I'm Selling My Home...
“I’m selling my home, but who are my buyers?” Hey, Dave Edwards, Treasure Valley Dave in Nampa, Idaho. I want to talk about who your buyers are when it comes time for you to sell your home.
This information comes from the National Association of Realtors (N.A.R.). Every year, they intensely dive into what’s going on with buyers and sellers in the market. And 2023 is no different.
Also, we have some information from the U.S. Census Bureau. They’re all reputable outfits. Let’s get right into it.
Characteristics of Home Buyers
Let’s look at this through the lens of your seller. You want to know who your target market audience is. Selling your home is like selling anything else in that you need marketing. It would help if you found an audience, a pool of buyers who are ready, willing, and able to buy what you have.
But you don’t have thousands and millions of houses you’re putting on the shelves of Walmart and Amazon. You have your house to sell and want to ensure this marketing is done right to get the correct market exposure and the best price possible.
Who Are My Home Buyers?
The first-time home buyers made up 32% of the buyers for 2023. That’s almost a third of all first-time home buyers. Let’s get into this a bit more.
A first-time home buyer was typically 35 years old, and the repeat buyer was 58. We have first-time home buyers who probably have a young family and are newer in their careers. The 58-year-olds, the repeat buyers, are probably:
- Upsizing to that lovely house that they deserve
- Or downsizing because they don’t need as big a home as they thought they did
More about the information on your buyers… 68% were couples, and 29% were singles. What does that mean for you as a seller?
Well, let’s consider the following statistic: 70% of the recent buyers did not have a child under 18. So, 30% of the buyers do have a child under 18. That means a third of the time, being close to parks and schools is an attractive feature, but not as much as you would think.
With two-thirds of the buyers not having kids, parks may be fine. But it is a feature you want to exploit and say, “Hey, you know what? We’re next to a school. Blah, blah, blah.”
Veterans as Home Buyers
What else do we know about buyers? 16% of the home buyers were veterans. From a marketing perspective, veterans can use a V.A. loan. What’s attractive about a V.A. loan for a vet is that they can get in with no money down sometimes. It’s not that they have to, but they can do that.
Also, there are often sweet financial terms that come with that. There will be some things that veterans need help paying for in the transaction process. Those are typically minimal. I’ll give you an example:
I recently sold my home, and my buyer was a vet. He used a V.A. loan and needed some help with the down payment so I could raise the price of my home a little bit and then give the credit back to the veteran to use for his closing costs. That worked out nicely. But 16% is a substantial amount.
Characteristics of Homes Buyers Purchased
13% of home buyers purchased a new home, while 18% purchased a previously owned home.
Now, this is nationwide. The numbers in the Treasure Valley area are different because we only have a few previously owned homes. We do have builders that are building a lot right now. That’s what’s keeping our inventory at a level because nobody is selling their existing homes.
Most buyers who purchased a new home did so to avoid problems with plumbing and electricity. That was 45% of the people who have bought a new home. They didn’t want issues with plumbing or electricity. Unless you’re a builder, you’re selling an existing home.
One thing that attracts those buyers is if we have a pre-inspection done on your house, fix those issues, and use that as a marketing point. Say, “Hey, you know what? We had a professional come out here, and they found nothing.” Or, “They found these things, and we’ve got them fixed, so you don’t have to.”
And maybe the vendors have a warranty. We can also offer the buyer a homeowners’ warranty or credit so they can buy their own and not worry about that. We’re trying to grab those people who will otherwise go with new construction for your house.
Also, buyers who purchased previously owned homes were most often considering a better price at 38%. Again, in the Treasure Valley, it’s a different story here. Existing homes are going for the same price as brand-new homes. Many builders offer substantial incentive packages, depending on the price point of the house.
I saw C.B.H. recently had up to $45,000, but typically we’re catching up to $20,000 or $25,000. That can often bring a new home down to the same price level as an existing home.
Buyers moved from 20 miles away to the house they bought. So, they didn’t move far. In Treasure Valley, Idaho, everyone from the blue states is coming up here. I mean, it’s like craziness.
Moving to Canyon County, Idaho
I’m over here in Nampa, which is Canyon County. I pulled up the most recent information from the U.S. Census until 2020.
