development

The survey instrument was developed based on a review of published materials in academic and practitioner journals and periodicals pertaining to the Internet and innovation adoption in the real estate industry. A couple of questions were adapted from the Bond, Seiler, Seiler and Blake (2000) survey to facilitate comparisons, but the rest are original. The development of the questionnaire involved a series of tests with two students and two faculty members over a period of two months. Then, in consultation with the staff at the CSR, the instrument was programmed into CSR’s computer-aided telephone interviewing system and pilot tested with principal brokers of ten real estate firms. Based on feedback, the wording of a couple of items was changed to improve clarity. The final instrument appears in the Appendix.

Sampling

Prospective interviewees were randomly picked from the list from the Ohio Association of Realtors. Each prospective interviewee received up to five calls to schedule or reschedule (if needed) an interview appointment. A total of 197 principal

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brokers were contacted, and 150 interviews were completed. The high response rate (76%) is quite good, especially in view of the length of the survey. Moreover, there does not appear to be any reason to believe that the 150 respondents differ in any systematic way from non-respondents.

Sampling error for this sample size of 150 is moderate. The confidence interval is the highest at⫹/⫺ 7.8 percentage points on yes / no questions with a 50 / 50 proportional split (at the 95% confidence level). Results in which there is low variability have less sampling error; e.g., for variables with a 5 / 95 proportional split, the confidence interval is 3.41 (at the 95% confidence level).

Survey Administration and Data Collection

CSR’s interviewers used the University of California-Berkeley Computer-Assisted Survey Execution System (CASES). CASES is an interactive application that includes capabilities for sampling, online interviewing and data entry. The questionnaire, including skip logic, is programmed into the system; interviewers then read each question as it appears on the screen and directly enter the respondent’s answer (whether a numerical pre-coded response or a qualitative verbatim response) into the database. The system prevents out-of-range responses by validating each response interactively and not allowing inappropriate responses to be entered. This eliminates many routine and error-prone coding and data entry tasks, assuring a high standard of quality control.

Results

Section II of the survey shows summary statistics of the sample demographics. The principal Broker / Owner of the sample firm is largely male (67%), had an average (median) age of 54 (55) years and has been involved in the real estate profession for an average (median) of 23 (25) years. The distribution of sample firms in terms of gross sales volume is shown in Exhibit 1.

Firms in the sample have been in business for an average (median) of 20 (15) years, and currently have, on average, 14 agents (median ⫽ 7) each. The mean (median) number of agents is 12 (4), suggesting the overall sample, though slightly biased towards small firms, is reasonably representative of the population.

The first five questions were designed to assess the nature of each firm’s presence (or lack thereof) on the Internet. Results indicate that real estate firms are coming online in big numbers. Approximately 75% of Ohio real estate firms have established some sort of presence, with another 13% planning to do so within the next two years. This is consistent with the results of a 1999 survey by the NAR, which found that about 74% of the nation’s real estate firms have an Internet presence, and suggests that our sample of Ohio firms may be representative of firms at the national level. A survey earlier in the year (see Bond et al. 2000) found that only 49% of the firms in Ohio were using the Internet. Our survey therefore suggests a dramatic (50%) rise in the number of firms using the Internet during the second and third quarter of 1999.

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Exhibit 1

Firms’ Gross Sales Volume Distribution

Exhibit 2

Firms’ Use of the Internet

There are, however, significant differences in how firms are using the Internet. As depicted in Exhibit 2, of the 150 firms, 59 firms (39%) have established their own websites, while 54 firms (36%) simply provide property listings on a shared web server (or real estate portal) run by a third party (e.g., Realtor.com). Of the 59 firms that have direct presence on the Internet in the form of a company website, only 35 firms (59%; 23% of total sample) actually list their properties on their site. The company website for eight firms (14%; 5% of total sample) was purely of a promotional nature. The sites for the remaining sixteen firms (27% of firms with a

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Exhibit 3

Effects of Firm Characteristics on Internet Adoption Firm’s Age (years) Number of Agents Sales Volume ($millions) Adopters 19.3 16.3 15.7 Non-Adopters 21.5 6.2 7.8 All Firms 19.9 13.8 13.8 Significance ( P-value) 0.48 0.00 0.02

company website; 11% of total sample) were also of a promotional nature, but they included links to property listings hosted on a shared website (real estate portal) run by a third part.

