What First Time Home Buyers Want

From Loan Officer Joy James

First time home buyers have a confluence of factors that make now an excellent time to buy:  low interest rates, an abundance of properties at below market prices, and mortgage options that offer low down payments or other flexibility.

Even though first time homebuyers accounted for half the home purchases in 2010, the volume is still far from robust. So, what’s holding these customers back from jumping into the market more fully? Knowing the answer may help you tailor your marketing to them.

What new home buyers want
A new survey by Coldwell Bankers learned that 87 percent of homebuyers thought it was very important to find a home that is “move-in” ready.

“There’s a real ‘a-ha’ moment for sellers revealed by this survey that the condition and quality of their home matters a great deal to first-time home buyers,” said Diann Patton, consumer real estate specialist, Coldwell Banker Real Estate LLC.

Because condition is so important to buyers, distressed properties, even at bargain basement properties, may not appeal to future homeowners who have neither the desire nor the funds to make necessary renovations. It’s a challenge.

First Time Home buyers Turn Into Investors
The other striking development is the number of first time homebuyers who say they plan to eventually turn this first purchase into an investment property and rent it out. That impacts the type of things they look for in the property. Can it be renovated to appeal to a renter? Is it in an area that will attract a renter? Will it cash flow and cover the mortgage, insurance, and other expenses if a renter moves in?   By probing your clients, you can learn of these future plans and even encourage them to think of that as an option.

Buyers Admit Buying a Home is a Pleasant Surprise
For your tentative buyers, you can share this excellent feedback from recent buyers. In the Coldwell Banker survey, 67% admitted they were pleasantly surprised they could close on a home sooner than they thought because of market conditions, and that the house they bought was bigger, in a better neighborhood, and at a better price than they thought they would find.

Survey Coldwell Banker Real Estate, realtrends.com, RISmedia.com, National Association of Realtors (NAR),