The Technology Factor: A Dynamic Boosting the Housing Market

The Technology Factor: A Dynamic Boosting the Housing Market

Reported by:

Bruce Schroder, CEOHomeGain, Inc.

HomeGain, Inc.1250 45th Street, suite 200

Emeryville, CA 94608www.homegain.com

A new study shows how an overlooked factor—technology—has given an added boost to the hot real estate market. Markedly increased exposure for homes, homebuying effi ciency, industry productivity and consumer time and cost savings—all brought on by technology—are coming together to bring greater effi ciency to the market, decrease risk for consumers and improve the general velocity of sales.

2Study: The Technology Factor

© HomeGain, Inc. 2002

Executive Summary

Following nine unabated years of a booming real estate market, 2002 is shaping up to be another record year for home sales. The National Association of REALTORS® is forecasting that a record 5.43 million existing homes will be sold this year. Another 900,000 new homes will close in 2002. In the fi rst four months of this year, the market had the four strongest monthly home sales rates on record.

Some basic fundamentals help to explain in large part the surprising strength of the market. Mortgage rates are at historic lows. There’s a lean supply of homes, and several factors are driving demand. The boomer generation is in their peak earning years, and a poor performing stock market has given rise to a signifi cant demand for homes for investment purposes. Alan Greenspan recently predicted that immigration, a lack of available land and low interest rates will continue to fuel the housing market and the overall economy. But for all of these factors, there is an often-overlooked piece of the puzzle that is contributing to the strength of the market.

A new study shows how an overlooked factor—technology—has given an added boost to the hot real estate market. Markedly increased exposure for homes, homebuying effi ciency, industry productivity and consumer time and cost savings—all brought on by technology—are coming together to bring greater effi ciency to the market, decrease risk for consumers and improve the general velocity of sales.

Technology Creates a More Effi cient Real Estate Market

Internet exposure of home listings has not only given the average home global exposure but deep penetration locally, creating a more robust and effi cient marketplace and accelerating the pace of home sales. Publishing listings and comparables has created the “Madonna” effect (a widespread multi-media experience) and made house hunting a new media experience as people surf the Web for their dream homes. According to the HomeGain survey, eighty-one percent of sellers who used the Internet for some portion of their home sale had their homes advertised on the Internet, and seventy-four percent of buyers saved time viewing home listings online.

Web Consumers See Cost Savings

Consumers are saving time by using the Internet and relying on REALTORS® who do, and as a result, costs are coming down for homebuyers and sellers who use the Internet, and productivity is rising. Over one-third of Internet home sellers saved 1⁄2 percent or more on the commission paid to their REALTOR®. Internet consumers are more informed at the beginning of

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a transaction, and as a result, require less of their REALTOR®’s time and expertise, which gives them room for negotiation. Still other consumers opt for money savings by performing some functions previously handled by REALTORS® themselves.

REALTORS® Who Use Technology Are Handling More Transactions

Top-producing and technology-fi t REALTORS®, who are the central driver of the transaction, are picking up more and more marketshare as they use technology to manage functions that previously required more hand holding or paper fl ow. Thirty-one percent of REALTORS® said that technology has signifi cantly increased their volume of closed transactions. This has allowed the best and the brightest to handle transactions more effi ciently, resulting in more satisfi ed consumers, while increasing the volume of transactions they’re able to handle.

Technology Accelerates the Pace of Home Sales

The use of technology to increase productivity has compressed the average time of a home sale, most notably the front-end of the transaction. On average, days from list-to-contract have been cut by as much as 40 percent by Web users. Homebuyers use the Web to cut short their home search and in turn reduce the effort spent by REALTORS® showing houses. Sellers who gain a realistic idea of their home’s worth speed the front-end portion of the transaction from list to contract. Web-savvy consumers have more realistic expectations, which lead to more accurate pricing and ultimately results in a faster and more effi cient transaction.

Consumers Reduce Risk with Use of Technology

Consumer risk in the homebuying process has been greatly reduced as homebuyers and sellers use the power of information on the Web to make better choices earlier about such factors as how to price the home right, set expectations about affordability, understand the range of choices for homes, loans and make a more informed REALTOR® selection. Consumers who arm themselves with knowledge about the sales process can overcome their lack of experience, lower their chances of making a poor investment decision, and enter into the transaction with confi dence. Half of buyers said that use of the Web increased their comfort level for buying a home by 50 percent.



Key fi ndings from the June, 2002 survey of more than 658 online users:

ConsumersExposure:

• 81 percent of sellers who used the Internet for some portion of their home sale had their homes advertised on the Internet.

