I have been thinking a lot about the home buying process lately, especially in Saint Louis. Based on what I see every day, I’ve begun to think that maybe Zillow isn’t the best way to start a St. Louis home search.
The Rise Of Zillow In St. Louis Home Search
Ask most any real estate agent in Saint Louis or real estate broker about Zillow, and they probably have mixed emotions. On one hand, Zillow is basically taking the listings agents input and blasting them all across the internet. This is great exposure for listings. On the other hand, Zillow’s lead generation service is great for those real estate agents with bigger pockets, and not so great for everyone else. As more and more St. Louisans start their search with Zillow, it forces real estate agents to be on the platform, regardless of whether or not they really want to be involved with Zillow.
The Home Buying Start
Ask yourself what you would do if you wanted to buy your dream home within the next year? I would venture that 95% of the population would first get online and start looking at all the pretty homes on the listings portals, (Zillow, Realtor.com, etc.) While we might look at this as a great first step in buying a new home, is it really?
Home Searching Aspirational Purchase
Many people don’t realize that the very act of searching for homes for sale is based on aspirational dreams. For example, the market for luxury homes in Saint Louis isn’t very large, but I bet you that thousands of people search for the most expensive homes in Saint Louis every month. Why do they search for these types of homes that they likely could never afford? It’s an aspiration…they aspire to someday own a luxury home. One of the more endearing stories I’ve ever heard was about Counzo Martin, the basketball coach from Mizzou, who grew up in East Saint Louis. When he was a kid, his mother would take the family by bus to open houses in the “nice” homes in St. Louis so that he learned that it is possible to move up in the world.
Saint Louis Home Searches On Zillow
When you look for houses on Zillow, what exactly are you looking for? Searching for homes in Ladue when you can’t afford to move there isn’t saving you time. Perhaps you could argue that you need to see the prices of homes in Ladue to know you can’t afford to live there, but I disagree. As you start the home search, you really have no idea what you can afford.
Online Home Searches Are A Snapshot In Time
The home buying process can take some time. When you start your search on Zillow, you are basically looking at what homes are available at that moment. There’s no history in the home search. And, what you are looking at is what hasn’t sold yet, so there could be homes that would be of great interest that are already gone from the site. This can warp your perception to the high side. The prices listed are asking prices, not sold prices.
How Would A Real Estate Agent Start Their Search?
I suspect 99% of the real estate agents I know would never start their search on a listings portal. For one, we have our own. Second, looking at houses isn’t something that makes any sense because we need to know what we can afford. After all, some buyers never end up buying homes, and financing is one of the reasons this happens. So, how would a real estate agent in Saint Louis start their search? They would apply for a mortgage pre approval letter from their lender. This gives us 3 key pieces of information.
- Whether or not we can even buy a house. If we intend on using financing to purchase our new home, we need to know that the lender will approve a home purchase. If the lender can’t supply a pre-qualification letter after our application, we know we can’t buy a home.
- How much house we can afford. This works two ways. First, we can see the most expensive home we can buy. Second, we can adjust to what makes more financial sense within our budget. I’ve noticed that people tend to overestimate what they can afford based on their earnings. If we search the online portals with the belief we can afford one thing, when we really can’t, it just leads to wasted energy and disappointment.
- Where we can live. While it’s certainly true that we can find houses in any part of town, we can’t always find something that works for the price you can afford. As an example, if you want a 3,000 square ft. home with a 3 car garage with a large lot, but you only have a pre-approval letter that goes to $60,000, we’re going to have a tough time finding something in move in ready condition. As a general rule in more expensive areas, you will find price per square foot prices higher, which will force you to purchase a smaller home in that area, should you desire, all thing being equal
How Should Zillow Be Used?
Before securing a pre-approval letter, I would say as a time waster. When you’ve found your real estate agent in Saint Louis. This can also be known as a buyer’s agent. After you’ve secured a pre-approval letter, you can use Zillow or any other listing portal to aid in finding a new home in an area you love.