Home Seller Alert - How Home Buyers Find Homes (part 2)
This post is part 2 in a multi part piece on how home buyers find homes.
All of the data from the discussions below comes from the 2008 study by the National Association of Realtors, Profile of Home Buyers and Sellers. I will refer to this as the Study in the subsequent discussion.
Where Homebuyers Found the Home They Purchased
The actual survey question posed to home buyers in the Study was "For the home you purchased in 2008, how did you first learn that the home was on the market?" The results were:
Real Estate Agent 34%
Internet 32%
Yard sign 15%
Friend, relative or otherwise knew seller 9%
Home builder 7%
Newspaper Ad 3%
This survey questions shows the impact that the internet has had on the industry. The Study reports historical results to the 2001 study. In 2001, real estate agent accounted for 48% of the responses. Print advertising was 9%. Knew the seller was 12% and internet was just 8%.
The responses also show that even though most home buyers use a real estate agent to purchase a home, agents don't always find the home. In fact, most don't. The internet has empowered buyers to find their own home. This suggests that marketing to both agents and buyers makes the most sense. Or in consumer marketing parlance, you should use a mix of trade (agent/broker) and consumer (home buyer) advertising.
I am going to recasts the numbers above looking at just consumer avenues for people searching for a resale (not new construction home). This will show the prominence of each method available in the typical home selling situation (ie a homeowner trying to sell their home). The consumer methods available to such a person are Internet, yard sign, friend/relative, and newspaper. Here are the percentages recast for just those categories:
Internet 54%
Yard sign 25%
Friend, relative, knew seller 15%
Newspaper ad 5%
Looking at these numbers, where would you spend your ad dollars on consumer advertising? The only real "opportunities" to spend money come down to either "Internet" or "newspaper". While a sign is important, you can only spend so much on a yard sign and you don't gain much of an advantage after you put the words "For Sale" and a phone number on the sign. Similarly, finding an acquaintance to buy the home just requires shoe leather. After you have called all your friends and relatives or maybe mailed a post card to the neighborhood, there isn't much left to do. Internet advertising out performs newspaper by a margin over nearly 11 to 1. Or said anther way, you are 11 times more likely to sell your home if you take the $100 for a weekend classified ad and put it into a Google pay-per-click ad campaign.
Back to the question from my previous post, "Should all marketing dollars be spent on marketing to real estate agents since 83% of buyers use an agent?" The answer is no, because most buyers (66% in this case) actually find the home that they eventually purchase on their own. The next obvious questions is "Why do I need a real estate agent if most home buyers find homes on their own?" More on this later.