• 36 percent of sellers said that the Web signifi cantly increased their home’s exposure.Time:

• 74 percent of buyers saved time viewing home listings online.• 94 percent of sellers said that fi nding and comparing REALTORS® online saved them

time during their real estate transaction. • 59 percent of sellers said that email correspondence with their REALTOR® saved them

time during the transaction.• 39 percent of sellers said that getting online sales comparables contributed to a

quicker transaction.• 39 percent of sellers said the Internet decreased their personal time spent on the

transaction by 30 percent or more.• 28 percent of sellers said the Internet decreased the transaction time by 30 percent or

more.• Web users cut the days from list to contract by as much as 40 percent.

Costs:• 22 percent of sellers said that the Internet saved them commission dollars.• 36.5 percent of sellers paid a 5.5 percent commission or less.

Risk:• 50 percent of buyers said that use of the Web increased their comfort level for buying

a home by 50 percent.

REALTORS®:Productivity:

• Almost half of REALTORS® said the Internet and email have signifi cantly increased their productivity.

• 31 percent of REALTORS® said the Internet and email have signifi cantly increased their volume of transactions.

Competency:• 45 percent of REALTORS® said the Internet and email have dramatically improved the

quality of service they provide to clients.

Relevant data: CAR data: 79% of Internet buyers found their real estate REALTOR® online.Media Metrix: Traffi c to online real estate websites—25 million unique visitors a month



Table of Contents

Executive Summary 2

I. Exposure: Technology Creates More Effi cient Real Estate Market 6

II. Costs: Web Consumers See Cost Savings 8

III. Productivity: REALTORS® Who Use Technology Are Handling More Transactions 10

IV. Time: Technology Accelerates the Pace of Home Sales 11

V. Risk: Consumers Reduce Risk with Use of Technology 13

VI. Conclusion 15

VII. Survey Respondent Demographics 16

Appendix 17

News release

About HomeGain

Survey Methodology

Buyer survey

Seller survey

Agent survey



I. Exposure: Technology Creates More Effi cient Real Estate Market

Internet exposure of home listings has not only given the average home global exposure but also deep penetration locally, creating a more robust and effi cient market place and accelerating the pace of home sales. Publishing listings online has created the “Madonna” effect (widespread multi-media experience) and made house hunting a new and very successful media experience as people surf the Web for their dream homes.

In 1996, a limited version of the MLS was put up on the Internet through a variety of local and national companies. Today, consumers can tap nearly all homes for sale throughout the country. The accumulative traffi c on these sites approaches 25 million unique visitors a month, according to Media Metrix. Never has the real estate market received such deep and systematic exposure.

Homebuyers

Listings on the Internet have proven to be one of the most valuable features on the Web, with 41 percent of all homebuyers starting their home search on the Internet, according to the latest survey of buyers and sellers by the National Association of REALTORS®.

Not only has the Web broadened the geographical real estate market well beyond the circulation reach of local newspapers, but it offers online property listings that are deep and rich and include multiple fi elds of data, often with pictures and even virtual walkthroughs. Online listings offer the added benefi t of timelessness that print publications cannot match. At a very early stage, the buyer benefi ts from a much richer understanding of both the market and individual properties.

This early stage of sifting and sorting of home choices serves to better market individual properties, screen out non-serious buyers that drain REALTORS®’ time and to build serious buyer confi dence.

It is growing diffi cult to recall the days when newspaper ads, open house signs and magazines at shopping centers were the only pre-REALTOR® information option for consumers to understand the real estate market and identify prospective homes.

While economics drive a large part of the motivation and willingness to buy a home, marketing has always played a role in promoting homeownership in this country. From the Federal Government’s drive to settle the West with the Homesteading Act to the tales of the modern

“Once we input our buying criteria, we received new listings every other day, and ended up buying a home twice the size of our existing home within a month. When we bought our fi rst home 10 years ago, we visited about 60 homes, but this time we only had to see 15. The time savings was signifi cant because we saw pictures and virtual tours of homes and neighborhoods, making it easy to narrow down our search.”

— Taylor and Elaine Duderstadt, homebuyers, Atlanta, GA

“The most valuable part of using the Internet for me was looking at tax data on homes in the areas that interested me. Understanding home values in each area saved me a lot of time in the buying process.”

— Merri Jensen, fi rst time buyer,Raleigh NC



time-share movement, marketing boosts home sales.

Measured by Web exposure, technology has allowed real estate to touch more buyers than ever before. And instead of the industry bringing the customer to the property, technology brings the property to the customer. This has not only changed the relationship between the REALTOR® and the homebuyer, it has created early enthusiasm along with more realistic expectations.

This trend accounts for the statistics from the California Association of REALTORS®

(CAR) study, which shows that Web homebuyers visit 7.5 homes versus 15.2 for traditional buyers.