It appears that 1999 was the year of the Internet for Ohio real estate firms. The firms’ websites / presence had an average (median) age of 14.8 (12) months, and almost 40% of the firms that had presence on the Internet (27%) established that presence in 1999.

Effects of Firm Characteristics on Internet Adoption

In order to examine possible factors that might influence or account for a firm’s decision to adopt Internet technology, we conducted three separate (two-tail) t-tests to see if there were signification differences in terms of average firm age, number of agents and sales volume among adopters and non-adopters (see Exhibit 3).

As expected, only the size of the firm, as measured by the number of agents or the sales volume, was a significant factor. (The two measures of firm size are significantly correlated, r⫽ .36.) The age of the firm does not appear to be an influencing factor.

Reasons and Objectives Behind a Firm’s Internet Presence

We asked each respondent to rate (on a scale of 1⫽ most significant and 5⫽ not a factor) the extent to which various reasons were a factor in his / her firm’s decision to establish an Internet presence. The reasons cited, ranked based on mean rating, were: (1) to stay current with the times (this is the way business is done today); (2) a cost effective marketing channel; (3) a vehicle to increase profits; and (4) a strategic necessity (we fear losing business). Results of an ANOVA test indicate that the differences in mean ratings across the four reasons are statistically significant (p ⬍ .001). Post-hoc, pair-wise comparison t-tests revealed no significant differences in the mean ratings for the first three reasons; mean differences with the fourth reason (fear of losing business) were, however, significant (p⬍.001). Our results therefore suggest that fear of losing business was not as important a factor in the adoption decision. In establishing their Internet presence, firms appear to have multiple objectives. Attracting new buyers was by far the most frequently (95%) cited objective. Secondary

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Exhibit 4

Internet Presence Objectives

Exhibit 5

Update Frequency (Promotional Content)

objectives such as generating new listings, providing information and advice, and promoting the company’s brand, were not as frequently cited (see Exhibit 4).

Internet Presence Development and Maintenance Practices

A majority of the firms (62%) fully outsourced the development of their website / presence. Only 11% of the sites were developed in-house. Firm size does not appear to be a determining factor in the choice of the development approach.

The frequency with which the promotional content of a website is updated varies considerably across firms (see Exhibit 5). A significant number of the firms (42.5%), however, perform daily updates of their property listings on the Internet. Exhibit 6 shows the distribution of the update frequency for property listings.

Cost-Benefit Analysis

A clear majority (65.5%) of the firms characterized their Internet presence as a success. Only 8.9% of the firms characterized their Internet presence as a failure. (The

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Exhibit 6

Update Frequency (Property Listings)

remaining 25.7% of the firms indicated that Internet presence was relatively recent and as such, they were not able to make a definitive characterization either way.) An interesting question is whether or not those sites are actually financially profitable (i.e., whether their success or failure can be assessed purely in financial terms). The results are quite affirmative in this regard.

Firms were first asked to indicate the percentage of their annual gross sales volume that is attributable to the Internet. The mean and median percentages indicated were 5.2% and 3%, respectively. In terms of dollar value, this roughly corresponds to an average of at least $594,000, with a median of $250,000. The costs involved are minuscule by comparison; the average annual cost of maintaining a firm’s Internet presence is $2,295 (median of $1,000). The average cost of the initial site setup is negligible, amounting to a mere $116 (median of $55). Investments made to establish and maintain an Internet presence appear to be yielding dividends for an overwhelming majority of the firms.

Interestingly, firms in our sample that have a website of their own reported, on average, a higher (6.5%) contribution of their Internet presence to their gross sales, compared to the 3.2% average contribution level reported by firms that simply offer property listings on a site run by a third party. A t-test revealed that those differences in the mean were indeed significant (p ⬍ .03). From a strategic point of view, this finding serves to highlight the importance of establishing a firm-specific promotional website, regardless of whether or not the property listings themselves are provided through a third party site.

Projecting into the future, firms were asked about the percentage of their annual gross sales they expect to be generated through the Internet by 2002. Firms indicated that, on average, they expect more than 21% of their annual gross sales to be generated through the Internet (median of 20%), almost a four-fold increase over current (1999) average levels. This suggests that the Internet will become even more critical for success within the next couple of years.

