Archive for Lessons Learned from NAR Profiles
This is the sixth and last in a series – see all the posts
We’ll wrap up this series on the 2007 NAR Profile of Home Buyers and Sellers by looking at the information gathered about how home buyers use the Internet.
As you’re undoubtedly aware, home buyers are using the Internet more all the time. The NAR data shows: 71% in 2003, 77% in 2004, 79% in 2005, 80% in 2006, and 84% in 2007. It will be interesting to see if the numbers keep going up, or if the 16% who don’t use the Internet never will!
Comparisons Between Internet Home Buyers and Non-Internet Home Buyers
Here are some of the most interesting statistics about buyers on the Internet vs buyers who don’t use the Internet:
-
Buyers who use the Internet were more likely to work with an agent than those who did not use the Internet:
- 82% of Internet Buyers worked with an agent
-
65% of Non-Internet Buyers worked with an agent
- Buyers who use the Internet took slightly more time to find the home they wanted to buy:
- Internet Buyers took 8 weeks total, 2 were spent before contacting an agent
-
Non-Internet Buyers took 6 weeks, 1 was spent before contacting an agent
-
Buyers who use the Internet looked at more homes once they are working with an agent:
- Internet Buyers visited an average of of 12 homes
-
Non-Internet Buyers visited an average of 7 homes
How Internet Home Buyers Use the Internet
-
Internet Buyers use a variety of sites on the Internet, the most popular being:
- 54% used MLS websites
- 49% used Realtor.com (wonder how that got on the questionnaire?)
- 44% used a real estate company website
-
40% used a real estate agent website
This is the fifth in a series – see all the posts
NAR’s 2007 Profile of Home Buyers and Sellers contains some revealing insight into the relationship between home buyers/sellers and the agents they work with. We’re all aware that some people have very little respect for real estate professionals as a group. However, the statistics don’t reflect that.
To Use an Agent or Not
Interestingly enough, the profile indicates that 79% of the home buyers surveyed bought their home with the help of a real estate agent. And, 80% worked with just one agent during their home search. So, while you might have run into buyers who get multiple agents looking for their next home, it may not be the norm.
Should You Ask For a Buyer Representation Agreement?
Forty-three percent of buyers had a written Buyer Representation arrangement with their agent. And, more repeat buyers had a written arrangement than first-time home buyers. Certainly that indicates that as a home buyer gains experience, they realize how important buyer representation is.
If you’re hesitant to ask your clients to sign an agreement, take heart in the knowledge that it’s not that unusual. Since there are often spirited discussions on this topic, take a look at how the numbers came out:
| Type |
All Buyers |
First-Time Buyers |
Repeat Buyers |
| Written Arrangement |
43% |
41% |
45% |
| Verbal Arrangement |
19% |
21% |
18% |
| No Arrangement |
26% |
24% |
27% |
| Don’t Know |
11% |
14% |
9% |
The other interesting thing to note is that overall, 11% of buyers had no idea whether they’d signed an agreement or not! I guess a bit better education on the subject is required.
Read More→
This is the fourth in a series – see all the posts
Unless You’ve Been Living Under a Rock. . .
. . .you’re aware that the use of the Internet by home buyers has been steadily rising. According to NAR’s 2007 Profile of Home Buyers and Sellers, in 2003, 71% of buyers reported using the Internet. In 2007, that percentage is up to 84%.
The message bears repeating. If you’re a real estate professional without an effective Internet presence, you’re falling farther and farther behind. Not only are you handicapped in your ability to reach your prospective clients, but you’re also going to be hindered in your ability to effectively marketing listings - and your prospects know that.
The First Step Buyers Take
When asked what was the first thing that a buyer did to look for a home, their responses included:
- Looked online: 32%
- Contacted an agent: 20%
- Looked online for information about the buying process: 12%
- Looked in newspapers, magazines or home buying guides: 5%
Lessons learned? It’s interesting that 12% of buyers looked online for information on the buying process. If you’re looking for new original content for your website, how about a real down-to-earth buying guide?
I’m not referring to all those slick “10 Mistakes to Avoid” articles. If they really want information about the home buying process, it would be a great opportunity to write an introduction that explains an overview of the process in English, in a way that makes the visitor feel your concern for their welfare. (Remember, on the buying side, you want warm and fuzzy.)
Then, you could include an offer for a more detailed Home Buying Guide, which would give you the opportunity to obtain contact information and to start creating a relationship with that site visitor.
Educate Your Sellers
The information about how Buyers operate also provide some statistics that could be very helpful in educating your clients who are selling their home. I know that it is often frustrating for agents when their clients insist on using promotional methods that aren’t going to help sell their home.
Newspaper-type advertising is the thing I hear mentioned most often that fits into the “not useful but the client insists” category. Maybe some of the statistics will help if you find yourself in that position with a client.
