In the MNAR eResource newsletter today, Christopher Galler, CEO of Minnesota Association of REALTORS, reviewed highlights from the 2012 Profile of Home Buyers and Sellers. Here are some items he mentioned.
Home Sellers and Their Selling Experience
- The typical national seller lived in their home for 9 years. The median tenure has increased in recent years. In 2007, the typical tenure in home was only 6 years. In Minnesota, the median tenure is 10 years.
- 88% of sellers were assisted by a real estate agent when selling their home nationally, and 90% were assisted in Minnesota.
- Nationally, recent sellers typically sold their homes for 95% of the listing price, and 60% reported they reduced the asking price at least once. In Minnesota, recent sellers sold their homes for 94% of the listing price and 57% reduced the asking price at least once.
- 40% of sellers offered incentives to attract buyers nationally, most often assistance with home warranty policies and closing costs. In Minnesota, 40% of sellers offered incentives as well.
For-Sale-by-Owner (FSBO) Sellers
- The share of home sellers who sold their home without the assistance of a real estate agent was 9% nationally. 33% of those sellers knew the buyer prior to home purchase. In Minnesota, the share was 8% and 63% knew the buyer.
- One-third of FSBO sellers nationally took no action to market their home, and 60% did not offer any incentives to attract buyers. These numbers are similar to Minnesota, where 55 % of FSBO sellers took no action to market the home and 60% did not offer any incentives.
Financing the Home Purchase
- On a national level, 87% of home buyers financed their recent home purchase. Among those who financed their home purchase, the buyers typically financed 91%. In Minnesota, 90% of buyers financed their recent purchase and 91% of the purchase was financed.
- The share of first-time buyers who financed their home purchase was 95% compared to 81% of repeat buyers, nationally. In Minnesota, that share was 95% of first-time buyers and 86 % of repeat buyers.
- More than a third of home buyers nationally reported they have made some sacrifices such as reducing spending on luxury items, entertainment or clothing. This also holds true in Minnesota.
- Nationally, 23% of buyers reported the mortgage application and approval process was somewhat more difficult than expected and 17% reported it was much more difficult than expected. These numbers are roughly equivalent to the Minnesota numbers, where 27% of buyers reported the process was somewhat more difficult than expected and 10% reported it was much more difficult than expected.
"Home buying and selling remains an important segment of the national and local economies, especially due to the housing sector’s unique power to revitalize the economy during challenging times. With historically low mortgage rates, buyers and sellers continue to have opportunities to trade up, trade down, relocate or purchase a second home. In Minnesota, First-time buyers are now 41% of the market, are discovering and capturing the benefits of homeownership, which contributes to significant wealth accumulation, among other financial, social, and personal rewards.
Consumers rely on the experience and expertise of real estate professionals to assist when buying and selling a home. Working in an extremely competitive environment, agents and brokers provide high levels of service to meet the varied needs of home buyers and sellers. The value that consumers place on the services offered by real estate professionals is reflected in the large majority of both buyers and sellers who would use their agents again or recommend them to others." - Christopher Galler
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