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Exhibit 7

Firms’ Assessment of the Internet

Strongly Disagree

Disagree Neutral Agree Strongly Agree 60% 50% 40% 30% 20% 10% 0% P ercentage of Fir ms An Opportunity A Threat

Perceptions Regarding the Internet and Its Potential Impact

A key objective of the survey was to determine firms’ perception regarding the new medium and its potential implications. In this connection, we asked respondents whether they viewed the Internet as an opportunity, a threat or both. Firms view the new medium as a business opportunity as opposed to a threat (see Exhibit 7). An overwhelming majority (79%) of the firms indicated that they believed that the Internet represents an opportunity. On the other hand, over 78% indicated that they either disagree or strongly disagree with the view that the Internet represents a threat. A series of t-tests indicate that the differences in mean ratings are indeed significant ( p ⬍ .001) for the entire sample as well as for both the adopters and nonadopters subsamples. The assessment did not differ significantly across the two groups. This interesting finding reinforces our earlier results (see Exhibit 4) regarding the reasons and objectives behind a firm’s Internet presence, where fear of losing business was clearly a secondary reason at best. Together, the results suggest that the real driver behind the push to adopt the new technology stems not from a fear of losing business to competitors, but largely from a desire to leverage the medium to attract new buyers and reduce marketing and customer acquisition costs.

Real estate agents and firms are essentially market intermediaries, connecting buyers with sellers and facilitating the real estate transaction process. That process can be divided into five distinct phases: property listing, buyer search, property evaluation, negotiation and execution / closing. To understand how the Internet might impact the real estate industry, we asked respondents to indicate the degree to which they believed the Internet will impact various steps in the real estate transaction process. Respondents indicated that buyers’ search will be impacted the most (mean response of 6.6), followed by property listings (5.4) and property evaluation (3.5). In contrast, respondents believe that the impact on the negotiation and execution steps, perhaps owing to existing legal obstacles, will be limited (mean response was 2.8 and 2.7, respectively).

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The survey also listed a number of possible difficulties or issues that may limit real estate firms’ ability to sell real estate services to consumers through the Internet, and respondents were then asked to rate each issue on a scale of 0 to 10, where 0 represents no barrier and 10 represents a major barrier to Internet selling. The issues listed, together with associated mean ratings, are: concerns regarding security and privacy on the part of consumers (4.4); consumer preference to use traditional; i.e., non-online, methods (5.0); legal and regulatory issues (4.9); technology itself (4.0); cost of constructing and maintaining the Internet platform (4.5); lack of qualified technical human resources (5.4); and lack of integration between the Internet and existing business processes (5.4). The differences in mean ratings were not statistically significant, however, suggesting that all the issues are believed by industry insiders to constitute barriers to online selling of real estate services today.

Conclusion

Real estate firms have found a home online. There has been dramatic (50%) rise in the number of firms using the Internet during the second and third quarter of 1999. Approximately 75% of the firms surveyed have established some sort of presence on the Internet, with another 13% planning to do so within the next two years. The dramatic rise in adoption rates in 1999 is consistent with the diffusion of innovation theory (Rogers, 1985), according to which the distribution of adopters over time is expected to follow a bell-shaped curve. There are, however, notable differences in how firms are using the new medium, with property listing through a third party site being the principal form of use of the Internet by real estate firms at the time of this study. Roughly 47% of all firms in the sample (61% of firms using the Internet) list their properties through a third party site; only 23% of the firms in the sample (11% of firms using the Internet) list their properties on their own website.

The analysis shows that the size of the firm (measured both in terms of both gross sales and number of agents) is a key determinant as to whether the firm has presence on the Internet. This is consistent with various studies showing that small real estate firms like small businesses, in general, tend to be slower in embracing new information technologies (MacGregor and Bunker, 2000).

A clear majority (65.5%) of the firms characterized their Internet presence as a success, and our analysis of the results indicates that those sites are contributing significantly to firms’ gross sales, more so to firms that have a firm-specific promotional website compared to firms that only provide property through a third party website (6.5% vs. 3.2%). Thus, firms with their own websites are able to derive more value from this technology. However, it is not clear whether the sales attributed to the Internet are in fact incremental. To the extent that they are indeed incremental, the Internet is yielding handsome dividends to current adopters. Theory, however, suggests that this may not last as technology alone is not likely to be a source of sustainable competitive advantage, owing to imitation by competitors and almost universal technology adoption in the marketplace within the next few years (Barney, 1991; and Clemons and Row, 1991).

