What compromises are homebuyers willing to make?
All homebuyers make some sort of compromise, but according to NAR’s 2015 Profile of Home Buyers and Sellers, what they ultimately concede differs considerably based location and economic means.
Here are the main findings from NAR’s report that you should be aware of when dealing with clients in the New Year:
1. Your Buyer Will Likely Compromise – Of all the thousands of homebuyers that NAR surveyed, only 35 percent stated that they made no compromises in their home purchase, and that number was heavily weighted among older, more affluent consumers. While only 29 percent of first-time buyers made no compromises, that share jumped to 39 percent for repeat buyers and 43 percent for buyers of new construction.
2. Geographical Differences – The main compromise among all homebuyers was on the price of the home, which was cited by 20 percent of buyers. There were differences, though, when NAR broke buyers down by the area they purchased their home. Suburban homebuyers, for instance, were less likely to compromise on the condition of their home, while small town buyers were more likely to compromise on their home’s size. Urban buyers, meanwhile, were more likely to compromise not only on the home’s price, but also its condition, size, and style, along with the quality of the neighborhood; lot size and the home’s distance from work were less consistent concessions.
3. New? Used? – As previously stated, buyers of new homes were the least likely to compromise, with 43 percent making no concessions whatsoever. That said, 20 percent still compromised on their home’s price, while 19 percent compromised on lot size and 14 percent on the home’s distance from work; remarkably, only 3 percent compromised on the home’s condition, compared to 22 percent for existing-home buyers.
4. Quality and Distance for First Timers – In nearly all categories, first-time homebuyers were more likely to make concessions than the average. For instance, they were 33 percent more likely to concede on a neighborhood’s quality and their home’s distance from family and friends. They were 38 percent more likely to concede on a home’s distance from work. And though the differences weren’t as dramatic, they were also more likely to make concessions on price, style and lot/home size.
5. Single and Uncompromising – Perhaps the most interesting statistic in NAR’s survey came in the adult composition breakdown, which found that 41 percent of single male and female homebuyers made no concessions in their purchase, the most of any demographic; for comparison’s sake, only 27 percent of unmarried couples made no compromises. Between single males and females, the differences were fascinating: single males were more likely to compromise on a home’s condition, as well as the lot size, the distance from work, the distance from family/friends and the quality of the neighborhood; single females, meanwhile, were more likely to compromise on the home’s price and style.
For more perspective on what homebuyers will compromise on, see our infographic below: