By Zillow, Special for USDR
The spring home-buying season is gearing up to be one of the most competitive in recent history, as the shortage of for-sale homes is keeping inventory tight and prices high. Buyers and sellers hoping to be successful this spring should start the process early, according to the 2016 Zillow Group Report on Consumer Housing Trends. Of over 13,000 U.S. residents surveyed, the number one regret for both buyers and sellers was not starting their home search or prepping their home to sell soon enough.
U.S. home values across the nation are up 7.2 percent over the past year, and there are three percent fewer homes to choose from than a year ago, according to the January Zillow® Real Estate Market Reports.i
“This spring, both buyers and sellers should be prepared for fast-moving sales, intense negotiations, and even bidding wars,” said Jeremy Wacksman, Zillow Group chief marketing officer. “Home shoppers and sellers are motivated to become more strategic and knowledgeable about what’s happening in their neighborhood. Understanding whether you are in a buyer’s or a seller’s environment will help you manage your expectations and will give you insight into what you’re going to need to bring to the table in order to close the deal.”
The Zillow Group Report on Consumer Housing Trends reveal strategies for how to buy and sell in today’s highly competitive market.
- Keep your options open. More than half (52 percent) of buyers said they also considered renting, and more than one third (37 percent) of first-time buyers seriously considered continuing to rent. Savvy shoppers will have a Plan B in place, hoping to buy if it works out, but willing to sign a lease for a home if they don’t make a deal by the time they need to move.
- Be realistic with your budget. Once you set it, stick to it: first-time home buyers are more likely to exceed their budget than repeat buyers (39% vs 26%). Before you meet with a lender to determine how much mortgage you’ll be approved for, take a good look at your individual finances and spending preferences to determine the monthly payment range that you feel you can comfortably afford. Use Zillow’s mortgage calculator to help with you with the math.
- Get your financing squared away early. Plan to meet a few lenders four to six months ahead of when you’re planning to buy to ensure you can make a competitive offer quickly when you find your dream home. The majority (82 percent) of buyers get pre-approved, with 77 percent getting pre-approval from a lender before finding a home on which they are interested in placing an offer.
- Find an agent with a winning track record. Take the time to find an agent who has expertise in fast negotiation, leveraging escalation clauses, and winning bidding wars. Only 46 percent of buyers got the first home on which they made an offer, demonstrating that competition is now part of the process. Use search tools, like Zillow’s Agent Finder, to choose an agent based on sales and listing activity, area of expertise and reputation.
- Communication is key. Make sure your preferred method – and frequency – of communication matches that of your agent. One third (33 percent) of all buyers preferred phones call with their agent over emailing (21 percent) or texting (15 percent). Buyers can use the agent reviews on Zillow to learn more about prospective agents and their clients’ experiences.
- Start Early & Be Strategic. Sellers consider putting their home on the market for five months before they list it. But the top seller regret is that they wished they spent more time prepping for the sale. Many cities have a magic window in the spring when homes have a higher likelihood of selling quickly for more money.
- Work with an agent from the start. The vast majority (90 percent) of sellers who sold quickly and for more than list price worked with an agent, and two out of three (58 percent) began working with an agent at the very beginning of their selling journey.
- Pay attention to your online curb appeal. The majority of buyers begin their search online. Sellers who sold their home for more than list price made imagery and home information available online: 48 percent had professional photos taken of the home, 30 percent shot video footage and 21 percent even shot drone footage. Zillow’s video walk-throughs gives sellers an easy way to show home features that are hard to capture in photos.
- Home improvements can be a worthwhile investment. Sellers who fetched above list price tackled home improvement before listing their home, being 50 percent more likely to take on a large project like modifying an existing home plan and 20 percent more likely to renovate a kitchen than the average seller.
- Don’t be afraid to try again. In many markets, nearly half of listing views occur in the first week the home is on the market. Twenty-six percent of those who sold above list price took their home off the market once to adjust the sales price, opting to start anew rather than letting the home languish on the market with minimal activity.
The full 200-page Zillow Group Report on Consumer Housing Trends, which is free and available to the public, can be accessed here: www.zillowgroupreport.com
Zillow® is the leading real estate and rental marketplace dedicated to empowering consumers with data, inspiration and knowledge around the place they call home, and connecting them with the best local professionals who can help. In addition, Zillow operates an industry-leading economics and analytics bureau led by Zillow’s Chief Economist Dr. Svenja Gudell. Dr. Gudell and her team of economists and data analysts produce extensive housing data and research covering more than 450 markets at Zillow Real Estate Research. Zillow also sponsors the quarterly Zillow Home Price Expectations Survey, which asks more than 100 leading economists, real estate experts and investment and market strategists to predict the path of the Zillow Home Value Index over the next five years. Zillow also sponsors the bi-annual Zillow Housing Confidence Index (ZHCI) which measures consumer confidence in local housing markets, both currently and over time. Launched in 2006, Zillow is owned and operated by Zillow Group (NASDAQ: Z and ZG), and headquartered in Seattle.
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i The Zillow Real Estate Market Reports are a monthly overview of the national and local real estate markets. The reports are compiled by Zillow Real Estate Research. For more information, visit www.zillow.com/research/. The data in Zillow’s Real Estate Market Reports are aggregated from public sources by a number of data providers for 928 metropolitan and micropolitan areas dating back to 1996. Mortgage and home loan data are typically recorded in each county and publicly available through a county recorder’s office. All current monthly data at the national, state, metro, city, ZIP code and neighborhood level can be accessed at www.zillow.com/local-info/ and www.zillow.com/research/data.