Thursday, January 30, 2014

What do Consumers Want When Choosing a Real Estate Professional?

According to the National Association of REALTORS® Texas buyers continue to face tighter credit standards than seen in previous years. This year’s report continued to show an elevated share of married couples and suppressed levels of single buyers, similar to last year.  Married couples who purchased a home have the advantage of more buying power and added financial stability—their typical household incomes are higher than single households.

Due to suppressed inventory levels in many areas of the country, buyers are typically buying more expensive homes as prices increase. While the search time for buyers stayed the same length as in previous years, the selling time for sellers dropped substantially.

Buyers need the help of a real estate professional to help them:

  1. find the right home for them
  2. understand the process, and
  3. negotiate terms of sale

Sellers, as well, turn to professionals to help them:

  1. sell their homes within a specific timeframe
  2. market their home effectively and
  3. find the right buyer

Despite the changes observed this year in the housing market, the importance of the real estate professional in the transaction remains clear. As inventory tightened in many areas of the country in the past year, buyers are most often looking for real estate agents to help them find the right home: 88 percent of home buyers purchased their home from a real estate agent or broker—up from 69 percent in 2001. For most buyers, referrals continue to be the primary method for finding an agent, and most buyers only interviewed one agent during their search process.

Sellers place a high importance on the reputation of the agent as a factor in hiring them. Sellers also find a high importance in whether the agent is honest and trustworthy. Sellers trust their agent to be able to perform the same four tasks as in previous years:

  1. help selling the home within a specific timeframe
  2. helping the seller market the home to potential buyers
  3. help in finding a buyer for the home, and
  4. help in pricing the home competitively.

For-Sale-by-Owner (FSBO) Sellers

· The share of home sellers who sold their home without the assistance of a real estate agent was nine percent nationally and six percent in Texas. Forty-four percent overall and 33 percent in Texas knew the buyer prior to home purchase.
· The primary reason that sellers choose to sell their home without the assistance of a real estate agent to a buyer they did not know was that they did not want to pay a fee or commission (46 percent nationally, 44 percent in Texas).
· Approximately one-third of FSBO sellers took no action to market their home, and 64 percent did not offer any incentives to attract buyers overall. In Texas, 38 percent of FSBO sellers did not market and 56 percent did not offer incentives.
· The typical FSBO home sold for $184,000 compared to $230,000 among agent-assisted home sales nationally. In Texas, the typical FSBO home sold for $153,500 compared to $200,000 among agent-assisted homes. Although there is some success in FSBO sales in Texas, it is evident sellers benefit financially by using a real estate professional.

As the market changes and evolves, the need for a professional to help with the transaction has increased. More buyers and sellers are turning to professionals to help them with their transaction and satisfaction with agents continues to be high.

Excerpts from the 2013 Profile of Home Buyers and Sellers Texas Report prepared by the National Association of REALTORS®