Also, a Web-based search eases the frustrations of

homebuying and reduces the time it takes to sort out choices, such as traipsing around to open houses. According to the CAR survey, Web buyers virtually eliminated or at a minimum aggressively qualifi ed the open house trips (only 2 percent of buyers) as a way of fi nding a home, and buyers no longer drive around looking for “for sale” signs (only 2 percent of buyers). Before the Web, open houses and drive-arounds were a tried, tested but tedious method for scouting out the housing market. Thirty-three percent of all non-Internet home shoppers still use these two techniques for shopping, according to the CAR study.

Home Sellers

The value of market exposure is not lost on sellers. The growing use of the Web as a marketing tool has gotten the attention of home sellers who increasingly are requesting that their REALTORS® list their home on the Web.

In the past, newspaper advertising was the standard bearer for real estate promotion; today the Web has surpassed that option.

According to the HomeGain survey, a total of 81 percent of sellers who used the Internet for some portion of their home sale had their homes advertised on the Internet. Moreover, 88 percent of REALTORS® offer online listings to clients.

Sellers also see the results of Internet exposure. Of those home sellers whose REALTOR®

used the Internet to sell their homes, 36 percent said that the Web “signifi cantly increased their home’s exposure,” according to the HomeGain survey.

Relevant data: HomeGain data: 88 percent of REALTORS® offer online listings to clients.NAR data: 56 percent of buyers found searching the Internet for a home valuable.CAR data: Previewing homes online was the most important tool by 46 percent of all Internet

buyers.

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II. Costs: Web Consumers See Cost Savings

Consumers are certainly saving time by using the Internet and relying on REALTORS® who do, and as a result, costs are coming down for home sellers who use the Internet.

• 22 percent of sellers said that the Internet saved them commission dollars, according to the HomeGain survey.

• 36.5 percent of sellers saved at least 1⁄2 percent by paying a 5.5 percent commission or less.

The Internet provides a medium for the discussion of commission between the consumer and the REALTOR®.

Consumers can go online and research multiple REALTORS®’ sales experience, recent local sales, and choose the best REALTOR® for them, and have the option of negotiating a lower commission because of the competitive nature of online REALTOR® selection. Some sellers come to the Internet looking for a reduced commission because they are in a hot market and think their home will sell without much effort, have already performed much of the up-front research on the value of their home, or are more comfortable negotiating anonymously with a REALTOR® via email, rather than in a face-to-face setting.

“I wanted to pay a lower commission for a house that would sell itself, so I hired an REALTOR® on the Internet who was willing to do an ‘a la carte’ type of contract. They didn’t show the home but the fi rst couple brought in by the buyer’s REALTOR®

bought the house after only two weeks on the market. The process saved me time and money.”

— Mireille Torjman, home seller, Atlanta, GA

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Still other Internet consumers opt for a limited service option to pay their REALTOR® a lower commission, holding open houses and creating their own brochures, reserving their REALTOR®

for more the more complex portions of the transaction, including buyer negotiations and contract work with the title company.

FSBO sellers who want to sell their home without the services of a real estate professional use the Internet to get a home price estimate and sales comps to set a market price.

Some REALTORS® are willing to reduce their commission in exchange for working with a highly informed client who will save them time during the transaction. According to the CAR study, Internet consumers visit an average of 7.5 homes, vs. 15 homes for traditional buyers.

Relevant data: HomeGain data: One-third of sellers saved at least 1⁄2 percent by paying a 5.5 percent commission or

less.CAR data: 48 percent of Internet buyers were satisfi ed with the value received for what they

paid, vs. 36 percent of traditional buyers.



III. Productivity: REALTORS® Who Use Technology Are Handling More Transactions

On the whole, REALTORS® have been adopting technology at a furious pace. According to the HomeGain survey, 95 percent of REALTORS® use the Internet to generate leads; 81 percent maintain their own websites and 30 percent use email for a majority of their client communication. By creating and maintaining a Web presence, Internet REALTORS® benefi t from making contact with consumers at a very early stage in the homebuying or selling process.

The results are paying off for tech-savvy REALTORS®, according to the HomeGain survey:

More than just leads, many REALTORS® say that their productivity and sales volume has increased:

Agents Increased their Transaction Volume

30 percent+ of transactions in the fi rst half of 2002 were a result of Internet leads.

39 percent

More than 50 percent of their transactions in the fi rst half of 2002 were a result of Internet leads.

12 percent

They’ve closed signifi cantly higher percent of Internet transactions in 2002 compared to the same period in 2000.

32 percent

Agents Increased their Productivity

The Internet and email has lowered or signifi cantly lowered their client acquisition costs.

48 percent

The Internet and email have signifi cantly increased their productivity.

48 percent

The Internet and email have signifi cantly increased their volume of closed transactions.

31 percent

“I prefer to work with Internet clients because they’re ready to list or buy immediately. The average list time for sellers is two weeks, and one recent buyer went into contract on a home in one week.”