Canyon County has a population of 220,860 people. Non-movers for that year were 178,734. We only had a few people moving. Most people stayed in their homes that year. Movers made up of 23,872 people.
The most significant number of people moving to Canyon County are already living there. So, what does that mean to you as a seller? That means that your buyer likely lives here in the county.
Quality of Neighborhood
The next thing that N.A.R. reports is that 60% of home buyers cited the quality of the neighborhood as the most critical factor. They live in Canyon County and are looking for a quality neighborhood.
Maybe their neighborhood no longer works for them — I can understand that. Or they need a neighborhood that has more kids to grow up with their kids. Or maybe they’re an older couple that wants peace and quiet without kids. Perhaps the quality of their neighborhood might be closer to shopping.
Affordability of Homes
As a seller in Canyon County, your most likely buyer/customer will be someone already in Canyon County. Back to the N.A.R. report, the following reason that 39% said was the affordability of homes. What are some things that you could do with that?
Don’t go overboard on fix-ups and add-ons, like R.V. bay and two new bedrooms, because you may not get that money back. Also, that might make the house unaffordable. That would be one of the reasons that 39% of the people are looking to move.
Let’s also say that one of the things that will make a house affordable for buyers — considering 1/3 of those buyers are first-time home buyers — is the seller’s help buying down an interest rate. We can plan to come in and ask for top dollar but be willing to help the buyer get their interest rate down. That’s going to help with their monthly affordability.
The extra $10,000 on a house price doesn’t change the monthly figures nearly as much as buying down an interest rate.
So, back to the U.S. Census data, Canyon County has many good data. Where else did most people who moved to Canyon County come from? Was it somewhere in California or Washington state? Nope. They came from Ada County: 6,554.
The next closest county was Owyhee County, on the other side of Canyon County, closer to Oregon, at 779. Then, the next one is our first one out of state, which is Salt Lake County, Utah, at 678. We see California once we get down to 304 people.
Don’t go all wigging out and saying, “Oh, those Californians are ruining Nampa and Caldwell and Canyon County.” Most people moving to Canyon County are from Idaho, over on the other side of the valley.
Moving to Ada County
Ada County has 465,697 population, and non-movers make up 389,580. A lot of people are still staying, but a lot of people are also moving. So, the number of people who moved within Ada County was 443,163. But now, let’s look at where they’ve come from.
Well, turnabout’s fair play, right? The #1 county that people moved from is Canyon County: 3,357. The following significant number from another county is Orange County. It’s 1,192 people, so that’s a small number. Then, the next place is from over in the Pocatello area: Bannock County, 1,162. After that, we have San Diego County at 737.
Whether in Ada County or Canyon County, your buyer will likely be from the Treasure Valley. If you live in a quality neighborhood, ensure we promote that. If you have a home that can be affordable for a buyer, let’s advertise that as well.
Buyers Purchasing Homes
Buyers typically purchase their homes for 100% of the asking price, with 25% purchasing for more than the asking price. Yeah, statistically speaking, no low-ballers are coming in and beating you on that. So, if you want to sell your house, let’s get it priced right.
Part of marketing is knowing what the buyers will pay. The typical home purchased was 1,860 square feet with 3 bedrooms and 2 baths, and it was built in 1985. Again, this is for nationwide.
The average age of houses in the Treasure Valley is much newer than in 1985. We only had a few houses around in 1985. Most homes were built within the last 20 years.
The Home Search Process
What are the buyers going through? Well, 41% of the buyers said the very first step they took was to look at properties online. That means we need to have good pictures. We need to have a professional photographer out and take some drone pictures of the neighborhood or backyard.
We want to be upfront and honest with everything. Have you seen those pictures? You look at them, and the place resembles the Taj Mahal. But when you go out to see it, it’s like the size of a phone booth. No, we need to be honest with our pictures. We want to have nicely taken pictures.
Moving on, buyers typically searched for 10 weeks and looked at a median number of 7 homes. Of those, they viewed 4 homes online only. Then, it comes back to why pictures are so important. It’s one thing that we do when we help someone sell their home.
