Internet Use in Real Estate - Research Paper Example

RUNNING HEAD: INTERNET USE IN REAL E Internet Use in Real E 3/18/2008 Table of contents Executive summary 3 Introduction 4 How the characteristics of e-commerce make it a new force in business operations 4 What is e-commerce? 4 Importance of e-commerce as a strategic component of real estates business 5 Tangible benefits 5 Intangible benefits 6 Improved sales 6 Lower costs 6 Online marketing as a communication vehicle 7 Client orientation 8 Market trend 8 Benefits Internet Marketing in Real Estate 8 The ways in which the internet and WWW may be incorporated in a real estate business 11 Web designing 11 Web site promotion 11 Real Estate e-commerce marketing tips 11 Conclusion 13 Reference: 15 Appendix 16 Executive summary Sales and buying of real estate residential properties are among the most important financial transactions which many of the people are involved in. for that reason these people have a concern that the transactions made are effective and best to their advantage. However over the past ten years or so, a significant change affecting the modern society has been growing; internet use by the consumers. Studies have continued to predict that the internet use is poised to grow further in future. This research paper is going to analysis the connection of these two crucial aspects, i.e. Using internet in real estate marketing; for the years industry analyst had predicted a growth in internet uses and fundamental changes in the real estate services, though the number of the internet users continue to grow, changes in the real estate services have not been that fundamental. Introduction The increase in the use of internet, specifically the World Wide Web (www) in the past ten years or so has been exceptional and has impacted almost every sector in developed nations. Among the most significant aspect in individuals’ lives, is their housing condition. In many western countries this is normally a residential property which is owned by the person occupying it. Thus owner-occupiers have a high interest in the way residential markets operate. Which the trend in the market changing and many real estate firms adopting internet as a marketing tool, for selling, advertising and listing, this paper will seek to find out how the use of world wide web and e-commence has impacted the real estate industry and how a company can adopt the use of internet in its operations (Baen and Guttery, 1997) To address this subject, the study paper will carry on, along the following field: internet will have to be defined for reasons of theoretical clarity; e-commerce, definition and essentials, and functions will be underscored; reasons for real estate using e-commerce will be discuses, and how to create an effective website for real estate companies will be discussed at length; and lastly “a way forward” in terms of a conclusion will be provided How the characteristics of e-commerce make it a new force in business operations What is e-commerce? E-commerce is the trade of services and products by means of computer networks or the internet. Chan, Lee, & Dillon, (2001) defines e-commerce as selling and buying of goods or services using electronic media it follows the basic principles of traditional commerce but in this case, buyers and sellers swap commodities through the internet for money. In e-commerce sellers and consumers of products transact business over networked computerized processes. This has offered maximum convenience to buyers and sellers alike. (Kroll, 2000) Buyers in this form of business get the opportunity to compare prices, quality and other factors before deciding to undertake the transaction. The buyer gets advantages of saving on physical transport costs and he/she can a product even from far place on a click of the mouse. Importance of e-commerce as a strategic component of real estates business E-commerce serves as a vital strategic tool for companies. When e-commerce is well used in real estate companies, it brings considerable opportunities to the companies. The importance of e-commerce to real estate agents can be classified in two main classes; the tangible advantages and the intangible advantages that are brought about by information technology. E-commerce is vital for real estates companies today e-commerce can assist many real estates firm to revolutionize their manners in which they operate and manage their operations. (Bivins, 1999) Tangible benefits The tangible benefits of e-commerce touches on the monetary aspect of a company, it touches on the financial benefits that occur due to a company investing in e-commerce that can only be measured using tangible metrics. For example it affects cost saving, market share, productivity and profitability of Real estate companies. These benefits can enable real estates firms to make a lot of saving and the money saved goes along way in improving other aspect of the firms. (Chan, Lee, & Dillon, 2001) Intangible benefits The intangible benefits that can be brought by the e-commerce to real estates firms includes, improved customer care, advanced knowledge on customer needs, enhanced coordination with the company partners, improved product quality thus giving real estate firm a competitive advantage. Chan, Lee, & Dillon, (2001) states that, the competitive benefits of the company usually are seen in the form of the cost position of the company or products differentiation. E-commerce impacts Real estate companies advantages by having an effect on the way the Real estate companies operates, by changing the products of the company and also changing the way of the competition itself. (Chan, Lee, & Dillon, 2001) Improved sales Going online will definitely improve sales of the Real estate companies since it will open new markets. The Real estate companies will be able to reach a wide market and at the same time maintain its market segment. Another important aspect of online marketing is that the Real estate companies