— MaryAnn Morrar, REALTOR®,Fremont, CA

Relevant data: HomeGain data: Almost half of real estate REALTORS® said the Internet and email signifi cantly

increased their productivity.CAR data: Internet buyers spent one-third of the time traditional buyers did in the search process

with a REALTOR®

NAR data: Nearly seven out of 10 homebuyers used a real estate REALTOR® as an information source for their home search.



IV. Time: Technology Accelerates the Pace of Home Sales

As illustrated, technology has led to marked increases in the market exposure of homes, has improved industry productivity by allowing REALTORS® to manage time-consuming functions and close more transactions, and substantially reduced risk for consumers. But technology has been largely overlooked as a signifi cant contributor to the robust real estate market.

Why? Because little empirical research has been done on the issue. The surprising reality is that technology plays a much larger role than previously realized.

Home Sellers

The immediate tangible impact that technology has on the real estate market is that it dramatically accelerates the pace of home sales. Based on a sampling of approximately 2,000 seller transactions to close at HomeGain in the fi rst six months of 2002, the average time of a home sale has been accelerated by more than 40 percent for those using Internet-related services. This is evidenced by the fact that HomeGain transactions had an average time from list to contract of 19 days with an average time from list to close of 60 days.

In stark comparison, the average time on the market for homes researched through MLS data for the fi rst six months of 2002 was much higher. In Dallas, the average time from list to contract was 36 days, and the average time from list to close was 67 days. In Chicago, the average time from list to contract was 29 days and the average time from list to close was 80 days.

For real estate professionals, technology tools that resulted in signifi cant timesavings for the front-end phase of the transaction in particular include online lead generation and email correspondence of home listings and general client communication. Factors that are relevant to consumers include speed and quality of online REALTOR® selection, technology tools used to communicate and consummate a transaction and Internet exposure of listings.

Online vs. Offl ine Days on Market

Offl ine Home Purchase Front end (list to contract) Back end (list to close)

Dallas 36 67

Chicago 29 80

Online Home Purchase

National 19 60

Timesavings 40% 19%

On average, days from list-to-contract have been cut by as much as 40 percent by Web users.



This data illustrates that transactions where technology was employed occur on an accelerated timeline. Consumers who devote time to becoming informed about the process have more realistic expectations and are ready to transact by the time they meet with a REALTOR®. Other signifi cant factors infl uencing this are the availability of online home valuations and nearby sales comparables, helping sellers to gain a realistic idea of the market price of their home, and the vast exposure that online advertising gives home listings to potential buyers.

“If an online consumer contacts me, they’re sold, qualifi ed and ready to go, because they’ve already done a lot of comparison shopping.”

— Diane Varni, REALTOR®,Woodbridge, VA

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Relevant data: HomeGain data: Thirty-nine percent of sellers said that getting online sales comparables contributed to

a quicker transaction.NAR data: First-time Internet buyer’s time from contract to close was fi ve weeks, which was the

same for a repeat buyer.CAR data: The number one reason why Internet buyers were satisfi ed with their REALTOR® was

that they were “always quick to respond.”



V. Risk: Consumers Reduce Risk with Use of Technology

HomebuyersThe real estate industry has always been challenged with removing buyer’s remorse, which can kill home sales, self-disqualify buyers from the market and contribute to waning REALTOR® patience. As consumers increasingly use online real estate tools including property listings, home valuation tools and a growing array of decision support tools, the Internet lowers the risk of indecision, giving consumers greater confi dence and, ultimately, satisfaction with their REALTOR®.

Fear and loathing are common reactions people face when making the biggest purchase of their lives. Large mortgage debt, a move from a familiar home or neighborhood to a strange place, and being faced with mounds of paperwork gives almost anyone heartburn.

A combination of tools, data bases and advice is making consumers more educated but also more comfortable with the homebuying process. Calculators on affordability, editorial support explaining the process, home listings, and property comps are easing the pain of homebuying by making consumers more informed and better equipped to deal with all aspects of the process. Fifty percent of the buyers surveyed in the HomeGain study said that use of the Web increased their comfort level for buying a home by 50 percent.

Because homebuying is an infrequent transaction–every 7 to 11 years–consumers feel less confi dent in the process. Online information, Web anonymity and instant electronic answers to common questions ease homebuying anxiety and remove some of the

psychological and emotional barriers to this big investment. Consumer confi dence rises, putting people in a better position to make a decision.

Homebuying has traditionally been a time-consuming process. Again, the Web offers timesaving relief by enabling potential buyers to compare communities, and narrow down their selection of homes before stepping out their door. In the HomeGain survey, 74 percent of the buyers surveyed “saved time” viewing home listings online.

Home Sellers

Home sellers have also seen their confi dence boosted by the Internet.

