SEATTLE, May 10, 2021 /PRNewswire/ -- Buying a home
is a stressful and challenging time and, in a supercharged market
like today's, many buyers are getting burned out and may be
resorting to dangerous strategies after losing multiple offers.
Real estate agents throughout the past six months submitted nearly
four offers per client on average before one was accepted, with 13%
saying it took on average six or more1.
The good news is home shoppers are still finding homes to buy,
despite intense competition, with the help of their real estate
agents. A new survey of Zillow Premier Agent2
partners breaks down the strategies that are working in today's
market to score a home – and what buyers should be prepared
for.
Sweetening the offer
Agents are using a variety of
tactics to help their clients' offers stand out. At least half of
listing agents surveyed encountered an all cash offer, an
escalation clause, submission before the offer review date, a
higher down payment or more earnest money when reviewing
offers.
Out of these strategies, one of the most effective to win a deal
is an all-cash offer. About four in five agents (77%) sometimes
submitted all-cash offers on behalf of their clients, and 41% of
listing agents said an all-cash offer was the most effective
strategy in their recent transactions.
However, cash offers are not feasible for most buyers in the
market, and agents use an assortment of strategies to win offers.
About 21% of buyers' agents offered a higher down payment or more
earnest money to get their client's offer to stand out, and about
one-quarter always submitted before the review date. More
unconventional strategies that agents are using include offering
leaseback, throwing a pizza party, and sending flowers to the
sellers.
The role of real estate technology
With the market
moving so fast, the best and easiest way to get a speed advantage
is to get tech savvy. Agents say 31% of clients always or usually
tour a home virtually before visiting in person.
"Being able to tour a home virtually is a big timesaver for
buyers," says Josephine Sabatino,
broker manager at RE/MAX Edge in New York
City. "3D tours provide buyers a clear, detailed view of the
home and they can decide if it's right for them. This saves buyers
from going to see a bunch of homes that just don't work, and help
narrow down their choices early."
Technology like Zillow 3D Home tours is an easy and
cost-effective way to make a listing pop. In fact, according to
Zillow user data,3 for sale home listings
with a Zillow 3D Home tour got about 30% more views and saves than
similar for sale homes without. Half of listing agents thought that
3D tours, virtual showings, and other technology helped their most
recent transactions sell for more money.
Risky offer strategies
Waiving contingencies is
common in an ultra-competitive market, and can be frustrating to
home shoppers who lose bids to buyers using this strategy. In their
last three to five transactions, at least half of the listing
agents surveyed encountered waived inspections or financing.
However, waiving contingencies can pose a huge risk to buyers in
the short and long run.
- Waiving an inspection puts buyers at risk of unknown
structural, mechanical or safety defects which can be incredibly
costly to the buyer.
- If a buyer waives financing and their loan is not approved or
the home doesn't appraise at the offer price, it's the buyer's
responsibility to make up the difference in cash or walk away from
their earnest money deposit – both potentially costly
consequences.
- So-called "love letters," intended to tug on a seller's
heartstrings, can put buyers and agents at risk of fair housing
violations. These letters can include personal demographic
information about the buyer, unlawfully swaying a seller's
decision, which can violate the Fair Housing Act. This is also not
a successful strategy for buyers -- according to the agents
surveyed, love letters are the least important factor for sellers
in the current market.
Agents are the key to winning the deal
The residential
real estate market is not expected to slow down anytime soon, and
that is why it's imperative for buyers to find a knowledgeable and
trusted agent to guide them through the stressful and daunting
process of purchasing a home.
Sabatino's overall advice for today's buyers? "Buyers need to
remember the why and the priorities that have to come first. Don't
worry about the set up that is already in the house. Bring in a
friend with vision, and you could end up utilizing spaces for
things you never thought possible!"
Methodology
Data came from a survey of 376 Zillow
Premier Agents who are part of a research panel. Fielded
between March 26 and April 1, 2021,
the survey asked respondents about the strategies they used or
encountered in their last 3-5 transactions as sellers' and listing
agents. To make the sample more representative of the overall real
estate agent population in terms of age, sex, race/ethnicity, and
geographic region, Zillow Group Population Science used statistical
ranking to weight the sample to 2019 U.S. Census Bureau American
Community Survey benchmarks. However, additional differences
between the surveyed agents and agents overall may persist,
particularly with respect to transaction volume, local market, and
other relevant factors.
About Zillow Group:
Zillow Group, Inc. (NASDAQ: Z and
ZG) is reimagining real estate to make it easier to unlock life's
next chapter.
As the most-visited real estate website in the United States, Zillow® and its affiliates
offer customers an on-demand experience for selling, buying,
renting or financing with transparency and nearly seamless
end-to-end service. Zillow Offers® buys and sells homes directly in
dozens of markets across the country, allowing sellers control over
their timeline. Zillow Home Loans™, our affiliate lender, provides
our customers with an easy option to get pre-approved and secure
financing for their next home purchase. Zillow recently launched
Zillow Homes, Inc., a licensed brokerage entity, to streamline
Zillow Offers transactions.
Zillow Group's brands, affiliates and subsidiaries include
Zillow®, Zillow Offers®, Zillow Premier Agent®, Zillow Home Loans™,
Zillow Closing Services™, Zillow Homes, Inc., Trulia®, Out East®,
StreetEasy® and HotPads®. Zillow Home Loans, LLC is an Equal
Housing Lender, NMLS #10287 (www.nmlsconsumeraccess.org).
1 Data came from a survey of 376
Zillow Premier Agents who are part of a research panel. Fielded
between March 26 and April 1, 2021,
the survey asked respondents about the strategies they used or
encountered in their last 3-5 transactions as sellers' and listing
agents.
2 Zillow Premier Agent is an advertising
program that helps connect customers to local real estate
professionals.
3 Data based on activity during the
first 14 days for sale home listings were posted on Zillow.
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SOURCE Zillow