Top blunders of Internet home searching

The number of Australians using the Internet to search for the home of their dreams is poised to keep on climbing.

According to a study done in 2008 in the USA, and we can assume Australia would be similar, fully 87% of homebuyers used the Internet to search for homes last year. That's up steadily from 84% in 2007 and 80% in 2006.

But despite its mounting popularity, the Internet home-buying process can present a host of pitfalls. To help make your online real-estate searching more effective, here's a look at some Internet home-buying blunders and what you can do to avoid them.

1. Assuming you can do it all yourself

The Internet allows users to handle for themselves many of the tasks that could once only be performed by real-estate agents. There are websites to "check the value" of your proposed home. There are videos of the internal, and the outside.

The number of homebuyers who first learned of their homes on the Internet has been rising in recent years, to 32% in 2008, up from a tiny 2% in 1997. Accordingly, the number of homebuyers who first learned of their homes through agents has been declining, to 34% in 2008, down from 50% in 1997.
But although the Internet can provide heaps of helpful tips and research, it would be a mistake to assume that the Web is all you need to buy a house — unless you are an experienced real-estate investor. Purchasing real estate can be extremely complicated, and it's easy to make a mistake if you don't have an expert advising you. And when it comes to something as expensive as real estate, those mistakes could cost you thousands of dollars.

2. Looking too narrowly

The sheer amount of houses on the internet can be overwhelming. As a result, buyers can be tempted to stick to just one or two popular real-estate search engines, such as Domain.com.au and realestate.com.au. The problem with doing that, however, is that you're missing out on the biggest advantages that the Internet offers.

First, you're closing yourself off to a smaller cross section of the homes that are out there. A lot of websites aren't comprehensive and don't have all of the latest listings, as it can take weeks before an Agent places the home on one of the popular websites.
Second, you miss all the breaking, up-to-the-minute information on the housing market that can make you a smarter consumer.

Forums have become a popular resource for people to post information, however, many of the people posting have absolutely no idea about the market, and it is simply their (often ill-informed) opinion.
3. Ignoring the independents

One area that major real-estate search engines often overlook is the market for homes sold by the owners. A lot of people forget to think how many homes are sold without agents. The current estimate is that 15%-20% of homes are listed by owner.

Your dream house could easily fall into that 20%.

And if you are looking for an investment apartment, many of the best properties are NEVER advertised on these websites, as they are offered on private client websites by investment groups and advisers, such as the Citylife Property Group.

4. Falling for fake listings

Remember, the Internet is a giant playground for scammers, and unfortunately they have penetrated the world of online home buying as well. Combine big dollars for online advertising and a lot of people searching for homes, and the result is a proliferation of fake home listings. There are a number of red flags to look out for.

If there are no photos [of the house], that's a big warning sign. That's just people trying to collect page views for internet advertising.

But even if the listing has photos, it's not guaranteed to be legitimate.
5. Putting too much stock in home-valuation Web sites

There are sites now claiming to put pricing information at buyers' fingertips. But they're not infallible.
Don't assume to know what the value of a home should be based on what these sites tell you about the neighborhood. There are many elements of a home's value that home-valuation sites cannot incorporate.
Take their values with a grain of salt. Use the information merely as a range. Conduct other research to narrow that range