“I went online for an REALTOR® because my husband and I both have full time jobs, three small children, and no free time to shop around and sit on the phone doing interviews,” said Elizabeth. “I was able to state my needs, which were sent to local REALTORS®, who then responded to my request.”

— Elizabeth and Robert Crews, homebuyers, Buena Park CA

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Ninety-four percent of sellers surveyed said that fi nding and comparing REALTORS® online saved them time during their real estate sale. REALTORS® said that home sellers who shop for services on the Web are more confi dent in the market, making for an easier and less painful home selling experience. Forty-fi ve percent of REALTORS® say the Internet and email has dramatically improved the quality of their customer service.

Technology Tools that Save Consumers Time

• 59 percent of sellers said that email correspondence with their REALTOR® saved them time during the transaction.

• 39 percent of sellers said that getting online sales comparables contributed to a quicker transaction.

• 39 percent of sellers said the Internet decreased their personal time spent on the transaction by 30 percent or more.

• 28 percent of sellers said the Internet decreased the transaction time by 30 percent or more.

• 52 percent of buyers said that their use of the Internet reduced their personal time by at least 30 percent.

• 59 percent of buyers said that their use of the Internet reduced the total transaction time by at least 30 percent.

“Almost 80 percent of the transaction was handled via e-mail between myself and my REALTOR®. It worked well because of the different time zones, and our REALTOR® was very responsive.”

— Daniel Jones, home seller,Sacramento, CA

Relevant data: HomeGain data: Half of the buyers surveyed in the HomeGain study said that use of the Web

increased their comfort level for buying a home by 50 percent.CAR data: 97 percent of Internet buyers were satisfi ed with the process of fi nding a home on the

Internet.NAR data: 56 percent of buyers said they found searching for a home on the Internet extremely

valuable.

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VI. Conclusion

The Technology Factor is one of many factors currently infl uencing the country’s robust housing market. Limited availability of property, low interest rates, the impact of immigration, and a poor performing stock market are all factors, but these factors do not add up to explain why the housing market hasn’t softened despite the general economic downturn.

Consumers who have used the Internet to purchase or sell a home have a better understanding of its impact on real estate. The full benefi ts for both REALTORS® and consumers adopting the Internet at warp speed are fi nally being realized as productivity and business processes are being improved and consumers are realizing that the personal experience of buying a home takes less time, involves less risk, and is less agonizing when utilizing technology.Additionally, the media exposure of listings is that they identify more home sale opportunities to homebuyers and create more enthusiasm about buying.

Instant online sales comparables have taken on a similar, but nonetheless signifi cant role for home sellers interested in determining the value of their home. Sales comps and listings possess the media components of reach, frequency and relevancy to consumers, and helps them to form realistic expectations about their sale or purchase. The result is a more effi cient and speedy transaction, with more informed parties on both sides.

Technology is a signifi cant factor behind the sustained growth in home sales, despite the general economic downturn.

“We relocated to Milwaukee before selling our home, so being able to use the Internet for information and e-mail to communicate with our REALTOR® was invaluable. We met our objective of selling our house at a very good price that exceeded our expectations for the value of the property.”

— Mike Brooks, home seller,Milwaukee, WI



VII. Survey Respondent Demographics

Buyers

Age breakdown:

25-30 26.3%31-36 31.6%37-42 10.5%43-49 19%50-55 12.6%

Size of recent home purchase:

$75,000-$150,000 59%$151,000-250,000 14%$251,000-350,000 10.5%$351,000-450,000 10%$450,000+ 6.5%

Sellers

Age breakdown:

25-30 9.4%31-36 20%37-42 28%43-49 18.8%50-55 23.5%

Size of recent home sale:

$75,000-$150,000 42.5%$151,000-250,000 42.5%$251,000-350,000 8%$351,000-450,000 5.7%$450,000+ 1.1%



News Release

Media Contacts:

Cathy Harrington Mindy Smyth HomeGain 415-505-8393(510) 655-0800, ext. 4188 [email protected]@[email protected]@homegain.com

“TECHNOLOGY FACTOR” IS GIVING A BOOST TO HOT REAL ESTATE MARKET, STUDY CONCLUDES

Survey of consumers and REALTORS® describes factors contributing to moreeffi cient real estate market and increased sales

EMERYVILLE, Calif., July 24, 2002 – As home sales in the United States approach another record year of growth, a study that surveyed more than 650 consumers and real estate REALTOR®

– As home sales in the United States approach another record year ®

– As home sales in the United States approach another record year s nationwide

shows how an overlooked factor – technology – is giving a boost to the real estate market. Published by HomeGain, the largest consumer-to-real estate REALTOR®shows how an overlooked factor – technology – is giving a boost to the real estate market. Published

®shows how an overlooked factor – technology – is giving a boost to the real estate market. Published

matching service, the study concludes that increased media exposure for homes, greater effi ciency in the home buying process, savings on commissions and the reduction of consumer risk are combining to make the real estate market more effi cient and increase home sales.