It depends on services, but we also do a video tour. We have so much experience with buyers that we like to say we’re their eyes and ears. Even Mareen is their nose because she’s got a super sniffer.
We absorb or talk about things as we go through houses and do the same for our listing videos. We’re walking through and pointing out the things that pose challenges and opportunities.
Finding the Right Home
Finding the right home was the most challenging task for buyers at 59%. As real estate agents, we want to make it as easy of a process as possible for the buyer to get to know your house.
All home buyers use the internet to search for a home. The most valuable content on the websites was photos and detailed information about the properties for sale. It isn’t enjoyable when you’re looking for information, and it’s not there.
Sometimes, the listing agent will put some information into the super secret note that does not go out to the general public. But sometimes, there’s information there that needs to be known. I’d been helping some people who looked at homes in 55 communities and trailer parks. That’s one of the critical pieces of information buyers need.
Let’s make the process as easy as possible for the buyers, so we get more buyers engaged. We will get a better price based on the law of supply and demand because more buyers want your place.
Satisfying Home-Buying Experience
Interestingly, 92% of recent buyers were at least somewhat satisfied with their recent home-buying experience. Buyers have a very low expectation of how great this process can be. We will blow their socks off if we wow them with the listing and the pictures. They’re going to be so thrilled.
And what happens when we have happy buyers? We can get more exposure. We can get a higher price for your house.
How did buyers interact with the sellers and the real estate agent? 89% of the buyers used a real estate agent, and 6% went directly to the previous owner. The buyers who used an agent said that the reason was that they needed help finding the right house. And buyers, 56% of the time, got their agent from a friend, neighbor, relative, or somebody they’ve worked with.
How does that work out? If you’re selling a house by yourself, that means that 44% of the people out there don’t have an established agent that you might have a shot at getting to your place. But if you’re going to sell a house on your own, you’ve just cut out 56% of the people that would be looking at a minimum.
Financing the Homes
So, 80% of the buyers financed their homes. For first-time home buyers, the typical down payment was 8%. Then, for repeat home buyers, it was 19%. It will likely be 20% because then they can get out of having to pay the PMI, which saves them a lot of payment.
But back to first-time home buyers, 8% is their down payment. As a seller, if you come in with a few thousand dollars to help with closing costs, they can take more of the money. That can be put towards their down payments or buying a U-haul that moves stuff back and forth.
Does it cost you a lot? Maybe not. Because we can raise the price — whatever amount — and then give the buyers a credit. It will help them with their closing costs or buy down their interest rate, impacting their budget more than a couple of extra thousand dollars on the purchase price.
For Sale by Owners (FSBO)
Let’s talk about FSBO or For Sale by Owners. I know you’re selling your house, and you’ve seen all the videos. You could do it yourself — and you sure can — but 7% of the recent home sales were for sale by owners.
Of those 7%, 57% said that they already knew who the buyer was. Maybe it was a family member or a friend. Also, we said earlier that 56% of the buyers out there are already working with an agent that was referred to them or they had used in the past. It means 44% of the buyers aren’t working with an agent.
Also, a smaller percentage of agents are looking for your house. There’s even a smaller number that are finding your house. You may get 7% of homes sold if you know the buyer.
Then, you take out that 57%, where the owner already knew who the buyer was. That means that 3% of the homes are for sale by owner to someone in the general market.
FSBOs typically sell for less than the selling price of other homes. They said that nationwide, the median sales price of an FSBO was $310,000. Meanwhile, the median price of an agent-assisted home was $405,000. That’s a $95,000 difference.
Again, much of that might come back to the fact that the seller knew the buyer on an FSBO deal. Because of that, they could give them a sweet deal to someone in the family or a friend.
How does it break out with 3% of the righteous market? Well, let’s think about that for a moment. Why would you want to go straight to an FSBO if you’re a buyer? It’s probably because you’re sophisticated and want a screaming deal.
Anyway, there’s so much important stuff to know when it’s time to sell your house. Thanks for stopping in and learning more about real estate in Nampa, Idaho and the Treasure Valley. When it comes time to sell or buy a home, your Treasure Valley Dave team is your real estate expert by your side, helping you get home.