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Interestingly, the results suggest that the real driver behind the push to adopt the new technology stems not from a fear of losing business, but largely from a desire to leverage the new medium to attract new buyers and reduce marketing and customer acquisition costs. Firms, by an overwhelming margin, currently view the Internet as a business opportunity. Few believe that the new medium represents a threat. At the same time, firms report that they expect a substantial increase in the amount of business coming through the new channel. We believe that firms may be underestimating the potential of the new medium to threaten the existing order and reshape the real estate industry. Real estate agents and firms are essentially market intermediaries, connecting buyers with sellers and facilitating the transaction process. This is done through the exclusive control and dissemination of information (e.g., using the Multiple Listing Services). Yet, as Baen and Guttery (1997) notes, it is precisely this sort of structure that is most likely to be challenged by the emergence of an open medium such as the Internet that enables information sharing and the bypassing of traditional information intermediaries. Specifically, if buyers and sellers can find one another (e.g., using an online FSBO service such as owners.com) and if specialized cybermediaries can furnish the information needed to affect the transaction more cheaply and conveniently, then the value traditionally added by the real estate agent will erode, depressing commission rates. The prospect of intensified price competition in the real estate services market is emerging as more than a theoretical possibility. HomesThatClick.com, a new fully-licensed, online real estate broker in the Midwest, already enables homeowners to list, market and sell their homes for as little as a 2% commission. In sum, going online will increasingly become a strategic necessity for real estate firms, a form of ‘‘pre-emptive cannibalization.’’ And as technology makes the traditional information aspects of the real estate services market contestable (Baumol, Panzar and Willig, 1988), firms may need fewer, but more highly qualified agents who can provide professional guidance and other value-added services to clients, while leaving commodity-type services to technology.

References

Baen, J. S. and R. S. Guttery, The Coming Downsizing of Real Estate: Implications of Technology, Journal of Real Estate Portfolio Management, 1997, 3:1, 1–18.

Baumol, W. J., J.C. Panzar and R. D. Willig, Contestable Markets and the Theory of Industry Structure, New York: Harcourt Brace Jovanovich, 1988.

Barney, J., Firm Resources and Sustained Competitive Advantage, Journal of Management, 1991, 17:1, 99–120.

Bond, M. T., M. J. Seiler, V. L. Seiler and B. Blake, Uses of Websites for Effective Real Estate Marketing, Journal of Real Estate Portfolio Management, 2000, 6:2, 203–10.

Clemons, E. and M. Row, Sustaining IT Advantage: The Role of Structural Differences, MIS Quarterly, 1991, 15:3, 275–92.

MacGregor, R. C. and D. J. Bunker, A Comparison of Real Estate Brokers’ Computer Training Needs with other Small Business Sectors: An Australian Perspective, Journal of Real Estate Practice and Education, 2000, 2:1, 13–32.

National Association of REALTORS䉸, REALTORS and the Internet: The Impact of Online Technologies on the Real Estate Industry, July 1999. (http: / / www.onerealtorplace.com / online.nsf / ).

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Reichert, A. K. and J. K. Lange, Information Technology and the Production and Delivery of Real Estate Brokerage Services, Research Report No 65, Center for Real Estate Education and Research, the Ohio State University, July 1999.

Rogers, E. M., Diffusion of Innovations, New York: The Free Press, 1985.

The author wishes to acknowledge support from the Center for Real Estate Education and Research at Ohio State University and thank the anonymous reviewers for comments that helped improve the manuscript.