“This study, and other recent industry surveys, help explain why the national real estate market has remained so hot even in the face of bad news in the rest of the economy,” said Bruce Schroder, HomeGain CEO. “Technology is empowering homebuyers to reduce the perceived risk of their real estate investment by making the information needed to make educated decisions easily accessible. Working with informed consumers, REALTORS®estate investment by making the information needed to make educated decisions easily accessible.

®estate investment by making the information needed to make educated decisions easily accessible.

can provide better customer service and increase productivity. In short, everyone wins and the industry numbers illustrate that.”

Among the study’s key fi ndings:

Broader listings – Internet exposure of homes on the market has not only given the average home global exposure but greater penetration locally, accelerating the pace of home sales, the study concludes. Eighty-one percent of sellers surveyed who used the Internet for some portion of their home sale advertised their homes on the Internet. Seventy-four percent of buyers said they saved time by viewing home listings online.

REALTOR® productivity – According to the study, top-producing and technologically adept REALTORS® are handling more clients as they use technology to manage functions that previously required paperwork or direct contact. Thirty-one percent of REALTORS®

are handling more clients as they use technology to manage functions that previously ®

are handling more clients as they use technology to manage functions that previously surveyed said the Internet

and e-mail have signifi cantly increased their volume of closed transactions.Cost savings – The combination of more consumers going online and more web-savvy REALTORS®is helping drive down transaction costs, the study notes. For example, 36.5 percent of sellers surveyed paid a 5.5 percent commission or lower.



Transaction time – The productivity gains for both REALTORS® and consumers have compressed the average time it takes to sell a home in the United States. The study found that the average days from list to contract has been cut by more than 40 percent through use of the Internet. Previous industry research has shown that homebuyers use the Internet to shorten their home search, which in turn reduces the time required by REALTORS

®industry research has shown that homebuyers use the Internet to shorten their home search, which in

®industry research has shown that homebuyers use the Internet to shorten their home search, which in

to show properties.

Risk Reduction – In addition to viewing properties and sales comparables online, notes the survey, homebuyers and sellers can use the power of information on the Internet to make better choices earlier about such factors as how to price a home, determine a realistic price range for a home search, choose among home loan products and select the right REALTOR®about such factors as how to price a home, determine a realistic price range for a home search, choose

®about such factors as how to price a home, determine a realistic price range for a home search, choose

. This research decreases consumer risk throughout the buying process; half of buyers surveyed said the use of the Internet increased their comfort level for buying a home by 50 percent.

“As the Internet makes it easier to buy and sell a home and drives down the cost of real estate transactions, more consumers are encouraged to step into the market,” said Ward Hanson, faculty at the Center for Electronic Commerce and Graduate School of Business, Stanford University. “Greater effi ciency and lower transaction costs are stimulating home sales activity, reassuring homebuyers about their decision, and improving the entire real estate process.”

The study also offers insights into the ways consumers save time online:

• 94 percent of sellers said fi nding and comparing REALTORS® online saved them time during the real estate transaction.

• 59 percent of sellers said e-mail correspondence with their REALTOR® saved them time during the transaction.

• 39 percent of sellers said the Internet decreased their personal time spent on the transaction by 30 percent or more.

Titled “The Technology Factor: A Dynamic Boost for the Housing Market,” the study was released during the opening session of Real Estate Connect 2002 in San Francisco.

Copies of the study can be obtained through the HomeGain web site, www.homegain.com/press_center, or by contacting the company at 510-655-0800, ext. 4188.

About HomeGainHomeGain is the largest provider of customized services to consumers using the Internet to sell or buy a home. Its REALTOR®HomeGain is the largest provider of customized services to consumers using the Internet to sell or buy a home. Its

®HomeGain is the largest provider of customized services to consumers using the Internet to sell or buy a home. Its

Evaluator feature is the only personalized referral service that enables consumers to fi nd and compare the best local real estate REALTORS

® Evaluator feature is the only personalized referral service that enables consumers to fi nd and compare

® Evaluator feature is the only personalized referral service that enables consumers to fi nd and compare

from a nationwide network of more than 50,000 real estate professionals. Buyers can view the newest home listings in their area through its Home Search Express tool. Users can also access a full range of home buying and selling tools, services and content to value a property, prepare a home for sale, secure a loan, arrange a move, or make home improvements. More than 2.8 million consumers have registered at the HomeGain web site (www.homegain.com) since its inception in 1999. HomeGain’s services are powered by more than 80 online partners, including: Yahoo! Real Estate, CNNMoney.com, CitiMortgage, QuickenLoans.com, Google, MSN, LookSmart.com, iWon.com, and E*TRADE. HomeGain is a licensed real estate broker. State license information is available at homegain.com/broker. HomeGain is privately held and is headquartered in Emeryville, CA.



