In an annual survey of home buyers, J.D. Powers and Associates found that buyers in 2011 were less satisfied with their real estate brokerage services than they were in 2010. The overall scores showed buyers averaging 797 points (on a 1000 point scale). In 2010, the average satisfaction score was 791. The biggest factor in the decline was lower satisfaction with the agent/salesperson. The role of the agent/salesperson is the most important factor in determining overall satisfaction with the real estate brokerage services, so the decrease in this element contributed strongly to the overall decline. Satisfaction with the agent/salesperson dropped 14 points to 814 in 2011.
While the media continues to say that it is a buyer’s market due to high inventories and limited sales nationwide, that doesn’t mean it is now easier for buyer’s to make a home purchase. Tightened lending standards and added costs now factor into the overall buyer perception. While home values in Texas have remained steady, even gaining in some metropolitan areas, the nation overall has slumped. Generally, that should equate with more satisfied buyers, so the recent decline is telling. Service is still important and Realtors who understand the changing needs of today’s buyers will create more satisfaction than those who continue to operate under older assumptions. Price and low interest rates alone do not make buyers satisfied.
Buyers also looked at fewer homes before making a decision. In 2011, the average buyer saw 9.0 homes before making an offer, down from 17.5 in 2010. The decrease in choice may have been a factor in overall satisfaction, but the impact was small in comparison to service-related issues.
Oddly, home sellers showed a gain in satisfaction, despite the national housing challenges. While it would seem as though fewer sales, greater inventory, and unqualified buyers would hurt seller satisfaction, the score in 2011 increased to 779 from 742 last year. Additional services seems to have increased in importance, even as many real estate offices cut down their service offerings in the last two years. But, homes are still selling, even if at a more modest pace than the last few years and sellers who price their homes competitively are seeing positive results.
Sellers had to endure fewer showings before receiving an offer. In 2011, the average number of showings dropped to 8.6 compared to 12.1 in 2011. The fewer showings certainly impacted the sellers’ overall satisfaction numbers.
Finally, 6 in 10 buyers and sellers say their real estate agent/salesperson asked for a referral or recommendation in 2011. While this is up from 47% in 2010, we wonder why this number would not exceed 90%. The best time to ask for a referral is while you are still working with a client, before their deal is completed. This is when they are most excited and optimistic and willing to share referrals. Following up the transaction with another request demonstrates that the agent is serious, dedicated, and motivated. We would highly recommend that realtors always ask for referral business.
Mission Mortgage recommends the following to future home buyers to help them make the most of their buying experience:
- Speak with a mortgage professional before you start your search. If you know the range of prices you can qualify for, it will help you to narrow your search, decrease the time you spend looking at homes, and eliminate disappointments and surprises. Mortage professionals can also help you to understand your credit score and how much money you will need at the closing table.
- Use a reputable real estate agent. Many buyers select their real estate agent through word of mouth, and this form of testimonial is very influential. Make sure that the agent you select understands your needs and financial situation so they can help steer you towards the best home value for your price point.
- Get your documents in order. Throughout the homebuying process, you will be requested to show various financial documentation. Having that in order prior to beginning your search will help make your search go more smoothly.
- Ask questions. Whether you have questions about mortgages or homes or the buying process, ask them. Do not be satisfied with answers that are vague or unconvincing. Buying a home is the single most expensive purchase most of us will make in our lifetimes. It is important that you understand the process and your role in creating a smooth purchase transaction.
For more information on making the buying process as smooth as possible, please also see our previous post: Ten Rules for Success in the New Mortgage Landscape.
If you would like to speak with a Mission Mortgage loan officer, please email us at firstname.lastname@example.org and we’ll help you understand your options and make the right home buying decision.