(This is Part 3 of a three-part series. Read Part 1, “Get rich in a niche” and Part 2, “Marketing to younger, first-time buyers can pay off.”)
The National Association of Realtors’ Profile of Home Buyers and Sellers for 2007 reveals some important secrets Realtors can’t afford to ignore. Here’s the inside scoop.
1. “Location, location, location” is still true
While people may debate what really matters most to homeowners, NAR’s research shows that the number one concern for all buyers (65 percent of all respondents) is “quality of the neighborhood.” Coming in second (50 percent) was “convenience to work,” while “overall affordability of homes,” “convenience to friends and family” and “quality of the school district” rounded out the top five.
The quality of the neighborhood was most important to married couples (68 percent), whereas single males were not nearly as concerned (56 percent). When working with buyers, be sure to explore what constitutes a “quality” neighborhood. Also recognize that couples will be less willing to compromise on this issue as compared to single men.
2. Give a little, take a little
Buyers, especially those in urban areas, were the most likely to compromise on the size and the planned expenditures on the home. They were the least likely to compromise on schools and quality of the neighborhoods. Only 2 percent of the respondents compromised on the distance from schools, 3 percent on the quality of the schools, and 5 percent on the quality of the neighborhood. Before showing property to your buyers who have children, carefully explore their expectations about both the quality and proximity of schools.
3. Correct pricing: the primary determinant of which properties sell
The next time a seller wants to “try it for while at a higher price” or a buyer wants to “steal a property,” here’s some data to share. Nationally, 36 percent of the properties sold at list price or higher. In the West, that number was 42 percent. Only 12 percent of the homes in the U.S. sold for 90 percent or less of ask price. In other words, properties sell when they are priced correctly. When they are overpriced, they languish on the market until the price is reduced to market level. Buyers can search for a steal, but once a property is correctly priced, it normally sells quickly.
4. Buyers look online first
As their first step in buying a home, 48 percent of all buyers either go online to view houses (32 percent) or to locate information about the home-buying process (16 percent). To address this consumer search pattern, link your Web site to your local multiple listing service as well as including a wide variety of items about the buying process. Consider offering a series of downloadable educational reports. Examples include explanations about FHA, HUD, foreclosures, how adjustable- and fixed-rate loans differ, closing processes, or how to save money on closing costs.
5. The Internet: more important than signs and agents?
One of the most surprising statistics from the NAR report was the steep decline in the number of buyers who located their property with a Realtor vs. on the Internet. In 1997, only 2 percent of the buyers found their property online, while 50 percent found their property through a real estate agent. In 2007, 29 percent of the buyers found their property online vs. 34 percent with a real estate agent. Buyers also found the Web to be more useful than working with agents. Seventy-eight percent reported that the Web was “very useful” vs. 70 percent who reported agents were very useful. In comparison, yard signs came in at 29 percent and open house at 24 percent.
6. Buying a home is still a real, not a virtual, activity
In 1995, Bill Gates predicted that real estate agents would become obsolete by the year 2000 because people would purchase their homes online. His prediction was wrong. The 2007 Profile shows that only 1 percent of all buyers did not visit the home they purchased prior to closing it. In fact, 81 percent of all buyers viewed the homes they purchased between two to six times. Home buying is an emotional process for most people, and looking at online pictures can never duplicate the sense of what it’s like to walk through the property. When it’s time to purchase, 99 percent of us want to see what we are buying in person.
In 2008, many of the traditional face-to-face fundamentals are still in play but so are the new Web realities. To prosper in 2008, you must address both.
Bernice Ross, national speaker and CEO of Realestatecoach.com, is the author of “Waging War on Real Estate’s Discounters” and “Who’s the Best Person to Sell My House?” Both are available online. She can be reached at email@example.com or visit her blog at www.LuxuryClues.com.
What’s your opinion? Send your Letter to the Editor to firstname.lastname@example.org.