About HomeGain (www.homegain.com)

Founded in 1999, HomeGain is the Internet’s largest consumer-to-REALTOR® matching service, approaching three million registered users. HomeGain provides motivated, prepared homebuyers and sellers with a nationwide network of 54,000-member real estate REALTORS®, and in the process provides information and tools to help them learn how to minimize costs and maximize their return on the largest fi nancial investment most Americans will ever make.

Key site features include:

• Agent Evaluator Service (AE): A free service home sellers and homebuyers alike can use to easily and anonymously post a profi le online to locate a REALTOR® to represent them in a home sale or purchase. Consumers input information on square footage, number of rooms, price expectation, buying timeframe and qualifi cations of an ideal REALTOR®. The information is forwarded to real estate REALTORS® in the ZIP code or ZIP codes of interest indicated by the consumer. The REALTORS® compete for the business and submit proposals online that provide the consumer with information about their years of experience in real estate, the number of homes sold within those ZIP codes and other details about their knowledge of the locale. In the case of home sellers, REALTORS® list a commission rate. It’s all up-front, so consumers have a clear picture of their options. REALTOR® Evaluator allows consumers to take as much time as they wish to compare and contrast qualifi cations and qualities among top-producing REALTORS® before choosing the right one.

• Home Search Express Service (HSX): A free service that provides homebuyers with web access to more than one million current home listings. To view home listings, consumers register at www.homegain.com with a top-performing REALTOR with a top-performing REALTOR® based in the market targeted for home purchase. The local REALTOR® then displays the most current MLS listings that fi t this criteria on their custom-created web page. Homebuyers can also opt to receive periodic updates of new MLS listings that fi t their criteria, via email, from the REALTOR®. With the addition of MLS listings, HomeGain helps a growing number of homebuyers who are spending signifi cant amounts of time online investigating housing and fi nancing options prior to contacting a real estate REALTOR®.

• Home Price Express Service (HPX): A free service that offers prospective home sellers an instantaneous, detailed report of comparable home prices and recent sales in a designated zip code. Information includes the distance of each sold home from the consumer’s residence, number of bedrooms, square footage and approximate date the home was built. The report is sponsored by a locally-based, top-performing REALTOR®. Consumers considering a home sale can also receive a price estimate on their home’s value from the REALTOR® by completing a simple, online questionnaire.

• HomeGain Member REALTOR® Network: HomeGain’s open platform offers consumers 54,000 registered REALTORS® representing 3,000 individual real estate brands across the United States, from big-name nationwide franchises such as Century 21, Coldwell Banker and RE/MAX, to REALTORS® from top-ranking local real estate



brokerages. HomeGain member REALTORS® sell, on average, nearly three times the number of homes per year as their offl ine counterparts, their average sales volume is about $3 million (compared with $770,000 for an offl ine REALTOR®), and their average transaction of $218,000 is 40 percent higher than that of the traditional REALTOR®.

• Referral Maximizer Service: A free service used by buyers who want their REALTOR® to do the legwork involved in fi nding a qualifi ed REALTOR® in a market where they plan to relocate. Their REALTOR® posts a referral online at HomeGain seeking a fellow REALTOR® in the client’s ZIP code or ZIP codes of interest, and includes information on the home their client wishes to purchase, their timeframe to buy as well as price parameters. The referral is forwarded to REALTORS® in these ZIP codes within the HomeGain network. These REALTORS® compete for the referring agent’s business by submitting a proposal with their sales history, years of experience, professional designations and the referral fee they will pay to the referring REALTOR®. The referring REALTOR® and client remain anonymous, allowing them to evaluate REALTORS® thoroughly without sales pressure before choosing the right referral REALTOR®.

• Real Estate Licensing: HomeGain holds real estate brokerage licenses in 40 states (80% of U.S.) and the District of Columbia. HomeGain is a licensed broker in its home state of California.

• Home Sale Maximizer: Designed to help home sellers make moderately priced improvements prior to sale. More than 2,000 REALTORS® nationwide told HomeGain which 10 improvements really pay off when a home is sold. Savvy homebuyers can also use the tool to learn which improvements REALTORS® are recommending and how much they cost. Buyers can leverage this knowledge when it comes time to ask the home seller for concessions in markets where the balance of power is shifting toward the buyer.

• PMI Saver: Homeowners paying private mortgage insurance (PMI) can learn if they have enough equity in their home (usually 20 percent or more) to drop this added expense. Homeowners looking to buy up soon can take the savings and build up their homebuying war chest.

