Most Buyers Search Online
Most buyers search online, then contact agent
Gimme Shelter, By Tom Kelly
How much has the Internet influenced real estate buyers? According to a recent survey by the National Association of Realtors (NAR), 80% of all buyers seeking to purchase a home did at least some searching online — up from just 2% in 1995.
“Most home buyers begin the search process online, but most often learn about the home they buy from a real estate agent,” said David Lereah, NAR’s chief economist. “Even though many other buyers are first learning about the home they buy online, they’re still purchasing through an agent — they value the skills professionals bring to the table.”
The survey revealed that the most important factor for both buyers and sellers was word-of-mouth recommendation. The most important criteria in choosing an agent were reputation and trustworthiness. “These personal qualities underscore the fact that real estate is very much a face-to-face people business,” said Thomas Stevens, NAR president. “It appears that an individual agent’s reputation, trustworthiness and knowledge of the market are more important factors than the company they work for or business model. What people want is competence and trust.”
NAR’s Profile of Home Buyers and Sellers, based on more than 7,500 responses is the latest in a series of surveys evaluating demographics, marketing, and other characteristics of home buyers and sellers.
The study showed that 81 percent of home buyers who used the Internet to search for a home actually purchased through a real estate agent, in contrast with 63 percent of non-Internet users, who were more likely to purchase directly from a builder or from an owner they knew in advance of the transaction.
The median age of a first-time buyer was 32, a fairly consistent finding since 1981, with a median income of $58,300. The buyer purchased a home costing $165,000, with plans to stay in that home for six years. The median down payment by first-time buyers was 2 percent, although 45 percent purchased a home with no money down. Of first-time buyers who made a down payment, 22 percent received a gift from a friend or relative, usually their parents.
The survey showed the typical homebuyer is 41 years old, earns $71,800 and purchased a home approximately 1,815 square feet for $214,000. They searched eight weeks and visited nine homes before making a decision. The typical repeat buyer is 47 years old, earns $81,900, purchased a home costing $249,000 and plans to stay in that home for nine years. They made a median down payment of 16 percent, but 11 percent paid cash for their property. Of those making down payments, 62 percent used the equity from their previous home. The survey revealed that the most important factor for both buyers and sellers was word-of-mouth recommendation. The most important criteria in choosing an agent were reputation and trustworthiness.
The typical repeat buyer is 47 years old, earns $81,900, purchased a home costing $249,000 and plans to stay in that home for nine years. They made a median down payment of 16 percent, but 11 percent paid cash for their property. Of those making down payments, 62 percent used the equity from their previous home.
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 an MLS.
“Our sense is that professionals will continue to experiment with business models and that the lion’s share of consumers will continue to opt for full-service brokerage,” Stevens said. “But there’s room for all ethical business practices in this industry.”
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 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.
