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Everything You Always Wanted to Know About Home Buyers and Sellers
(But Didn't Know Who to Ask)

by Nansi Hall, HouseValues, Inc.

Understanding today's real estate consumers

No matter how many years you've worked in real estate, getting inside the minds of prospective home buyers and sellers often seems like an impossible task. To learn more about what motivates and influences today's consumers and then empower real estate agents with this knowledge, HouseValues commissioned an extensive consumer research study in March 2004. Some of the questions we wanted to answer included:

  • How long does it take consumers to decide to buy or sell?
  • When and why do consumers choose a real estate agent?
  • How can smart agents use this information to become more successful?

Much of what we learned may surprise you. More importantly, understanding how and when today's consumers buy and sell their homes will give you critical insight into how to increase your share of these transactions. First we'll present a quick summary of our findings, followed by some strategic suggestions on how to use this new information to your advantage.

The five year, four phase cycle - sellers

A key goal of our research was to identify the average length and distinct phases of the home buying and home selling process. Here's a summary of what we found:

Sellers
The home selling process can take up to five years and be divided into four distinct "phases"- only three of which are actually measurable. Lasting up to four years, the first phase was described by consumers in many different ways, including a vague awareness that selling their home could solve a problem, offer a financial advantage or provide a needed change. At some point during this first phase, a specific triggering event would occur that moved sellers into the next phase of the process.

In our research, the most common events mentioned included the desire/need for a larger house, wanting to live in a certain area, job relocation and family concerns. From this point, we were able to quantify the selling process at about one year (11.9 months to be exact). This part of the process includes three measurable phases:

 

The five year, four phase cycle - Buyers

Buyers

Research subjects on the buyer side also described a period of up to four years during which they were somewhat aware that they "should" buy a home for a wide variety of reasons. Like the sellers described above, the buyers we surveyed did not enter into the measurable part of the process until after a specific triggering event, including wanting or needing a larger home, wanting the financial advantages of buying instead of renting, family reasons and job relocation. Following the trigger event, our research determined that the home buying process takes an average of almost a year and a half (16.4 months), split into the following three measurable phases:

How consumers choose an agent

To start with, 76.39% of the home buyers and 79% of home sellers surveyed used a real estate agent during their last purchase or sale. Of those who did hire an agent, the majority of home buyers chose their agent based on the following criteria:

Home sellers selected their agent based on the same criteria as above with many of them adding that they had also worked with this agent in the past.

So how much time did these consumers spend interviewing and selecting an agent to work with?

This area of our research was a real eye-opener:

Finally, our research confirmed the following as the top reasons why a buyer or seller decided to retain a real estate agent:

To summarize, our extensive research study produced two extremely important insights about today's home buyers and sellers:

 

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