First, you’ll notice in the statistics above, only 5% of buyers started their search by looking at newspapers. Then, there were these results:
|
Users Rated |
||
|
Used Frequently |
Very or Somewhat |
|
|
or Occasionally |
Useful |
|
| Internet |
84% |
99% |
| Newspaper Ads |
51% |
52% |
| Home Book |
31% |
34% |
Those statistics indicate that of the 84% of buyers who used the Internet, 99% of them found it to be a useful resource. The print media didn’t fare as well. Of the 51% of people who look in newspaper ads, only roughly half of them find the ads a useful tool. And, home books garnered even less enthusiasm. Only 31% of buyers even used them, and of those, only 34% found them to be useful.
Try including those types of statistics the next time you describe your marketing plans - and, let me know if it helps!
This is the third in a series – see all the posts
Differences in How Buyers and Sellers Choose Agents
NAR’s 2007 Profile of Home Buyers and Sellers pointed out some interesting differences in how buyers and sellers choose an agent. Keep in mind that the questionnaire that provided the basis for the Profile was sent to home buyers. The home buyers and sellers from the survey are actually the same individuals, answering from different perspectives.
The first thing that caught my attention was this statistic.
- Did the Seller use the same real estate agent for their home purchase?
- 47% - Yes
- 53% - No
I’m sure distance contributed to the reasons why the same agent wouldn’t be used for both a purchase and sale. However, the median distance the buyers moved, according to the Profile, was 13 miles, indicating that long distance moves were not the most common.
Priorities Change When Selling a Home
I wondered if anything in the Profile would indicate another reason why different agents were hired. I think part of the answer lies in the differences in how buyers and sellers choose an agent.
|
CRITERIA USED WHEN BUYING |
CRITERIA USED WHEN SELLING |
| Honest & Trustworthy - 28% | Reputation of Agent - 38% |
| Reputation of Agent - 22% | Honest & Trustworthy - 20% |
| Friend or Family - 17% | Friend or Family - 14% |
| Caring Personality /Good Listener - 10% | Caring Personality/Good Listener - 5% |
When an individual is selling their home:
- The reputation of the agent jumped 10% in importance.
- Honest and trustworthy still came in second, but even the importance of working with a friend or family decreased somewhat.
- The agent having a caring personality and being a good listener dropped in importance by 5%.
Lessons Learned
Agents need to market differently to buyers and sellers. The person looking to buy a home wants to work with someone who is warm and fuzzy: honest, trustworthy, caring and a good listener. And, that makes sense since they will be spending a lot of time with that agent .
Sellers indicated that the most important thing they wanted from a listing agent was to sell their home within a specific timeframe. Sellers are looking for someone who they think has that ability. So, the reputation of the agent is much more important, undoubtedly in terms of how effective that agent is in getting homes sold.
And, again, where reputation is an important criteria, it’s much more effective to illustrate your reputation than talk about it. A great question to ask your sellers, keeping in mind that you want to use open-ended questions, is something like this:
- How well did the timing of getting your home sold meet your objectives?
When the same person is both the buyer and seller, it means you must focus on reinforcing both sides of your personality and your business. For example, you can’t sacrifice showing your caring side to come across as an aggressive marketer. It’s an interesting line to walk.
Do you usually help your clients purchase a new home and sell their old one? How does your experience match with the responses in the NAR Profile?
This is the second in a series – see all the posts
Are You Surprised?
I was pretty surprised by the results from the NAR Profile when it comes to what buyers want most from their real estate agents. This is how the buyers identified the things they most wanted help on:
- 49% Finding the right home
- 13% Negotiating contract terms
- 11% Negotiating price
- 9% Completing paperwork
- 8% Identifying comparable homes and their final sales prices
- 5% Identifying how much to spend on a home
- 4% Find and acquire financing
-
3% Other
Are you surprised? No? Take another look at the results.
Here’s what surprised me. First, 49% of the buyers said they most wanted an agent’s help to find the right home. That surprised me because evidently despite all of the places on the Internet where consumers can go to look at homes, almost half of them still thought that an agent can do a better job of helping them find the right home.
The second thing that surprised me was that so few buyers thought that negotiating contract terms or price was the most important thing an agent can do for them. Granted, I’m not a real estate agent, but I’ve bought and sold homes, and worked with enough real estate professionals to know that very often, finding the right home is the easy part.
Negotiating contact terms and price, and keeping the deal together until you reach the closing table can be a challenge. And, while some consumers are probably good negotiators, I think this old saying applies to real estate as much as the law: “A lawyer who has himself as a client is representing a fool.” Or you could say, “A Buyer who has himself as a client (in negotiations) is representing a fool.” There’s just too much emotion and too many details.
So, what is the real estate marketing lesson learned? From my perspective, I think we need to get better at educating the consumer on the critical role an agent plays from the time the right home is found through to the closing table.
Think About This!
If the most important thing an agent can do for a buyer is find the right home – and — It’s becoming easier all the time for consumers to access MLS listings, take virtual tours, and so on,
Then
How important will an agent be over time?
What do you think?
