Analytics and the Future of Home Buying

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by Alexander J Boughton

Home buying is never an easy process. It helps to have a highly professional real estate agent to guide you through it. Big data, technological trends and modifications in consumer shopping are changing and evolving the process we use to find a home. Is this a good thing for Millennials?

A decade ago if someone were to mention Zillow, a majority of people probably never heard of it. Today, an overwhelming majority of tech-savvy adults are at least aware of some of the different options which include Zillow, Trulia, Redfin, Google and Amazon.

As a 25-year-old, I see my fair share of friends getting excited about the prospects of investing in the real estate world; trading in their rental properties for their first affordable condos or homes. Research on buying trends indicates a 3 to 1 ratio to renting over buying a home. For those ready to buy, much needs to be known before making one of life’s biggest investments.

For example, big data through popular real estate sites like Zillow, Trulia or Realtor.com is one of the first mediums most homebuyers will use to start their search. Unlike older generations who relied on word of mouth, local listings and limited on-line consumer data, current on-line websites and buying methods seem to dismiss realtors and take away the “soul” of the home buying process. Who is going to create a fluid sales process for the property or help the buyer win when there are multiple offers? Big data also has difficulty keeping current with actual home values. Unless a home has been properly appraised, many of the sites rely on old tax records and algorithmic data based on comps for sale (which may or may not be accurate) in the area to determine home values. If you’re an out-of-state home buyer or an international buyer, consider doing proper research and site visits to the property and its neighborhoods.

From a cultural standpoint, many Millennials tend to be impulsive shoppers, even when it comes to purchasing their home. We don’t always have realistic expectations about what we can afford or what goes into the making of a purchase. While its true technology makes it easier to learn about properties across the street or around the world, it does not necessarily mean my generation knows how to assimilate that knowledge. How do we solve this as future home buyers or sellers?

It should start with reading the fine print. A lot of us tend to overlook the details of a contract. We don’t do proper research or we do too much research. Do your due diligence ­– read over the paperwork, research comparable properties and validate if what’s being offered at the property is true.

When trying to buy a home, it may still offer more value to work with a reliable full-time realtor who knows the local market instead of a virtual agent. After all, buying your first home should be an exciting time, not a trying time. Why go it alone when you can hire a professional who is happy to make your dream home a reality?