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First Time Home-Buyers Up Slightly

First Time Home-Buyers Up Slightly

• First-time home buyers have risen in market share – to 41% of transations from 39% last year – and plan to own their homes for 10 years, up from seven years in 2007.
• The median age of first-time buyers is 30, down from 31 in 2007, and the median income was $60,600. The typical first-time buyer purchased a home costing $165,000.
• The typical repeat buyer is 47 years old, earned $88,200, purchased a home costing $236,000 and has plans to stay in that home for 10 years.

Downpayments on the Rise

• The median downpayment by first-time buyers was four percent, up from two percent in 2007.
• The number of buyers purchasing with no money down fell from 45% in 2007 to 34% in the current survey.
• Among first-time buyers who made a downpayment, 69% used savings and 26% received a gift from a friend or relative, typically from their parents. Another seven percent received a loan from a relative or friend, while 16% tapped into a 401(k) fund, stocks or bonds.
• 92% of buyers chose a fixed-rate mortgage.
• Repeat buyers made a median downpayment of 15% , but 10% paid cash for their property.

Buyers and Sellers Use Agents

• 81% of home buyers and 84% of sellers used a real-estate professional, comparable to 2007.
• Nearly nine out of 10 home buyers and sellers would definitely or probably use the same agent again or recommend him or her to others, consistent with 2007 .
• 38% of sellers found their agent as a result of a referral, while 26% used the agent in a previous home purchase. Similarly, 43% of buyers relied on referrals to find an agent, while 18% of repeat buyers used an agent from a previous transaction.
• Only one percent of sellers chose an agent based on his or her commission.
• 46% report that the real estate agent initiated a discussion of compensation, while 24% of sellers brought up the topic and the agent was willing to negotiate the commission or fee.
• 13% percent of sellers did not know commissions and fees are negotiable.
• The level of ‘for-sale-by-owner’ transactions was 13%, up slightly from a record-low market share of 12% in both 2007 and 2006. The level of homes sold without professional representation has trended lower since reaching a cyclical peak of 18% in 1997.
• Factoring out properties that were never placed on the open market, the actual number of homes sold without professional assistance is seven percent. This matches the results in the 2007 study and marks a downtrend from 10% sold on the open market in 2004.
• The median home price for sellers who used an agent was $211,000 vs. $153,000 for a home sold directly by an owner, though unassisted sellers were more likely live in rural areas or small towns where sellers are more likely to know potential buyers.
• The most difficult tasks reported by unrepresented sellers are selling within the planned length of time, getting the right price, preparing the home for sale, and understanding and performing paperwork.

Foreclosure Purchases Higher

• The percentage of buyers who purchased a home in foreclosure jumped to six percent of transactions in the 2008 survey, from one percent in 2007.
• Another 38% of buyers considered purchasing of a home in foreclosure but did not, primarily because they could not find the right home.

Features and Incentives Up

• Environmentally friendly features were cited as desirable by 90% of buyers. Heating and cooling costs were of primary importance, followed by energy efficient appliances and energy efficient lighting
• 42% of sellers offered incentives to attract buyers, such as assistance with closing costs or home warranty policies.

Additional Demographic Information

• The median age of home sellers was 47 and median income was $91,000.
• 61% of buyers are married couples, 20% are single women, 10% single men, 7% unmarried couples and two percent fall into other categories.
• 26% of buyers are non-white, nine percent were born outside of the US, and four percent primarily speak a language other than English.
• 78% of all respondents purchased a detached single-family home, 9 percent a condo, 8 percent a townhouse or rowhouse, and 5 percent some other kind of housing.
• 55% of all homes purchased were in a suburb or subdivision, 17% were in an urban area, 16% in a small town, 10% in a rural area and two percent in a resort or recreation area. The median distance from the previous residence was 12 miles.
• The typical home sold for 96% of the listing price, and 86% of sellers were satisfied with the selling process.
• 52% of sellers were trading up to a larger home, while 22% were downsizing.
• Overall, buyers searched a median of 10 weeks and viewed 10 homes.
• Nearly nine out of 10 people consider their home a good investment, and almost half see it as a better investment than stocks.
• 15% of buyers own two or more homes.

About the study: The 2008 National Association of Realtors Profile of Home Buyers and Sellers is the latest in a series of large national NAR surveys evaluating demographics, marketing, preferences and experiences of home buyers and sellers. NAR mailed an eight-page questionnaire in August 2008 to a national sample of 133,000 home buyers and sellers who purchased their homes between July 2007 and June 2008, according to county records. There were 10,053 usable responses and the adjusted response rate was 7.9%. All information is characteristic of the 12-month period ending in June 2008 with the exception of income data, which are for 2007. Because of rounding and omissions for space, percentage distributions for some findings may not add up to 100 percent.