Appendix

Real Estate Industry Survey

Part I: Company Use of the Internet

1. Does your firm have its own website? (please check one)

▫ Yes (go to Question 5) 59 (39%)

▫ No 91 (61%)

2. Do you offer property listings through a website that is run by a third party?

▫ Yes (go to Question 6) 54 (36%)

▫ No 37 (25%)

3. Please check the reason(s) for your firm’s lack of presence on the Internet at this time. (check all that apply)

▫ Websites are too expensive for us to maintain. 8 (21%)

▫ We had a site in the past, but it failed to generate

sufficient business. 1 (3%)

▫ We do not have a good understanding of websites

and how to maintain them. 13 (35%)

▫ We cannot see the benefits of using a website. 19 (51%)

▫ We plan to have one in the future. 19 (51%)

▫ Other. (please specify: ) 2 (6%)

4. Do you plan to develop some sort of web presence in the next 2 years?

▫ Yes (go to Question 17) 19 (51% of the 37 who do not have presence; 13% of sample)

▫ No (go to Question 17) 13 (35%; 9%)

▫ DK (go to Question 17) 5 (14%; 3%) 5. Would you say that your firm’s website is used . . .

▫ Simply for company promotion. (go to Question 7) 8 (14%)

▫ For promotions but also includes links to property

listings on a real estate site run by a third party. 16 (27%)

▫ For company promotion and to provide property

listing—all in one site. (go to Question 7) 35 (59%) 6. What is the name of that third party website or organization?

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7. How did you develop your website / presence?

▫ Fully outsourced 70 (62%); 31 of those with own presence (53%); 39 (72%) other

▫ Partially outsourced 23 (20%); 20 (34%); 3 (6%)

▫ In-house 12 (11%); 6 (10%); 6 (11%)

▫ DK 7 (6%); 2 (3%); 5 (9%)

8. How many months has your site / presence been operational? (months)

Responses: mean (std)

Firms with own Internet presence: 16.4 (12.2) months

Firms with presence only through a third party: 12.5 (8.9) months All: 14.8 (11) months

9. If your firm runs its own website, how often is the site’s promotional content updated? ▫ Daily 8 (13.6%) ▫ Weekly 11 (18.6%) ▫ Bi-weekly 7 (11.9%) ▫ Monthly 7 (11.9%) ▫ Quarterly 5 (8.5%) ▫ Semi-annually 5 (8.5%) ▫ Annually 6 (10.2%) ▫ Never 4 (6.8%) ▫ DK 5 (8.5%) ▫ RF 1 (1.7%) Total 59 (100%)

10. How often does the firm update its property listings on the Internet?

▫ Daily 48 (42.5%) ▫ Weekly 26 (23%) ▫ Bi-weekly 9 (8%) ▫ Monthly 10 (8.9%) ▫ Quarterly 2 (1.8%) ▫ Semi-annually 0 (0%) ▫ Annually 0 (0%) ▫ Never 0 (0%) ▫ DK / NA 17 (15%) ▫ RF 1 (0.9%) Total 113 (100%)

11. Costs: (Please provide approximate responses in dollars.)

A. What were your company’s initial website development or setup costs? $

Firms with own Internet presence: $126 (177)

Firms with presence only through a third party: $66 (57) All: $116 (166)

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B. What is the approximate annual cost of maintaining your Internet presence (not including labor hours)? $

Firms with own web presence: $925 (1,123)

Firms with presence only through a third party: $349 (371) All: $728 (971)

C. What is the annual labor cost of maintaining your Internet presence? $

Firms with own Internet presence: $2,303 (3,157) Firms with presence only through a third party: $42 (44) All: $2,020 (3,043)

D. How much did your firm spend on its Internet presence during last year? $

Firms with own Internet presence: $2,502 (3,307)

Firms with presence only through a third party: $1,591 (1,882) All: $2,295 (3,047)

E. How much does your firm plan to spend annually on its Internet presence during the next three-year period? $

F. How much does your firm currently spend on information technology in general (i.e., what is its total IT budget)? $

12. Revenues:

What percentage of your annual gross sales volume would you attribute to the Internet? %

Firms with own Internet presence: 6.5% (7)

Firms with presence only through a third party: 3.4% (5) All: 5.2% (6.4)

What percentage of your annual gross sales do you expect to be generated through the Internet by 2002? $

Firms with own Internet presence: 23.6% (16.7)

Firms with presence only through a third party: 19.2% (20.1) All: 21.6% (18.3)

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13. What is the objective of your Internet presence? (please check all that apply)

▫ Promote company’s brand 72 (64%)

▫ Generate new listings 88 (78%)

▫ Attract buyers 107 (95%)

