With today’s real estate market experiencing ebbs and flows on an almost monthly basis, sellers often ask me about the profile of a typical buyer. Usually, they’re seeking information that will help them prepare their home for sale and a guide for how long it might take to strike a deal.
In our neighborhood, there’s a lot of pent-up demand among buyers. In truth, there’s no shortage of folks wanting to buy a home. They see how property can help build their personal wealth, and they either want to break into the market or upgrade.
Their goal is to strike a win-win deal with the seller. They want to pay a fair price but fear over-paying. Why would this be?
There are two basic reasons. Firstly, it relates to the cost of a mortgage. While the Federal Reserve cut the cash rate guidance by 0.5% recently, it usually requires a full 1% reduction to change buyer sentiment. And secondly, sellers have been reluctant to enter the market due to high interest deals, and that’s reduced supply.
The bottom line is that a shortage of supply and pent-up buyer demand has pushed up values.
So what’s the average buyer thinking right now? A 600-respondent survey on Zillow provides some insights for sellers. Here’s a quick breakdown:
Today’s homebuyers are prepared to search for an average eight months before finding a home. Most have budgets around $500,000, which is slightly more than the median price for an American home.
Today’s buyers love practical features like washer/dryer hookups and dedicated parking. They value outdoor space, natural light, and walkable neighborhoods. However, they’re quick to dismiss properties needing major repairs.
Marathon, not a sprint
If you’re selling to first homebuyers, be aware that it’s probably taken them five years to save for a deposit. Many still only have a downpayment of less than 10% of a property’s value, so they’re going to be paying mortgage insurance.
If you’re an upgrader, you’ll face a similar journey in terms of finding a suitable property, according to the Zillow research. Today, our homeownership journeys require patience and realistic expectations.
Finding the perfect home is a marathon, not a sprint, so be prepared for a potentially lengthy search and be open to compromising on certain features.
Before diving in, get pre-approved for a mortgage to understand your budget and factor in all costs associated with buying a home.
Partnering with a knowledgeable real estate agent can be invaluable, as they’ll provide guidance on local market conditions, how to maximize the value of your home and navigate the buying process as you seek your next dream home. And I will be happy to assist you with your property requirements.