How online and empowered consumers are taking charge and paying less.

For decades, real estate world turned in a predictable manner. The roles of buyers, sellers and real estate professionals were fairly well defined and transactions followed a predictable path of yard signs, newspaper ads, open houses and miles of paperwork.

Recently, online and empowered consumers have changed game. Real estate professionals now face issues similar to ones that have transformed retail, personal finance and travel planning industries. As technology advances and new business models evolve, real estate industry has begun to transform itself from providing traditional, carefully controlled “agent-centric” transactions to new “consumer-centric” practices. The following is a look at some of recent industry trends and how buyers, sellers and investors can expect to benefit. The “Five Ds” that are driving change in real estate are:

1. Disruption – Over past 10 years, Internet has matured into a powerful platform for delivering real estate information, forever changing interaction between buyers, sellers and real estate professionals.

2. Displacement – The popularity and acceptance of self-service and consumer-direct business models is being felt by real estate professionals, who are striving to develop attractive new offerings for Web-savvy consumers.

3. Demanding consumers – You now have more real estate knowledge, tools and resources at your fingertips than ever before. More savvy consumers tend to be more independent and demanding.

4. Downward pressure - Traditional real estate commissions of 5-6 percent of a property’s sales price are facing downward pressure.

5. Developing alternatives – The real estate industry is transforming itself to provide targeted services and exciting new options that add value for consumers. Disruption

“We are going to see our industry go through dramatic transformation via Internet and consolidation of agents and companies.” – eRealty Times Columnist Dirk Zeller

Some industry observers have adopted Harvard Business School professor Clayton Christensen’s term “disruptive technology” to explain recent developments in real estate. Though it’s easy to point to World Wide Web and advancing technology as main changes in real estate, that’s only part of what’s shaking things up. Essentially, real cause of disruption is not just technology, but technology-enabled real estate consumers. Web-enabled consumers

According to National Association of Realtors (NAR), more than 72 percent of homebuyers now begin their home search online. The popularity of online real estate ads surpassed newspaper property listings back in 2001, and gap is widening. Less than one percent of buyers first learned about home they purchased on Internet in 1995, while in 2004, that number passed 20 percent.

According to a California Association of Realtors (CAR) survey, 97 percent of respondents said Web helped them understand buying process better and 100 percent said using Web helped them understand home values better. Web-enabled homebuyers like you are taking a more active role in researching homes and neighborhoods. You also now spend less time with real estate professionals once you have completed your research. Internet homebuyers also used Web effectively to filter out properties that did not interest them, visiting 6.1 homes on average versus 15.4 for traditional buyers.

Today, you can view photos and detailed information for hundreds of properties in time it used to take to visit a single one. And Web provides much more opportunity than simply moving print listings online. The growing availability of residential high-speed Internet connections has boosted popularity of virtual tours and interactive maps, providing consumers with powerful and flexible visual search tools.

Investment Property Part 2 of 2: What You Need to Know Before You Buy

Welcome to second portion of a two-part series on investment property. In first installment, "How Not to Become a Slumlord", we discussed a little of what it takes to own and operate a property as well as some of do's and don'ts of property management trade. In this second segment, we will be discussing some pre-investment principles that will help you maximize your ROI.

There are three basic principles of investment property that you should know before you buy an investment property in order to avoid overpaying:

Time How long do you plan on owning investment property? As with stocks and bonds, value of your investment may change significantly during time you own it. While most real estate will appreciate in value over time, there are frequent fluctuations in short-term market. If you plan on selling your investment property after less than five years, be prepared to accept investment risk inherent in a shorter time horizon. This is especially true if you bought your property in an overheated real estate market. If this is case, you could find yourself losing money if market has taken a temporary downturn, especially if you've had to make major repairs to property.

If you plan on owning property for next twenty to twenty-five years, it's almost certain that your investment property will appreciate in value. There's also a good chance, however, that you'll have to make major repairs like replacing roof, wiring system, or major appliances like a water heater or refrigerator. Of course, these repairs will be offset by fact that you've had/will have twenty plus years to recoup cost. If on other hand, you're only planning on owning an investment property for next five years, buying a "fixer up'er" can eat up all profits you would have made during your shorter investment horizon.