| FOR
IMMEDIATE RELEASE
Home Buyer & Seller Survey Shows Rising
Use of Internet, Reliance on Agents
January 31, 2006 - Technology is transforming how
Americans buy and sell homes in unexpected ways, including how they
work with real estate agents and brokers, according to one of the largest
surveys of real estate consumers ever conducted. The study was released
today by the National Association of Realtors®.
Nine out of 10 home buyers use a real estate agent in the search process,
but use of the Internet to search for a home has risen dramatically
over time, increasing from only 2 percent of buyers in 1995 to 77 percent
in 2005; it was 74 percent in 2004. The next largest source of information
for buyers is a yard sign, mentioned by 71 percent of buyers.
When asked where they first learned about the home purchased, 24 percent
of buyers identified the Internet, up strongly from 15 percent in 2004
and only 2 percent in 1997. Although most buyers use an agent to complete
the transaction, 36 first learn about the home they buy from a real
estate agent and 15 percent from yard signs; five other categories
were 7 percent or less.
The 2005 National Association of Realtors® Profile of Home Buyers
and Sellers, based on more than 7,800 responses to a questionnaire
mailed to a large national sample of consumers located through county
deed records, is the latest in a series of surveys evaluating demographics,
marketing and other characteristics of home buyers and sellers.
The survey shows 81 percent of buyers who use the Internet to search
for a home purchase through a real estate agent, while 63 percent of
non-Internet users buy through an agent; non-Internet users are more
likely to purchase directly from a builder or an owner they knew in
advance of the transaction.
A clear downtrend in FSBOs has been seen since that market share experienced
a cyclical peak of 18 percent in 1997. Only 13 percent of sellers conducted
transactions without the assistance of a real estate professional in
2005, and 39 percent of those FSBO transactions were “closely
held” between parties who knew each other in advance, up from
32 percent in 2004. The FSBO market share was at 14 percent in both
2003 and 2004. NAR began tracking the FSBO market in 1981; the record
was 20 percent in 1987.
The median home price for sellers who use an agent is 16.0 percent
higher than a home sold directly by an owner; $230,000 vs. $198,200;
there were no significant differences between the types of homes sold.
Realtor.com was the most popular Internet resource, used by 54 percent
of buyers, followed by multiple listing service (MLS) Web sites, 50
percent, real estate company sites, 38 percent, real estate agent Web
sites, 31 percent, and local newspaper sites, 15 percent; other categories
were smaller.
Married couples make up the largest share of the housing market, accounting
for 61 percent of transactions. Single women purchase 21 percent of
homes while single men account for 9 percent. Unmarried couples were
7 percent of the market, and 2 percent were listed as other. In 2004,
single women were 18 percent of buyers and single men were 8 percent.
In finding a real estate professional, 44 percent of buyers were referred
by a friend, neighbor or relative, 11 percent used an agent from a
previous transaction, 7 percent found an agent on the Internet, 7 percent
met at an open house and 6 percent saw contact information on a “for
sale” sign. Six other categories accounted for smaller shares
each.
The most important factor in choosing an agent was reputation, according
to 41 percent of home buyers, followed by an agent’s knowledge
of the neighborhood, 24 percent. In terms of desired qualities in an
agent, three categories were rated as very important by more than nine
out of 10 buyers: knowledge of the purchase process, responsiveness
and knowledge of the market. Of buyers who use an agent, 63 percent
choose a buyer representative. Satisfaction with real estate agents
is very high, with 85 percent of buyers saying they were likely to
use the agent again.
Seller responses are comparable: 43 percent chose agents based on
a referral by a friend, neighbor or relative, and 28 percent used their
agent previously; 10 other categories were 5 percent or less. Fifty-seven
percent of sellers said reputation was the most important factor in
selecting an agent, followed by their knowledge of the neighborhood,
17 percent. Eighty-two percent said they were likely to use the same
agent again or recommend to others.
Four out of ten respondents are first-time buyers, a finding that
is consistent for more than a decade. The median age of entry-level
buyers is 32 years, also typical over time, and the household income
was $57,200. They made a downpayment of 2 percent on a home costing
$150,000, but 43 percent purchased with no money down. Of first-time
buyers who made a downpayment, 23 percent received a gift from a friend
or relative.
The typical repeat buyer is 46 years old and had a household income
of $83,200. They placed a downpayment of 21 percent on a home costing
$235,000, but 11 percent of repeat buyers paid cash for their home.
In all, 94 percent of buyers and sellers believe their home purchase
is a good financial investment.
The most important factors in choosing a location to purchase a home
are neighborhood quality, cited by 68 percent, close to a job or school,
43 percent, close to family or friends, 36 percent, and the school
district itself, 23 percent; seven other categories were under 20 percent.
NAR mailed an eight-page questionnaire to a national sample of 145,000
home buyers and sellers, based on county records, who purchased their
homes between August 2004 and July 2005. It generated 7,813 usable
responses; the response rate was 5.4 percent.
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Press Release Contact:
Tricia Chirco
Marketing & Communication Director
631-661-4800 Ext. 345
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