will be able to receive customers’ suggestions and views about the Real estate companies’ service directly and respond immediately or within a shorter period. Through this, it will be able to monitor customers’ requirements and any changes in market demand, and respond accordingly, this will greatly improve the service delivery of the Real estate companies. (King, Lee and Vineland, 2004) Lower costs The aim of any business is to reduce production cost in order to improve its revenues e-commerce is one of the cheapest ways of doing business. Business to business communication costs will be reduced greatly when the Real estate companies adopt e-commerce marketing as a medium of transaction. Costs such as; phone calls, purchasing costs, traveling costs, inventory costs, data entry costs, faxing etc reduce the amount the transaction costs. The old day’s ways of marketing was not only time consuming but also costly especially to a wide range of clients. The current internet technology is the best as it is currently the widely used distribution channel that is being used in the market. (King, Lee and Vineland, 2004) Since many households and offices today have a computer and most of them are currently connected to the internet, it makes an opportunity for the Real estate companies’ marketers to reach a high percentage of the population of consumers hence also saving marketing cost which are normally very high. Thus this will translate to the Real estate companies offering its customer affordable real estate property. (Bivins, 1999) Online marketing as a communication vehicle One of the good aspects of e-commerce is the internet, which is a bi-directional communication tool which is ironically the least expensive way of advertising compared to other types of advertising such as radio, television, magazines and news papers. E-commerce offers great benefits for businesses in this century; increased effectiveness, wide range of audiences, reduced advertising, marketing, and transportation costs, improved exposure, increased popularity, among others. The Real estate companies will therefore, have a cheaper way of advertising and at the same time reach a wider segment of its clients. In addition e-commerce will enhance communication between the Real estate companies and the customers through email communication. (King, Lee and Vineland, 2004) Client orientation The client orientation involves the responsive of the Real estate companies. An email address for example on a home page of the fast food store will create human connection between the Real estate companies and the viewing audience. The clients of the Real estate companies will have to answer promptly to an email they receive and if the same information request is received with some frequency not normal to what is expected for example a complain about a certain recipe or service , then, Real estate companies will have to take necessary steps to rectify it. If the answer to an information request can be found on the Real estate companies’ pages, some kind of decision will have to be made to create additional pathways or improved ones. When the information is not received, then the motion will be set in order to add the requested information on the site as quickly as possible. Market trend The internet emergence has witnessed the major changes in traditional trends of business. At present, internet marketing has increasingly become the crucial phrase for many businesses. Among them being Real Estate, in the recent past, Internet is becoming the first point for majority of potential home-purchasers in their look for a residence. Benefits Internet Marketing in Real Estate As a result of the various benefits Internet marketing is providing to the real estate companies and to the clients, Internet marketing has thus, become a much more popular platform for every competitive real estate firm. Internet real estate property Make Better customers. A common trend of e-commerce indicates that these customers are richer and prepared to purchase more high-priced homes. Cost effective E-commerce reduces the hunt for potential clients. E-commerce when used it save much more time and also energy which is normally used for looking for potential clients. Thus, it is often cost effective compared to traditional methods of selling. Fast transactions Internet offers the potential clients a lot more feature in searching for their specific types of home, since they can narrow down their search options to look for what they desire. Goes with the trend in customer demographic changes Present studies disclose that, the homebuyers have continued to be younger as younger people have been becoming economical empowered earlier in their ages. This group of young people has been using the internet for a long time and they prefer e-commerce transactions. E-commerce customers are better informed Homebuyers using services of e-commerce for their residence hunt are also better-informed regarding the entire purchasing procedure, and express greater fondness with real estate agents they use. Indeed, about 80% of online homebuyers employ a real estate agent, which is higher than the conventional buyers at a 70% possibility. Hence, a part from offering a chance for enormous viewers of exceptional potential buyers, the e-commerce provides expediency as well as cost efficacy which conventional marketing medium cannot offer. Today, Web sites have become more attractive and informative much more than top promotional materials such as brochures. The Communication provided by emails has made it rather cheaper and easier to communicate with your previous clients. Chart 1, shows the trends in the real estate selling pattern used in the industry. The ways in which the internet and WWW may be incorporated in a real estate business Web designing It is important that a website should be developed which will be used by the Real estate companies to carry on its business with the customer the designing of the website