Every year, NAR (the National Association of Realtors) conducts a survey, asking people who bought or sold a home in the previous 12 months a variety of questions. The questions are geared to find out what is important to consumers, how satisfied they were with their experience, how they found their home and more. I’ve summarized some of the survey results below, you can read the complete results on the NAR website. Check it out and see how your opinions compare to the average.
Survey Shows Buyers and Sellers Use Technology and Want Personal Services
Technology is dominating many aspects of the real estate transaction process, but the most important factors are purely human, according to a large survey of home buyers and sellers.
The 2006 National Association of Realtors® Profile of Home Buyers and Sellers, based on more than 7,500 responses to a questionnaire mailed to a large national sample of consumers located through county deed records, is the latest in a series of surveys evaluating demographics, marketing and other characteristics of home buyers and sellers.
Most sellers prefer full-service brokerage, where professionals handle all aspects of the transaction process from listing to closing, including preparation of the home for sale, pricing, marketing, showing the home, contract negotiations and closing.
The survey finds 83 percent of sellers use full-service brokerage, 9 percent limited services and 8 percent use minimal service, such as simply listing a property on a MLS.
A downtrend in the number of for-sale-by-owner transactions is clear, currently at a record-low market share of 12 percent; it was 13 percent in 2005. The level of FSBOs has been on a sustained decline since reaching a cyclical peak of 18 percent in 1997. In addition, a higher share of FSBO properties are not placed on the open market – 40 percent of those transactions were "closely held" between parties who knew each other in advance (family or acquaintances), up from 39 percent in 2005 and 32 percent in 2004.
The median home price for sellers who use an agent is 31.9 percent higher than a home sold directly by an owner; $247,000 vs. $187,200.
The most difficult tasks reported by FSBOs are preparing the home for sale, understanding and performing the paperwork, and selling within the desired time frame.
To find a real estate agent, the survey shows the most important factor for both buyers and sellers is word-of-mouth recommendation. The most important criteria in choosing an agent are reputation and trustworthiness.
The biggest factors influencing neighborhood choice are quality of the neighborhood, convenience to job and convenience to family and friends. Other factors with high responses include neighborhood design, convenience to shopping and quality of the school district.
The typical repeat buyer is 47 years old, earned $81,900, purchased a home costing $249,000 and plans to stay in that home for 9 years. They made a median downpayment of 16 percent, but 11 percent paid cash for their property. Of those making downpayments, 62 used the equity from their previous home.
Buyers used a wide array of resources in searching for a home: 85 percent used a real estate agent, 80 percent the Internet (up from 77 percent in 2005), 63 percent yard signs, 55 percent print or newspaper ads and 47 percent attended open houses. Smaller categories include a home book or magazine, home builders, television, billboards and relocation companies.
When asked where they first learned about the home purchased, 36 percent of buyers identified a real estate agent; 24 percent the Internet; 15 percent from yard signs; 8 percent from a friend, neighbor or relative; 8 percent home builders; 5 percent a print or newspaper ad; 3 percent directly from the seller; and 1 percent a home book or magazine.
Local metropolitan multiple listing service (MLS) Web sites were the most popular Internet resource, used by 53 percent of buyers, followed real estate company sites, 41 percent; real estate agent Web sites, 40 percent; local newspaper sites, 14 percent and real estate magazine Web sites, 6 percent; other categories were smaller.
In order of priority, home buyers want agents to help find the right house, negotiate the terms of the sale, determine what comparable homes were selling for, help with price negotiations, help with paperwork, help determine how much they could afford and help with finding and arranging financing. Three-quarters of buyers use only one agent in the search process.
When asked about the benefits provided by an agent, 55 percent of buyers said agents helped them understand the process, 40 percent said their agent pointed out unnoticed features or faults with the property, 37 percent indicated the agent improved their knowledge of the area, 36 percent said agents negotiated better contract terms, 35 percent reported a shortened search process and 29 percent said their agent negotiated a better price. Other benefits mentioned include narrowing or expanding the search area, providing a better list of mortgage lenders and providing a better list of service providers.
Of buyers who use an agent, 64 percent choose a buyer’s representative. Satisfaction with real estate agents is very high, with 85 percent of all buyers saying they were likely to use the agent again or recommend to others. Almost all buyers were satisfied with their agent’s honesty and integrity, with 83 percent being very satisfied.
The median age of a home seller is 46, with an income of $83,800. Seventy-two percent are married couples, had been in their home for six years and moved a median distance of 17 miles. Ninety percent of sellers were satisfied with the selling process.
Forty-four percent of sellers chose agents based on a referral by a friend, neighbor or relative, and 30 percent used their agent previously; 69 percent of sellers contacted only one agent. Reputation and trustworthiness are the most important factors in choosing an agent; 82 percent said they were likely to use the same agent again or recommend to others.
The 2006 National Association of Realtors® Profile of Home Buyers and Sellers can be ordered by calling 800/874-6500, or online at http://www.realtor.org/newresearch. The cost is $50 for NAR members and $125 for non-members.
