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These days, anyone in the market for a new home or
a beachfront condo can get a better idea of what's available by
browsing the Internet instead of the Sunday paper. According to
the National Association of Realtors, there are now some half-million
Web sites in cyberspace hawking dream homes.
The Internet has been an important selling tool for
the real-estate industry, for nearly a decade. But during the recent
residential boom, some have taken it to a new level, using the Web
as the primary marketing tool to snare buyers for preconstruction
projects which exist only in the developer's imagination. For this
class of sellers, the Web has replaced the sales center; the virtual
tour has nosed out the model unit.
Consumers need to exercise caution, experts say, before
leaping into an investment in a property that, as the market softens
and some projects inevitably fall by the wayside, might never be
anything more than a computer-generated fantasy.
The rise of virtual marketing
"Historically, the sales office would open before there was a project," says Mark Zilbert of South Florida's Zilbert Realty Group, which specializes in Internet sales. "But with the emergence of the speculator market, which really drove preconstruction sales, we entered the era of the instant sellout. By the time the sales office was built, there was nothing left to sell."
While developers were once leery of Internet listings, Zilbert says, broader outreach at lower cost has converted many to the gospel of virtual marketing.
"When they have a project to launch," he says, "if
they make an upfront investment in putting electronic e-mail together,
the lure of the project gets a lot more play than it would have
three or four years ago, when preconstruction was still sold primarily
through advertising and person-to-person contact. We can e-mail
tens of thousands of users, and the cost is minimal compared to
direct mail."
An attractive, well-designed Web site is now a must for large projects, says Liam Sullivan, spokesperson for Cotton & Co., one of the country's largest real estate marketing firms. The company currently has more than 60 Web sites up and running for real estate projects all over the U.S. and the Caribbean. Examples include Live Lucaya in the Bahamas, Wight Canyon near Lake Geneva, Wis., Grey Oaks Country Club in Naples, Fla., and Grande Dunes in Myrtle Beach, S.C.
"It's a tool that people have come to expect," Sullivan
says. "People want to shop from their living rooms. Eventually they
might visit the project site, but some of them buy just off the
Web."
Sullivan says virtual tours using sophisticated technology can convey a much better idea of what a project will look like than a visit to a construction site.
"Some projects may be years away from completion,"
he says. "There's no other way to get an accurate sense of what
it's going to look like when all phases are complete. With technology,
we can even take the dimensions of the golf course and virtually
re-create it."
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