How Well Do You Know Today’s Home Seller?
Action Items for Your Business Based on 2011 Seller Profile
Each year, NAR publishes results from its comprehensive survey of home buyers and sellers across the country. The report provides a compelling picture of real estate clients today. It also delivers interesting insights into how responses have changed over time. Let’s take a look at the data on sellers and consider how it might change the way you currently do business.
Note: In the February issue, we looked at buyers. Check it out.
Demographics
Seller demographics shifted this year in much the same way buyer demographics did. The average seller is older, has a higher household income and is more likely to be married.
Median Age: 53
2010: 49
2009: 46
Household Income
2010: $101,500
2009: $90,000
Married Couples: 77%
Highest since report began
Action Item: Whether you are a younger agent looking to increase your reach to older clients or an older agent seeking to work with younger clients, it is important to understand what the different generations of buyers expect from you. Attend a class on the topic (such as the Generation Buy class in Flagstaff this month; see sidebar) or educate yourself with books or blog posts on the topic.
EXPERIENCE
There were slightly more first-time sellers in 2011 than the year before.
First-Time Seller: 66%
2010: 62%
Action Item: If you know you are presenting to a first-time seller, tailor your listing presentation accordingly. You might, for instance, bring copies of the contract and other documents that they can review before any offers come in.
TENURE IN HOME
The amount of time sellers have lived in the home they are selling has jumped considerably.
Years in Home: 9
2007: 6
Action Item: Have you targeted marketing to those most likely to have equity in their home? Consider focusing on a subdivision in which most folks bought in the last seven to nine years. There may be pent-up demand that you can capitalize on as the market shifts.
Characteristics of Next Homes Purchased
DISTANCE FROM CURRENT HOME
- The median distance between the home sold and new home purchased is 20 miles.
- 38% move to a home within 10 miles.
- Older sellers are more likely to move a greater distance (43 miles for those 65-74).
- Yet, 52% of sellers did NOT use the same agent for their home purchase.
Action Item: Don’t be so focused on securing the listing during your presentation that you fail to talk with the sellers about their next step. If they are staying in the area, explain how your skills in buyer representation can benefit them. If they are moving out of state, encourage them to use you for a referral to a qualified agent.
HOME SIZE
46% purchased a larger home.
most common among buyers 54 and younger
31% purchased a home about the same size.
most common among buyers 55 – 64
23% purchased a smaller home.
most common among buyers over 65
Action Item: Understand the motivation behind your clients’ decisions. Don’t miss the opportunity to speak with both sellers and potential buyers about their goals. It will help you position your listings in an appropriate light.
AGE OF HOME
60% purchased a newer home.
20% purchased about the same age.
20% purchased an older home.
COST OF HOME
51% purchased a more expensive home.
26% purchased a less expensive home.
24% purchased in the same price range.
Action Item: Evaluate how market factors may influence a potential seller’s decision to get off the fence. With historically low home prices and low interest rates, folks can trade up even while purchasing a home in the same price range.
Reasons for Sale
With prices low, more people are selling because they have to–due to factors such as a job relocation or a growing family. Job relocation in particular has jumped significantly.
PRIMARY REASON
Job relocation: 17%
2006: 9%
Home is too small: 17%
2010: 21%
Action Item: During your listing presentation, talk to your potential client about the motives behind their home sale. Be prepared to address considerations that “have-to-sell” sellers will have, such as what will happen if they move before the home sells and must make decisions from a distance. Clients who have outgrown their home may need more than the usual amount of guidance on de-cluttering and staging it to sell.
Generational differences also influence the reason why people sell.
- Sellers 18-44 are most likely to move because their home is too small.
- Sellers 45-54 are most likely to move for job relocation or because the neighborhood has become less desirable.
- Sellers 55+ are most likely to move to be closer to friends and family.
Action Item: As you develop a marketing plan for a new listing, consider who your likely buyers might be and find methods to reach that audience. But remember your responsibilities under Fair Housing laws! Also, if you have many clients with aging parents, you might position yourself as a resource for them as they consider options for bringing mom or dad closer.
Sales Process
In 2011, the sales price was a median 95% of listing price (96% in the West). The median time on market was 9 weeks (8 weeks in the West).
Action Item: Are you beating the national or regional average time on market or percent of listing price? What about local trends in a specific neighborhood or subdivision? If you are beating the averages, be sure to mention it in your listing presentation.