can be tailor- made to suit the needs of the Real estate companies. Web site promotion The Real estate companies will be required to advertise and promote its business, in order for the customers to be aware of the Real estate companies to come to the company and get the services offered. Real Estate e-commerce marketing tips Despite the vast sway of homebuyers opting for e-commerce, many realtors grumble that their websites are not productive as they would like and that they do not get new business. Though the majority of real estate agents acknowledges the importance of e-commerce and willingly pays for hosting web site, in most cases they generally don’t put in systematic attempts and time in achieving their objectives. For e real estate Company, it can achieve its objects through making its site really effective. This might occur owing to overstated promises put in their websites designers, a mix-up of running of the e-commerce site, or an absence of bearing or direction, a lot of web sites fall far behind of their true potential. For that, it is important to make sure that that the real estate company is actively participating in the conception of stronger website. The company technical staff ha to understand well the search engine optimization techniques, to know how to raise the web traffic as well as translate leads into buyers. Here are some of the important tips. (Kroll, 2000) Make the Website much appealing: When individuals visit the company’s website, the company has very limited time to arrest their interest before they strike the back key. Thus, the home page should be more attractive with minimum distraction. The home page should also be more informative to prospective home-buyers. Shun misusing the pop-up windows and flash introduction. Employ simply fast-loading images or graphics and any other aspects. The site web pages should be of light weight for easy downloading. Enlist the Website: hunt for hottest Website Directories on the internet and enlist the company site on those hot directories. This is among the most effective and easiest methods of free website promotion. The company also should ensure that their site is rich in its contents and appearance to easily be accepted by the directory chosen. (Benjamin and Chinloy, 2000) Search Engine Optimization: it is good to Respect the available Search Engines, in addition employ the practice to use web pages which don’t integrate large volumes of code unconnected to the content. Limit the frame in the webpage to enhance traffic of the web pages. (Benjamin and Chinloy, 2000) Generate a Blog: Blogging could be much more than just a communications instrument and a networking stage for the real estate experts. Blogging can express personality, create leads and enhance business. Following creation of the Blog, do not forget to get enlisted within Blog directories; it will assist the marketing processes. (Benjamin and Chinloy, 2000) Publish online articles: through publishing of Articles, the real estate will increase its presence on the online platform. These articles support the company’s marketing programs in a number of ways, which ranges from page ranking to search engine visibility. Many studies support this aspect. Show email id: a lot of internet users abhor being compelled to fill forms in order to collect information. A number of users might accept the online form as convenience; however several users might desire using their personal email address to get in touch with the agent, in order to keep a confirmation of the email communication. (Benjamin and Chinloy, 2000) Minimize Attrition: Attrition trails you in each stage of the company’s real estate internet marketing activities. Attrition is used to refer to individuals who “drop out” along the marketing course somewhere amid first contact making and the client acquisition phase. Create lead generation: keep in mind that, website traffic is merely fruitless traffic until when acted upon. To get the website visitors acting in one way or another to become clients of the company, the company needs to craft a lead-generation system founded on value and enticements. (Benjamin and Chinloy, 2000) Conclusion In today’s business world, e-commerce continues to be very relevant to companies as they struggle to invent cheaper and more efficient ways to market their products and services. The internet and the web have become major marketing tools for commercial and industrial brokers, providing detailed information about the companies and services offered and also providing ongoing means of communications with regular customers through features such as e-mail and newsletters on the Web. While the internet has greatly widened the opportunities for distributing and sharing information, there are no signs that this is diminishing the need for brokers. Instead, those brokers who are knowledgeable about Web resources are using it to expand their market.   Reference: Baen, J.S. and Guttery R.S (1997): The Coming Downsizing of Real Estate- Implications of Technology, Journal of Real Estate Portfolio Management, Boston 1997 Vol. 3 Benjamin J. D. and Chinloy P.T (2000): Technological Innovation in Real Estate Brokerage, Journal of Real Estate Research, Vol. 10 No.1 Bivins R (1999): New Houston Realty Firm Has Success Melding Internet, Standard Approach, Knight-Ridder/Tribune Businesses News, November, Chan, H., Lee, R. & Dillon, T., (2001): E-Commerce in Practice; Fundamentals and Applications, England: John Wiley & Sons, LTD. P 120-138 King, D., Lee, J., and Vineland, D. (2004): Electronic Commerce; A Managerial Perspective, New Jersey: Pearson Prentice Hall. Kroll, C A (2000): Expanding Economic Development Resources with the World Wide Web. Real Estate Canada: “For Sale by Owner” - http://www.propertysold.ca/ Appendix An example of website of ZIP REALTY real estate Company, Source, www.ziprealty.com Another example of website from Canada real estate Company, Source: http://www.propertysold.ca/ Read More