Get inside their heads

What Texas buyers and sellers want … plus, what they think of you.

by Marty Kramer   Ever try to give a present to someone you didn’t know very well? Not an easy task. The same holds true when you attempt to serve customers and clients but don’t know what they want.

You’re in luck. The Texas State Report from the 2003 NAR Profile of Home Buyers and Sellers offers you 112 pages of statistics about buyers’ and sellers’ opinions, desires, and demographics. You can download the entire report from TexasRealtors.com. Here is a summary of the findings.

Sellers

What do you want from me?

When you compete for listings, do you tell prospects you can perform the tasks sellers want most? You do if you highlight your ability to price the home competitively, sell the house within their time frame, and find a buyer for the home.

Get there first

You have a lot of competition out there, but if you get to a prospect before other agents, you will have eliminated your rivals nearly two-thirds of the time. That’s because 62% of sellers contacted only one agent and selected that agent to help them buy a home. Twenty-two percent spoke with two agents, and 12% got in touch with three before making a choice. The numbers were almost identical for buyers when selecting an agent.

The power of referrals

Most sellers rely on some type of referral or previous relationship when selecting a real estate agent, with 33% saying their agent was referred by (or is) a friend, neighbor, or relative. Ten percent responded that their agent was referred by their employer or a relocation company, while 5% received a referral from another real estate broker. Thirty-one percent used an agent who had helped the seller during a previous sale or purchase.

Setting the stage for repeat business and referrals

When asked whether they would use the same agent again, four of five sellers responded definitely (55%) or maybe (23%). About 10% said they probably would not, while 11% expressed that they definitely would not use the same agent again.

Guard your reputation

An agent’s reputation topped the list as the most important factor sellers consider when choosing an agent. Sixty-one percent of buyers cited an agent’s reputation, while 27% looked for an agent’s knowledge of the neighborhood, and 8% considered an agent’s association with a particular firm most important.

For Sale By Owner

How many go it alone and why?

Most sellers rely on real estate professionals to help sell homes. Eighty-one percent used an agent, while an additional 4% tried to sell their homes themselves before using an agent. Only 11% sold their homes without ever using a real estate agent.

The most common reason sellers steer clear of agents is not that they want to avoid paying a commission. Half of all FSBOs sold their homes themselves because the buyers were relatives, friends, or neighbors (25%), or the buyers contacted the sellers directly (25%). Nineteen percent of respondents did indicate that not paying a commission was the main reason, and 6% claimed they did not want to deal with an agent.

What do FSBOs find most difficult about selling their homes? Thirty-six percent claimed that understanding and performing the paperwork was the hardest aspect.

Of those who sold their homes themselves, 44% said they planned to go it alone again next time they sell, while they remainder were evenly split between planning to use an agent and not having decided.

Buyers

Moving (but not too far) to a desirable neighborhood

About two-thirds of homebuyers purchased a home 20 miles or less from their previous residence. The most frequently cited factors that influence buyers’ decisions of where to buy a new house were neighborhood (69% of respondents said this influenced their decision), proximity to job/school (38%), proximity to friends/family (35%), and schools (28%).

Getting what they want

Buying a house involves some compromise, right? Apparently not–at least for one-third of Texas buyers who claimed they did not compromise at all. Of those who did, they were most likely to compromise on how far the house is from work/school (22%), size of house (21%), and lot size (17%).

Timing

How long a buyer spends looking for a house depends on market factors, the buyer’s situation, and other variables. The survey showed that half of all buyers spend six weeks or less actively searching for a home. Twelve percent find their house in one week or less, and 10% take 30 weeks or longer. About one in six buyers walk through at least 25 homes before finding the property they purchase.

How they found the home

What do Texas buyers consider the most useful source of information in their home search? Real estate agents. Sixty percent responded that they found real estate agents very useful in their home search, and another 20% replied that agents were somewhat useful. Other top information sources included the Internet (47% deemed it very useful), yard signs (32%), builders (23%), and open houses (19%). Only 8% considered newspapers ads very useful.

As expected from the above results, the number-one source for learning about the home eventually purchased was real estate agents (40%), followed by the Internet (17%), builders (15%), and yard signs (14%).

Finding what they weren’t looking for online: you

Texas homebuyers are above average in their use of the Internet to find a home. A total of 78% percent of Texans go online during their home search, with slightly more than half of all buyers reporting they used the Internet frequently. Nationally, those figures are 71% and 42%. What are they looking for? Properties. Nine of 10 buyers who used the Internet were searching for properties, while only 3% were looking for a real estate agent.

Although very few buyers went online looking for an agent, 19% found one while there.

Getting satisfaction

Buyers generally gave real estate agents high marks when asked how satisfied they were with their agent’s skills and level of service. The lowest marks from eight categories came in technology skills and negotiation skills, both of which garnered a 10% rate of dissatisfaction. Only 66% of buyers were very satisfied with their agent’s technology skills, while 72% reported being very satisfied with their agent’s negotiation skills. The highest marks were given for people skills (83% very satisfied), knowledge of the purchase process (80%), and speed of response (79%).

The difference between first-time and repeat homebuyers

As a group, first-time homebuyers are younger and make less money than repeat buyers. They typically buy less-expensive homes. You probably expected that. But in many ways, first-timers have the same attitudes and expectations as move-up buyers. Not all, though.

Are first-timers choosier?

Some key differences show up in how willing buyers are to compromise on selection criteria for homes. First-timers were more likely than repeat buyers to compromise on neighborhood quality and distance from work or school, but slightly less likely to make concessions regarding the size of the house, planned expenditures for the house, lot size, and condition of the house.

Repeat buyers take less time … and more

After three weeks of actively searching for a home, only 23% of first-time buyers had located the house they eventually purchased, while during that same time period, 34% of repeat buyers found their next home. However, no first-time buyers participating in the survey took more than a year in their search, but 5% of experienced buyers stretched their search beyond the one-year mark.

People buying their first home also walk through fewer houses before choosing the one they will purchase. Twenty-eight percent walked through four or fewer houses, while only 15% of repeat buyers made a choice by the time they viewed four properties in person.

First-time buyers rate you higher

One reason you may want to work with more first-time buyers is that they give their agents higher marks than repeat buyers. For every question asked, first-time buyers expressed a higher level of satisfaction with their agents’ skill and service. The two areas with the biggest gaps in satisfaction levels were negotiation skills (80% of first-time buyers were very satisfied vs. 65% of repeat buyers) and knowledge of the area (80% vs. 67%).

The difference in satisfaction might be attributed to the fact that more first-timers consistently reported receiving various benefits from their agents than repeat buyers. For example, 53% of first-time buyers said their agent negotiated better contract terms, compared to 37% of repeat buyers.

Different needs

You would expect first-time homebuyers to want different things from you than those who have done this before. This disparity showed up in two places. Only 3% of repeat buyers indicated that what they wanted most from their agent was help figuring out how much home they could afford. Nineteen percent of first-timers wanted this assistance most. Repeat buyers, though, were more interested in what comparable homes were selling for, with 15% designating this as the most important service desired, compared with only 4% of first-time buyers.

Now that you know a bit more about what buyers, sellers, FSBOs, and first-timers want, you can tailor your marketing and your service to better meet their needs.

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Find out what sellers want most from agents.

Find out what buyers want most from you.

Find out the number of homes buyers walk through before choosing a home.

Learn what online home seekers consider the most useful online information.