Pages: pp. 88
Abstract—The Internet has certainly changed the house-buying experience over the past decade, but real-world financial paperwork is still going strong.
Keywords—Internet computing, online real estate, electronic information
MY WIFE AND I BOUGHT OUR FIRST HOUSE IN 1998. WE BOUGHT OUR NEXT HOUSE LAST OCTOBER. IN THAT 12-YEAR PERIOD, THE INTERNET HAS CHANGED THE HOUSE-BUYING EXPERIENCE, BUT HOW?
Back in 1998, there were about 3 million websites in the world. With the exception of the ATM, personal banking and finance was conducted on paper and by phone. Now there are more than 100 million websites. The Internet has become the principal means by which many families, Jan and I included, manage household finances.
Thanks to the Internet, information about houses for sale, once jealously guarded by realtors, is now widely available. Just go to Google, type in your target address, and see what you get. My local paper, the Washington Post, has an online tool that taps into municipal sales records ( www.washingtonpost.com/homesales/advancedSearch.html). Using it, I discovered that Washington Capitals ice hockey ace Alexander Ovechkin bought a house five years ago on 16th Street North in Arlington, Virginia, for $1,595,000.
You'd expect those trends to have made buying a house easier—and they have. Jan found our new house herself when she spotted it on a walk with our Airedale terrier, Gemma. Once the two got home, she soon found the house on the realtor's information-packed, extensively illustrated website. She and I went to the open house the next day.
Today, arranging the financial side of buying a house is easier as well. Back in 1998, we submitted pay stubs and other financial information as an inch-thick wad of printed paper. In 2010, we submitted PDFs. Jan, who handled the financials, could even obtain and forward documents while on a business trip in Calgary, Alberta, and on vacation in Morro Bay, California.
But, despite the convenience of electronic records, Jan observed that our banker, NASA Federal Credit Union, still thinks of those records as paper analogues. The credit union hasn't yet built a system that does more than just receive documents. "It would be great if you could upload documents to a secure account," she told me. "Then other trusted institutions, like the title company, could access them. A check list would be nice, too."
Given that a big part of buying and selling houses entails exchanging information, I wondered whether realtors would, like travel agents, fall victim to the Internet's power to reduce to almost nothing the cost of making information available. That fate doesn't appear to be imminent. The financial and legal stakes are so high that buying or selling a house at the click of a mouse seems remote—at least for now.
Attending to the myriad details of buying or selling a house is another service that realtors provide, as is marketing. Paradoxically, if every house, for sale or not, is on the Internet, marketing a particular house doesn't necessarily become easier. Knowing the market and knowing potential customers are just as valuable in the Internet age.
One aspect of buying a house hasn't changed since 1998: When Jan and I sat down for closing, we still had to sign an inch-thick wad of paper documents in ink and in person. "Where does all this paper go?" Jan asked the person from the title company. "The credit union keeps it in a warehouse somewhere," was the reply.
NASA employs about 10,000 civil servants and contractors in the Washington, DC, area. If, like Jan and me, they bought a house in the past decade, they generated on the order of 10 cubic meters of financial paper. Not much, you might say, but I wouldn't want to look through it to find something.