First Stop for Home Buyers – Internet Agents

An overwhelming majority (87%) of recent home buyers in the US say they used the internet as an information resource during their home-buying process, and nearly one-third say they first learned about their newly purchased home from an online channel, according to a study from the National Association of Realtors (NAR), writes MarketingCharts.

Though the internet was the most popular source, buyers also cited information from real-estate agents (85%), yard signs (62%), open houses (48%) and print or newspaper ads (47%). Fewer buyers relied on home books or magazines, home builders, television, billboards and relocation companies, the study said.

When asked where they first learned about the home they purchased, 34% of buyers said a real-estate agent; 32% cited the internet; 15% said from yard signs; 7% said from a friend, neighbor or relative; 7% said home builders; 3% said from a print or newspaper ad; 2% learned directly from the seller; and 1% from a home book or magazine.

First-Time Home Buyer Tax Credit Fact Sheet

 

Who is Eligible

• The $7,500 tax credit is available for first-time home buyers only.
• The law defines a first-time home buyer as a buyer who has not owned a home during the past three years.
• All U.S. citizens who file taxes are eligible to participate in the program.

Income Limits

• Home buyers who file as single or head-of-household taxpayers can claim the full $7,500 credit if their adjusted gross income (AGI) is less than $75,000.
• For married couples filing a joint return, the income limit doubles to $150,000.
• Single or head-of-household taxpayers who earn between $75,000 and $95,000 are eligible to receive a partial first-time home buyer tax credit.
• Married couples who earn between $150,000 and $170,000 are eligible to receive a partial first-time home buyer tax credit.
• The credit is not available for single taxpayers whose AGI is greater than $95,000 and married couples with an AGI that exceeds $170,000.

Effective Dates for the Tax Credit

• First-time home buyers would receive a $7,500 tax credit for the purchase of any home on or after April 9, 2008 and before July 1, 2009. To qualify, you must actually close on the sale of the home during this period.

Tax Credit is Refundable

• A refundable credit means that if you pay less than $7,500 in federal income taxes, then the government will write you a check for the difference.
• For example, if you owe $5,000 in federal income taxes, you would pay nothing to the IRS and receive a $2,500 payment from the government.
• If you are due to receive a $1,000 tax refund from the government, your refund would grow to $8,750 ($1,000 plus $7,500 from the home buyer tax credit).
• Buyers can take the tax credit in their 2008 or 2009 tax return.
• If you purchased the home in 2008, the tax credit is taken on your 2008 tax return. If you buy in 2009, you have the option of taking the credit on your 2008 or 2009 tax returns.

Types of Homes that Qualify for the Tax Credit

• All homes, whether single-family, townhomes or condominium apartments will qualify, provided that the home will be used as a principal residence and the buyer has not owned a home in the prior three years. This also includes newly-constructed homes.

Payback Provisions

• The tax credit essentially serves as an interest-free loan to be repaid over 15 years.
• For example, a home buyer claiming a $7,500 credit would repay the credit at $500 per year. If the home owner sold the home, then the remaining credit would be due from the profit of the home sale.
• If there was insufficient profit, then the remaining credit payback would be forgiven.

For more details on the tax credit, go to www.federalhousingtaxcredit.com

 

I have traffic to my site… now what?

We do everything we can to get traffic to our website (email campaigns, advertising, mailers, etc) and sometimes expect buyers to call and email once they find information they like, but that is not how most people use the internet.

 

Imagine a storefront allowing everyone to view your products while your sales person just sits idly behind the register and waits for people to come up once they are ready to buy. This is exactly what a lot of real-estate companies and developers are doing on the internet.  A potential buyer’s natural tendency is to shop and compare your product on other sites. You must be able to grab him or her and instantly create that physical communication needed to say “Hey, come visit our property and when can I schedule you to come in?”

 

So, how do I approach these potential buyers when they are on my site?  Well, we can’t physically approach them, at least not right away.  We need a “call to action” that will entice the buyer to supply us with enough details for a follow up via phone or email.  

 

Less is more.  Sometimes we want the internet and technology to do all the work for us.  Your potential buyer or internet user,is subconsciously thinking “how long   will it take me to fill out this form and what will I get in return.”  That’s just plain human nature.  If you just ask for an email address or phone number, he or she will probably fill it out. 

 

Lesson #1 – Make it easy.  Your chances of getting a return are much better.

 

Last, but not least. Once a potential buyer finally takes the time to fill out a form we sometimes still lose them.  Let’s use the storefront analogy.  A buyer is asking for assistance…If you are a good salesperson you will be over there right away.  Don’t let the person leave the store…or wait an hour to call this person back.  This is someone that is interested and wants more information  It is impressive when I fill out a form and get a call from the company while I am still looking at the website.   The sales person can now interact with that potential buyer and navigate them through the site and do what they do best… SELL.

 

And that’s really what it’s all about.

 

Recap:

1. Call to action
2. Keep it simple but be sure to capture their names.
3. Follow up (right away)