Residz Team 3 min read
It’s been an anxious time for home buyers and now sellers during the pandemic. A recent U.S. survey of home buyers and sellers has found more than a quarter (27%) of buyers felt anxiety over bidding wars in the past 12 months. Similar bidding wars led to severely unaffordable house prices and much anxiety in Australia too in 2021, so let’s check out other familiar-sounding findings of the HomeLight survey.
Competing against cash buyers was a challenge for 23% of home buyers in the survey, and indeed nearly one third of buyers (31%) used a cash offer rather than bank finance to get their home. A cash offer is an all-cash bid, ie. one that is without a mortgage loan. Sellers like cash offers as they reduce the risk of a buyer’s finance falling through, and can mean a faster sale.
As well as cash offers, buyers used other, creative tactics to compete for homes during the property boom.
These included:
Curiously, 9% of sellers (and a third of sellers in Los Angeles) reported they’d accepted gifts of holidays, wine, or restaurant dinners offered by keen buyers.
Now the tables have turned and buyers FOMO has switched to sellers FOMO as it becomes a buyers’ market, canny sellers can tweak these ideas to help sell their property. For example, they could:
Despite the market cooling, many of the challenges for buyers over the past 12 months are still present for Australian buyers in 2022. The survey respondents listed their top challenges in order of significance as:
Deciding what to compromise on when buying a home is a dilemma faced by many purchasers. In the hotly competitive market of the past 12 months, buyers surveyed by HomeLight showed they compromised mostly on price and the age or size of their house.
48% of buyers paid more for their home than they initially expected
31% of buyers bought an older home than expected to
24% bought a smaller home they’d expected to
23% bought a home in worse condition compared with their expectations at the start of their search.
Other compromises included a smaller backyard, fewer bathrooms, worse location, fewer bedrooms, and a lower quality school catchment area.
You don’t have to have bought a home yet to experience the property blues. Nevertheless, plenty of buyers have their share of real estate regrets. 70% of the survey respondents who were buyers said they felt remorse after their purchase. Around a quarter (22%) felt they paid too much, and around 20% underestimated the amount of maintenance or the total cost of owning a home.
One of the most interesting aspects of the survey was that 50% of sellers sold their homes after owning it for only five years or less. Trading up and rising home prices were the two top (and fairly obvious) reasons sellers chose to list their home in the past 12 months. Most sellers (36%) listed their home 4-5 months after making the decision to sell. Another third (33%) put their home up for sale within 12 weeks of deciding to sell. Only 16% knew a year in advance that they would sell.
With half the sellers expecting more than 4 offers for their home (in what was a record sellers’ market), sellers had the confidence to buy their next property before they listed their own home for sale. The survey found 36% had already bought their next home, and 33% were in the process of finding and purchasing another home, when they sold. Only one in 10 sellers sold without knowing where they’d live next.
Image: Keys by Martinak15 http://www.magnoliaeyes.blogspot.com