Home Buyers what are they thinking? What every Seller Should Know! Lyn Sims (847)230-7324 RE/MAX Suburban

First Time Home Buyers– what are they thinking?  

As I go thru my email today thefamiliar Lowe’s real estate newsletter comes intoview.  “SurveyReveals Possible Disconnect in First-Time Home Buying Process”.  Hmm … really?   I’m curious asto what buyers are always thinking and read on as to what the surveyproduced.  I’d thought I would pass it along to youwith my comments about the market conditions.  It’sactually quite enlightening!

“First-timehome buyers are primarily concerned with affordability when choosing anew home, but their expectationsmay be too high relative to their current financialbuying power, according to a recent Coldwell Banker® surveyconducted among its brokers.”

“Whilenearly half of the Coldwell Banker broker respondents reported thataffordability was the No. 1 concern for this group, 81% said today’sfirst-time home buyers consider move-in conditions to bevery important when searching for homes.   In contrast, only 7% are lookingto purchase “fixer-upper” homes that they could buyat a lower price and renovate themselves.”

“Inthe past, first-time home buyers were willing to purchase older, morebasic houses in an effort to savemoney and break into homeownership,” said JimGillespie, president and chief executive officer, Coldwell Banker RealEstate, LLC. “Today, this group has greater home expectationsbecause they have grownup more accustomed to their parents’ lifestyles.It is important for first-time home buyers to remember that byconsidering a ‘fixer-upper’ for their first homepurchase, they can build equity over time and move up and into theirsecond-stage home that better reflects their expectations.”

This is whattoday's sellers are not paying attention to!  I really think that CB did a great job with this surveyfrom their brokers on buyer expectations and it serves to reinforce myown thinking over the last few years.  Buyers are expecting awhole lot more than they can afford.  The home in their“minds eye” is that of a 4BR Colonial with the halfacre and the 3 car garage.  Problem is, they just started outin the work force so the pay does not equal what they expect topurchase.  Unpleasant realization sets in when they have tocompromise their desires.

I’ve noticedthat the majority of buyers just don’t want to doANYwork.  ANY being really none, zero.  Nowallpaperremoval, no painting, for heavens sake no kitchen remodel! I’ve also noticed that buyers arebecoming “overwhelmed” with the process remodelingentails even in their heads.  So a warning to all sellersreading this – your agent is not making this stuffup!  Buyers do not want to remodel your house!  Theydon’t want to change the 80’s wallpaper that youdon’t even like any more!  

Another point is that Ican’t find any buyers that want to buy a fixer upper and worktheir way into equity.  I just realized it but Ihaven’t had a buyer say that to me in quitesometime.  So I guess forget about that concept!

"Survey findings alsosuggest that first-time home buyers worry more about credit ratings andapproval than they did a decade ago, but less about down payments. Thismay be because they have saved money themselves, or have receivedadditional support from parents to help their first-time home purchase."

"According to 29% ofbrokers surveyed, first-time home buyers were more concerned with downpayments 10 years ago than anything else, while only 17% said this isthe biggest concern in today’s market."

I’llhave to agree here, but I think the mortgage debacle/disaster/crisisthat we just wentthru in the media has buyers questioning if they even can afford ahome.  Rumors have already taken hold or I believe the buyerswould be out there scooping up some of these great deals I come acrossevery day.  Buyers are now a little more sophisticated andknow that as long as their credit is good, there will probably be alender out there to help them. 

"Meanwhile,survey respondents said that only 4% of first-time home buyers wereworried about their credit scores in 1998, while 14% said it is more ofa concern today.   “Owning a home is agreat investment that will provide tax breaks, financial gains - aswell as considerable joy over the years,” Gillespiesaid.  “First-timehome buyers now have higher standards, placing anincreased focus on the financial aspects of home ownership and at thesame time, want a larger home they can live in right away.”

Additionalkey findings from the survey include:
- 71% of brokers notedthat first-time home buyers are looking for larger homes than they were10 years ago.
- According to 41% ofthe respondents, proximityto job is the No. 1 attribute first-time home buyers arelooking for in a home.
- 35% of the surveyrespondents said “investment” is the No. 1 reasonfirst-time home buyers are making their purchase.
- 46% of the surveyrespondents reported that first-time home buyers look at five to ten homes,on average, before making a purchase.

Inaddition, the survey explored initial reasons that a first-time homebuyer contacts a Realtor in today’s market andhow that has shifted from 10 years ago, according to the ColdwellBanker brokers:
- They are ready butwant assistance in the process, including identifying neighborhoods,negotiating of price and paperwork:  Today’s market 73% vs. 32% 10 years ago
- Because that is whatthey feel like they are supposed to do:  Today’smarket 3% vs. 28% 10 years ago.
- To view houses / dowalk-thrus:  Today’s market 17% vs. 30% 10 years ago.
- To help withnavigating mortgage issues:  Today’s market 1% vs.4% 10 years ago
- They are not ready buttrying to better understand the process:  Today’smarket 6% vs. 6% 10 years ago.



This is all fabulous information for us all to know, both buyers andsellers.  Sellers need to come around to the market conditionsand understand that buyers do not want to pay top price for their houseand then turn around and have to remodel it.  In fact, themarket suggests that no real work need be done by the buyers. So a tip for sellers would be to do the work for the buyers for afaster sale.  Price it right and show the buyer 'your' valueover the others (less work involved).

Thanksfor stopping by and reading my perspective and comments on this buyersurvey!  Use this knowledge to your advantage.


Lyn Sims at RE/MAX Suburban(847)230-7324




RISMEDIA 8/26/08  Lowe's ENewsletter dated 8/26/08 Methodology: Coldwell Banker Real Estate LLC conducted anonline survey about the trends real estate professionals are seeingwith first-time home buyers. The survey yielded responses from 150Coldwell Banker brokers across the United States.