PARAMOUNT MORTGAGE - LENDER'S BLOG

The National Association of Realtors’ research staff recently released its comprehensive annual report: Profile of Home Buyers and Sellers for 2011.

Market researcher, Paul C. Bishop, Ph. D., Vice President and Jessica Lautz, Manager of Consumer Survey Research state that they’ve identified “trends that have not been seen in the last 10 years,” which will affect the housing market as we enter 2012.

“Buyers now are facing tighter credit standards” and the successful home buyer will typically have “the very best credit” or buyers quite often will purchase “without financing,” states the authors. “This change is one that is so substantial, it is changing who purchases homes, who sells homes, and how the home is financed.”

Getting your potential buyers preapproved with a mortgage banker early in the home buying process may be the critical first step to ensure a successful sale in 2012.

Thirty nine percent of buyers “reported the mortgage application and approval process” was “more difficult than expected,” which underscores the need to obtain competent financial expertise to help buyers navigate through the entire mortgage process.

Younger buyers and first-time buyers are leaving the market. The report states “37% of home buyers were first-time buyers, a drop from 50% in 2010.” Your typical buyer is now “45 years old, a jump from 39 years old in 2010.”

To attract buyers, “41% of sellers offered incentives” such as home warranty policies or financial assistance with closing costs. The typical home sold at “95% of the listing price, and 61% reported they reduced the asking price at least once.”

Single women are also leaving the home buying market dropping to “the lowest market share since 2004” at 18%, while married couples purchasing homes have increased to 64%, “the highest share since 2001.”

The real estate agent’s and broker’s job is secure however, as 89% of all buyers purchased their homes with these professionals, a steady increase from 69% in 2001.

Agents and brokers shouldn’t stop advertising and promoting themselves. Referrals from families or friends account for just 41% of an agent’s customer base. Once a buyer selects you as their agent, you’ll have a loyal client because “nearly nine in ten buyers would use their agent again or recommend to others.”

The report says the “financial aspects of homeownership are important, but they do not stand alone as the primary motivators for the purchase of a home.”

Agents who specialize in stable, quality neighborhoods will do better in 2012. Buyers consider the “top three factors” that influence their home purchase are “quality of the neighborhood, convenience to job, and overall affordability.”