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California Association of Realtors

Industry Insights

The Mindset of Buyers

December 14, 2012

As REALTORS®, you work with home buyers every day – and you know each one is different. However, sometimes it’s nice to know overall trends of what buyers are thinking … and that’s where the California Association of Realtors (C.A.R.) Buyers Survey comes in. C.A.R. just released their “2012 Survey of California Home Buyers,” which found increased confidence and optimism in buyers. Check out some other notes below:

  • Buyers expect prices to rise. 25% expect home prices to rise in one year, 41% in the next 5 years, and 73% expect them to rise in the next 10 years (compared to 8%, 25% and 60%, respectively, in 2009.
  • Deductions are extremely important. Across all age groups (Gen Y, Gen X, and Baby-Boomers) and income levels (under 100k, 100-200k, and 200k+) no less than 76% said deductions were extremely important in their buying decisions (most were over 80%).
  • Among other reasons cited for purchase a home: decreased prices (85%), better location (12%), and favorable prices/financing (11%)
  • Financing is a huge difficulty and concern. On a scale of one to 10, with 10 being extremely difficult, buyers rated their difficulty with obtaining financing an 8.5. That is up from 8.0 just a year ago.
  • High down payments are standard in this market. Buyers on average put 25% down on their home purchase. The down payment average has been above the old “norm” of 20% since 2009.
  • Buyers want certainty. 93% of buyers obtained a fixed-rate loan (up from 84% in 2011).

It’s important to know this survey is California-wide. Each market place is different, but this provides a nice overview of buyer feelings in the state (and many of these trends are echoed in the Bay Area). For more information visit the C.A.R. website.

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Early Bird Gets the Lead

October 12, 2012

The evidence is in – when it comes to internet leads – the early birds gets the worm.
Often salespeople argue that if you’re a strong salesperson, even if you call a lead late, you’ll have a higher chance of closing a lead than someone who contacts them earlier – but so far, the evidence suggests otherwise. Internet consumers not only want, but expect almost immediate responses to their inquiries – and any response over 15 minutes greatly reduces the chance of closing that lead.
Let’s look at the internet consumer:

  • Internet consumers often submit 3-5 lead forms, creating multiple “leads” for multiple agents
  • In a 2011 California Association of Realtors survey of buyers, when asked why they chose their agent, responsiveness played a major role in two of the top five factors named:

What Determines How Buyers Chose Their Agent:
1. Most responsive (28%)
2. Worked with agent before (18%)
3. First to respond (17%)
4. Most agressive (16%)
5. Most knowledgeable (6%)

  •  Additionally, the CAR survey showed that 36% of buyers expected an instant response from agents on internet requests – and 96% expected a response within 4 hours
  • According to MIT*, the odds of contacting a lead more than 5 minutes versus 30 minutes drops 100 times. From 5 to 10 minutes the odds decrease by 5 times.
  • The first to contact a lead increases conversion 238%, speed of response is THE best predictor of a closed transaction
The statistics are clear – the modern internet consumer moves fast – and expects you do too. When they choose to submit any sort of lead from they want information right then. If you aren’t providing it for them, not only are those leads quickly dying, but they’re likely to be picked up by another agent. In that same CAR survey, 86% of leads felt that response time was “extremely important” when deciding their real estate agent.

While perhaps it’s true that not too long ago, a better salesperson could close a lead more frequently even if contacting a lead later – in this rapidly changing industry – that is not what consumers want. An easy way to increase your business and start closing more leads today is to decrease the waiting time before responding to leads. Every agent should make it their goal to respond to any lead within 15 minutes.
Photo Credit: Corn Exchange Clock Bristol (Rick Crowley) / CC BY-SA 2.0
* Research Study by James  Oldroyd, PHD, MIT, October 16, 2007