▫ Provide information and advice 84 (74%)

▫ Cut transaction costs 31 (27%)

▫ Other 8 (10%)

14. On a scale of 1 to 5, to what extent each of the following reasons was a factor in your firm’s decision to establish presence on the Internet? (please rate each reason in the space provided)

Significant factor⫽ 1 2 3 4 5⫽ Not a factor at all We see this as a strategic necessity (we fear

losing business) 2.46 (1.5)

We see it as a cost effective marketing channel 1.94 (1.14)

To increase profits 2.20 (1.31)

To stay current (this is the way business is

done today) 1.45 (0.96)

Other (please specify: 1.6 (0.49)

15. Overall, would you characterize your Internet presence as either a success or failure?

▫ Success 74 (65.5%)

▫ Failure 10 (8.9%)

▫ D / K 25 (25.7%)

16. Of the following factors, please indicate all those you believe contributed to the success / failure of your firm’s Internet presence? (check all that apply)

▫ Great / Insufficient knowledge of the Internet and its

techniques 32 / 10

▫ Enough / Inadequate financial means to develop effective

presence 57 / 1

▫ Great / No Cooperation with the main players (Microsoft

Advisor, Realtor.com, etc) 54 / 10

▫ A large / Not enough visitors or business on the Internet or

not enough visitors 43 / 10

▫ Others (please specify: ) 26 / 0

17. Are you familiar with the following real estate websites? (check those you are familiar with)

▫ HomeAdvisor.com 43 (29%) ▫ LoopNet.com 14 (9%) ▫ CyberHomes.com 57 (38%) ▫ Realtor.com 133 (89%) ▫ HomeShark.com 16 (11%) ▫ RealEstate.com 60 (40%) ▫ Owners.com 13 (9%)

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18. How do you perceive the Internet? (please rate on a scale from 1–5) Strongly Agree⫽ 1 2 3 4 5 ⫽ Strongly Disagree

A. Your firm views the Internet as a business opportunity. 2.08 (0.97) B. Your firm views the Internet as a threat. 3.86 (1.01) 19. Please indicate the degree to which you believe each of the following steps in the real estate transaction process will be impacted by the Internet?

(Rate on a scale of 0–10, where 0 represents no effect, and 10 represents a strong impact). 5.4 (2.8) Property Listing 6.6 (2.5) Buyer search 3.5 (2.7) Property Evaluation 2.8 (2.6) Negotiation 2.7 (2.2) Execution / Closing

20. Please indicate the degree to which you believe each of the following represents a barrier to selling real estate services to consumers through the Internet? (Rate on a scale of 0–10, where 0 represents no barrier, and 10 represents a major barrier).

.4 (3.2) Consumer concerns for security and privacy 4

5.0 (2.7) The majority of consumers prefer to use traditional (i.e., nononline) methods

4.9 (3.0) Legal / Regulatory issues 4.0 (2.9) Technology itself

5.4 (2.9) Lack of qualified technical human resources

5.4 (2.5) Lack of integration between the Internet and existing business processes

4.5 (2.7) Cost of constructing and maintaining the platform

Part II—Background Information

1. Firm PB / Owner’s Age:⬍30 (0) 30–39 (6) 40–49 (36) 50–59 (64) 60⫹(41) (3 unspecified)

2. Firm PB / Owner’s Gender: Males⫽100 Female⫽49 (1 unspecified) 3. Number of years involved in the real estate profession: 24 (7); median

⫽ 25 years

4. Which of the following best approximates the title of your position?

▫ Chairperson / President / Owner 95 (63%)

▫ Principal Broker 23 (15%)

▫ IS Director or Manager 21 (14%)

▫ Other 11 (7%)

5. What is your firm’s gross sales volume during the last fiscal year?

▫ under $100,000 (8%)

▫ $100,000–$499,000 (9%)

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▫ $1 M–$1.49 M (3%) ▫ $1.5M–$4.99 M (25%) ▫ $5 M–$9.99 M (17%) ▫ $10 M–$49M (26%) ▫ $50M–99 M (0%) ▫ over $100 M (5%)

6. How many Agents are affiliated with your firm? 13 (29); median ⫽ 7 7. How long has your firm been in Business? 20 (16); median ⫽ 15