• Library Content: HomeGain has one of the largest selections of resources online, including helpful articles on buying strategies, fi nancing and tax considerations. HomeGain’s library includes exclusive articles by America’s best real estate writers, a large searchable real estate glossary and database of common questions and answers.

• Free Tools For Sellers: Additional free tools and information especially for home sellers at HomeGain include: A downloadable “Guide to Finding the Perfect Real Estate REALTOR®”; What’s Left After Your Sale? tool; Calculate Your Capital Gains Tax tool; and Avoiding Foreclosure page.

• Free Tools for Buyers: Additional free tools especially for homebuyers at HomeGain



include: A downloadable “Guide to Finding the Perfect Real Estate REALTOR®,”; Improve or Move tool; Stay Put or Buy Up tool.

• Mortgage Center: At the co-branded Mortgage Center, supported by Bank of America, HomeGain customers get access to an array of residential loans: conventional, sub-prime, home equity, government/FHA and jumbo. Customers can also obtain the latest updates on mortgage rates, get pre-approved for a loan and learn how to consolidate debt. Quicken Loans also provides resource content for homebuying, refi nancing and home equity users with a multitude of helpful tools and information.

• Moving Center: If you’re searching for a reliable moving company or trying to calculate the cost of living in your new neighborhood, HomeGain’s Moving Center, powered by Budget Truck Rental, has got you covered. Tools include: moving and storage services, truck rental, packing, moving; neighborhood, supplies and loading and unloading calculators, moving and storage guides; and more.

• Home Improvement Center: Whether you need to have your new home cleaned, make a small repair or add a new room, HomeGain’s premier partners can help. Tools and services offered include: buying tools and hardware; tips and resources for more than 200 do-it-yourself projects; fi nd a local contractor through ImproveNet; and free tools and calculators to help you decide whether to tackle a project yourself or hire someone to do it for you.

Other Initiatives From HomeGain:

• REO: HomeGain’s consumer-to-REALTOR® matching service has been tailored to help banks, lending institutions and mortgage servicing companies liquidate Real Estate Owned (REO) properties. HomeGain works with lenders throughout the United States to help them fi nd top-producing, highly qualifi ed local real estate REALTORS®

to dispose of REO properties and clear them from the institution’s books. HomeGain has launched a special training program to help REALTORS® who specialize in REO liquidation. Lenders with increasing inventories of REO properties who want to get them sold promptly can fi nd REALTORS® with plenty of local market experience and knowledge at HomeGain.

• Trust Asset Management: HomeGain’s matching technology and nationwide network of 50,000 registered real estate REALTORS® is ideal for asset managers within the institutional and independent trust industries who may not have real estate contacts across the country. With HomeGain, managers can post for free the profi les of as many as 10,000 residential properties for sale by zip code, then seek proposals from HomeGain member REALTORS® within those zip codes. The HomeGain system greatly enhances existing practices used by asset managers to locate qualifi ed real estate professionals in local markets and ensures they are identifying and hiring the best REALTORS® who can maximize the yield from a sale. HomeGain provides access to top-producing REALTORS® in big and small markets throughout America with a system that’s effi cient, free and provides an electronic paper trail.



With 2.8 million registered homeowners and a nationwide network of 54,000 real estate REALTORS®, HomeGain has grown to number 5 in overall real estate traffi c on the Internet and is the largest consumer-to-REALTOR® referral service online. HomeGain also powers REALTOR® fi nder services at these partner sites:

• Yahoo! • MSN• CNNMoney.com • E*TRADE• Quickenloans.com• Google• iWon • AskJeeves • AltaVista• CitiMortgage • LookSmart• GoTo • HomeScape.com

HomeGain’s fi nancial backers include BancBoston Ventures, Comdisco, Intuit Inc., J. & W. Seligman and Co., Netscape co-founder Marc Andreessen, Mindful Partners, Technology Crossover Ventures, and TMCT Ventures,

HomeGain is headquartered in Emeryville, Calif. Bradley J. Inman is founder and Chairman of the company.



Survey Methodology

In June, 2002, HomeGain ((www.homegain.comwww.homegain.comwww.homegain.comwww.homegain.comwww.homegain.comwww.homegain.com)))), conducted three separate surveys with homebuyers, home sellers and REALTORS®. The survey sample consisted of homebuyers who had purchased a home through a HomeGain REALTOR® within the fi rst six months of 2002, homeowners who had sold a home using a HomeGain REALTOR® within the fi rst six months of 2002, and HomeGain-associated REALTORS® who had represented buyers or sellers in transactions within the same time period.

The surveys were conducted via email.

HomeGain contributing staff:• Bruce Schroder• Thomas Newell• Andrew Coleman• Glenn Houck• Cathy Harrington

The Technology Factor: A Dynamic Boosting the Housing Market

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