How Well Do You Know Today’s Home Buyer?
Action Items for Your Business Based on NAR’s 2011 Home Buyer & Seller Profile
Each year, the National Association of REALTORS® publishes results from its comprehensive survey of home buyers and sellers across the country. The report provides a compelling picture of real estate clients today. It also delivers interesting insights into how responses have changed over time. Let’s take a look at the data and consider possible actions you could take in your business in response.
Note: This month, we tackle buyers. Look for an article on sellers in the March issue.
Buyer demographics shifted this year with the end of the homebuyer tax credit and with increased demands on the financing side. The average buyer is older, has a higher household income and is more likely to be married.
Median Age: 45
Household Income (2010): $80,900
Married Couples: 64%
Highest since 2001
Single Female: 18%
Lowest since 2004
First-Time Home Buyers: 37%
Average from 2001-2011: 41%
Action Items: If you notice that your customers tend to be single and you want to diversify your clientele, consider ways to increase your visibility to families—such as advertising in a nearby preschool’s newsletter. On the flip side, can you highlight mortgage products or programs that can make homeownership a more viable option for single people or first-time buyers?
Characteristics of Homes Purchased
Today’s home buyer is more likely to be purchasing a previously owned home and is expecting to stay put longer. Median price and square footage is up somewhat over 2010.
New v. Previously Owned Homes
Previously Owned Home: 84% Previously Owned Home: 72%
New Home: 16% New Home: 28%
Median Price: $190,000
2010: $179,000Size: 1900 sq. ft.
2010: 1780 sq. ft.
Expected Length of Tenure (Median): 15 years
2010: 10 years
Action Items: Do you expect new home sales to increase in the next few years? If so, you might look for opportunities with a homebuilder. Knowing that buyers expect to be in homes longer, can you target your marketing language to reflect this mindset (“room to grow,” “never move again,” “flexible layout accommodates changing needs”)?
Reasons for Purchase
The primary reason for purchasing a home is still the “Desire to own a home of my own” (27%), but it is down from last year (31%). More homeowners are being forced to move due to employment factors.
Desire to own a home: 27%
Job-related relocation or move: 10%
Action Item: Does your brokerage have a relocation department that you might connect with? Are there other ways to get your information in front of those moving to your area?
Home Buying Process
2011 was the first year in which more buyers credited the Internet for finding the home they purchased (40%) than their agent (35%). Still the Internet and agents remain neck-and-neck as information sources.
First Step Taken in Process
Looked online for properties for sale: 35%
Contacted a real estate agent: 21%
Looked online for information about the home buying process: 10%
Information Sources Used in Search (Top Five)
Real estate agent: 87%
Yard sign: 55%
Open house: 45%
Print newspaper ad: 30%
Action Items: Are you comfortable with your level of online outreach to buyers? If you want to increase your online presence, consider investing in your website’s home search, advertising on a major player like Realtor.com or blogging about the home buying process. Are you surprised that 30% still reference a print newspaper ad? With most agents cutting back on print advertising, perhaps you’ll go against the grain and take a chance on newspaper ads.
What Buyers Want
As you craft your marketing message, focus on telling buyers what you can do for them rather than on tooting your own horn. So what is it exactly that buyers expect from you? Read on…
What Buyers Want Most from Real Estate Agents (Top Three)
Help find the right home to purchase: 55%
Help with the price negotiations: 13%
Help buyer negotiate the terms of sale: 12%
Action Items: Do you set up a drip campaign that matches your buyer client’s specifications and let it go at that? Perhaps it’s time to go the extra mile to seek out a home that might appeal to them but lies just outside of their stated area, price range or style.
How Buyer Found Agent (Top Three)
Referred by (or is) a friend, neighbor or relative: 41%
Used agent previously to buyer or sell a home: 9%
Internet Web site: 9%
Action Items: How much time are you focusing on maintaining relationships with existing clients and contacts v. looking for clients online? The survey tells us that most clients begin their home search online by looking at properties. Yet most continue to find their agent through personal relationships.
Most Important Factors When Choosing an Agent (Top Five)
Agent is honest and trustworthy: 30%
Reputation of agent: 20%
Agent is friend or family member: 15%
Agent’s knowledge of the neighborhood: 14%
Agent has caring personality/good listener: 13%
Action Items: What are you doing to demonstrate characteristics of honesty and trustworthiness to potential clients? Consider posting testimonials on your website or encouraging clients to review you on third-party sites like Google Places. Since buyers care about your knowledge of the neighborhood, consider highlighting your knowledge through posts to social media, videos on your website or reviews of local businesses on a site such as Yelp. And work to develop your active listening skills with current and potential clients.
What conclusions do you draw from the data in the home buyer profile? Share them in the comments section below.
ACCREDITED BUYER’S REPRESENTATIVE COURSE AT KGVAR
Thursday, May 31 – Friday, June 1 | 8:30am – 5:00pm
Kingman/Golden Valley Association of REALTORS®
Instructor: Evan Fuchs, ABR, CRS, GRI
Thursday, August 23 – Friday, August 24 | 8:30am – 5:00pm
Sedona/Verde Valley Association of REALTORS®
Instructor: Holly Mabery, ABR, GRI
$179 (includes lunch) | Register Online:http://www.regonline.com/2012abr
This class is normally priced at $295—a savings to you of $116!
CE: 9-agency, 3-disclosure
When you can’t count on the market, you have to count on your skills! This ABR course sets the foundation of skills and resources you need to help you succeed in today’s marketplace as a buyer’s representative. Topics covered include: agency relationships, duties to clients, marketing fundamentals, the interview & counseling session, buyer representation agreements, building buyer loyalty and more.
Take the first step toward earning your ABR designation. Learn more at www.rebac.net.