INCENTIVES
The top two incentives offered are home warranty policies (23%) and assistance with closing costs (20%).
Action Item: If you have a challenging listing, talk with the seller about incentives–both the common ones mentioned above and less common ones that may drive additional attention to the home.
SATISFACTION
54% were very satisfied with the process.
31% were somewhat satisfied.
15% were somewhat or very dissatisfied.
69% of sellers say they would use their agent again or recommend the agent to others.
Action Item: Do you survey your clients at the end of a transaction? With their permission, you could include positive comments on your website, and high overall satisfaction rates might be an effective point to include in future listing presentations. Even negative feedback is useful, helping you improve your game. In fact, if responded to promptly and attentively, you could convert an unhappy client into a future referral source.
What Sellers Want
When choosing a listing agent, the most important factors are:
- Reputation of agent: 38%
- Agent is honest and trustworthy: 20%
- Agent is friend or family member: 18%
- Agent’s knowledge of neighborhood: 11%
Sellers say that these are the top four ways they want their agents to help them:
- Market home to potential clients: 24%
- Price home competitively: 20%
- Sell home within a specific timeframe: 19%
- Find a buyer: 19%
Action Item: 66% of sellers only contacted one agent, so you want to be first on their list. Review your listing presentation, website and other marketing materials. Do you specifically address these topic areas? Do you have a page on your website that targets sellers and the services you offer them? Could you provide examples of how you meet these goals in outreach to your sphere, posts on your blog and the like?
HOW THEY FIND YOU
These are by far the most common ways sellers find an agent:
- 39% got a referral from a friend, neighbor or family member.
- 22% worked with an agent they’d used before.
For comparison purposes, just 4% found their listing agent at an open house and 3% found their agent on a website.
Action Item: Do you measure return on investment for your prospecting activities? Make sure you allocate resources of time and money to the arenas most likely to yield clients. When you do outreach to past clients, you have an opportunity to remind them not only that you are in real estate but that you’ve continued to grow as an agent. If you’ve developed into an expert on short sales, for example, do your clients from four years ago know that?
Conclusion
Much of the data detailed above may simply confirm what you already know about your clients. But the final action item is this: Don’t just know these facts. Put them to use to your advantage when you are interacting with potential buyers and sellers and with your sphere.
What conclusions do you draw from the data in the home seller profile? Share them in the comments section below.
GENERATION BUY
Friday, March 23 | 8:30am – 5:00pm
Northern Arizona Association of REALTORS®
$79 (includes lunch) | Register Online | Class Flyer
Assessing the distinct wants and needs of different generations can help you nurture real estate client relationships for a lifetime. At any given time, you may be working with four generations of real estate buyers: Millennials, Generation X, Baby Boomers and Matures. In this one-day course, students will examine the characteristics of these home-buying generations and evaluate their expectations and communication preferences. Watch the video.
C/E: 3-Fair Housing, 3-agency
Instructor: Paula Monthofer, ABR, GRI
UPCOMING SELLER REPRESENTATIVE SPECIALIST (SRS) COURSES AROUND THE STATE
$179 (includes lunch) |Register Online | Class Flyer
C/E: 3-contract, 3-agency, 6-general
The SRS course is a two-day intensive program that reinvents the way you represent sellers in today’s challenging market. This course provides you with a refreshing perspective of back to basics, “nose to nose, toes to toes” consumer contact combined with today’s technology. With comprehensive education on how to deal with Baby Boomers to Gen Ys, you will gain a competitive edge to earn more while reducing risk in a market where clients rely on you more than ever for guidance through transactions.
- Wednesday, April 4 – Thursday, April 5 | 8:30am – 5:00pm
West Maricopa County Regional Association of REALTORS® | Instructor: Frank Dickens - Tuesday, April 24 – Wednesday, April 25 | 8:30am – 5:00pm
Northern Arizona Association of REALTORS® | Instructor: Frank Dickens - Wednesday, May 30 – Thursday, May 31 | 8:30am – 5:00pm
Tucson Association of REALTORS® | Instructor: Frank Dickens - Monday, August 13 – Tuesday, August 14 | 8:00am – 5:00pm
Kingman/Golden Valley Association of REALTORS® | Instructor: Holly Mabery