Peter Miller on Real Estate: How to Create New Homebuyers With Old Computers

Donating that old computer could bring you more than just good will.

September 1, 1999

As I write, home sales are strong, stock prices are fluctuating but high, and inflation is essentially invisible, all of which is good news for just about everyone.

For you in real estate, much of the prosperity is associated with the magical box on which you're reading these words. Almost 90 percent of all REALTORS® use computers, 62 percent use E-mail and the Internet for business, and almost 30 percent--more than 200,000 NAR members--operate personal Web pages, according to the 1999 NATIONAL ASSOCIATION OF REALTORS® Member Profile.

One result, says NAR, is that computerized professionals earn $22,600 more a year than competitors without computer skills.

We see the same pattern in the general population. Among the working poor and unemployed, 39 percent are online, compared with 76 percent of all employees generally, according to a 1999 survey by Rutgers University.

And we see something else.

In the midst of what Woody Guthrie called "our pasture of plenty," we find that the fruits of a booming economy haven't reached everyone.

Edward N. Wolff, an economist at New York State University, points out that "median wealth [the wealth of the household in the middle of the distribution] was about 10 percent lower in 1995 than in 1983." According to his April study, "Recent Trends in Wealth Ownership," the "percentage of households with zero or negative net worth increased from 15.5 percent in 1983 to 18.5 percent in 1995."

In essence, the study says, we're wealthier as a nation, but there's more wealth at the top of the economic pyramid and less wealth for everyone else.

The study shows that in 1995 the top 1 percent of all households controlled 39 percent of our total household wealth. The top 10 percent of all households—those with a net worth of more than $352,000—held 87.5 percent of all financial assets, such as stocks, bonds, and investment real estate.

The yawning gap between rich and poor should comfort no one. If you're in real estate, you want an expanding economy that benefits as many people as possible for two reasons. First, more people with more dollars create a larger pool of potential buyers. Second, more people with more dollars suggest a larger number of owners can trade up.

"Median financial wealth" (that is, cash, stocks, bonds), says Wolff's study, "was less than $10,000 in 1995, indicating that the average American household had little savings available for its immediate needs."

All of this raises an idea.

A huge number of real estate practitioners use computers. The brokerage community would benefit from more people having more money. And computer usage equates with higher household income.

Are you using the latest computers? Do you have the fastest machines, the newest software, and enough electronic bells and whistles to start an orchestra? If yes, great.

But what about your old machine? Maybe your clunker is stowed in a closet gathering dust. If so, such equipment could be put to better use. Old equipment may not be as fast or wondrous as the latest computers and software, but if it works, it can open new worlds to those without such equipment.

For example, in 1993 when the 66MHz Pentium was introduced, it was a technological breakthrough. Now it's a turtle compared with today's chips. But think back to 1993. Didn't people have word processors, spreadsheets, and E-mail? So don't throw out old computers, software, and manuals.

Instead, contact local community groups and ask whether they can use the equipment or know someone who might benefit. Or, organize a used-computer bank or create a donor program among local brokers.

In my community there's a nonprofit group that does nothing but recycle old computers. It takes computers from donors—often corporations unloading hundreds of machines at one time—and tries to place them with a target population, those with household incomes of $30,000 or less.

For $50, someone could buy a 486 machine with a monitor from the group. Pentium 75s go for $190. But I suspect the prices are flexible.

So turn that old computer into an asset. It's a decent thing to do, you'll create more homebuyers, and—as an added bonus—some extra space will appear in your closet or basement.

Peter G. Miller, OurBroker®, also writes a column that appears in Realty Times each Tuesday, and is the author of The Common Sense Mortgage, the best-selling guide to real estate finance. He's the original creator and host of the Real Estate Center with America Online and maintains a consumer information site at OurBroker.com.

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