Andrew Wetzel's Musings

May 9, 2020

How Sellers Sold Real Estate in 2019:  Who is the Typical Seller?

Today I want to discuss the 2019 NAR or National Association of REALTORS Profile of Buyers and Sellers.  The report comes from a survey using 125 questions mailed to over 159,750 recent home buyers who purchased a primary residence between July 2018 and June 2019.  The focus of this podcast will be buyers who sold one home to buy another.  This was a national survey so your market may be quite different.  Real Estate is local:  there is no national Real Estate market so please contact me for information about your local market.

  • NAR has been collecting seller data since 1985 when the typical owner remained in their home for a median time of 5 years. In 2019 that number was 10 years which suggests that buyers may want to think long-term about their investment.  What appears to be a solid investment today may look different later.  Unfortunately, I still see sellers who paid more for their house than it is worth today and that can delay being able to sell it;
  • Sellers between the ages of 18-34 typically sold within 5 years while those over 75 sold after 19 years;
  • The median selling price was 99% of the final asking price with 27% getting full price, 17% getting more than asking and 20% getting less than 95% (7% got less than 90%). If you are an owner whose house is not attracting serious interest, meaning offers, this is important to know.  Many buyers think they are better at negotiating than they really are and are hesitant to start with their “best offer”.  In a very competitive situation they may not get a second chance.  On the other hand, a buyer may prefer to make an offer on a house closer to its market value to avoid having an appraisal issue or risk losing their second choice to another buyer when their offer on a house expires.  Whether a listing agent should disclose the existence of other offers is debatable but this should only be done when a seller allows it.  In some markets and with some buyers, competition may be welcome.  In others, not so much.  Sellers may also think themselves better at negotiation than they really are so they need good advice from a trusted and respected representative.  Ego can be a terrible thing to overcome.  Last point, showings are nice but they do not guarantee a sale;
  • Houses selling in the first 4 weeks achieved a median of 99%; after 16 weeks the number fell to 93%.
  • 13% of houses purchased sold for more than asking price with 26% achieving the asking price and 24% selling for 95% or less than asking price;
  • The typical seller was 57 years old;
  • 69% were repeat sellers while 31% were selling for the first time;
  • 70% who sold a home stayed in the same state; 17% moved to another region; 13% stayed in the same region but a different state;
  • 44% bought larger homes; 30% bought a similar size; 26% down-sized. The age of the seller strongly correlates with these statistics;
  • 48% bought a newer home than they sold; 28% bought one the same age; 24% bought an older home;
  • 44% spent more than their selling price; 26% spent the same; 30% spent less;
  • The most common reason for selling for all sellers was that the house was too small (13%), followed by moving closer to friends and family (a combined 16%), job relocation (11%), change in family situation (10%) and neighborhood became less desirable (10%);
  • 29% of first-time sellers cited size as being too small whereas repeat sellers cited moving closer to friends and family (17%). Selling is an expensive proposition so having to move in the short term because you outgrew a house or simply needed more space can be costly;
  • 89% of all sellers used a Real Estate agent with only 8% being a FSBO. 89%, while down from 91% last year, is consistent with the last few years despite the presence of the Internet.  The % of FSBOs has steadily declined since 2000  even though the Internet was thought to have helped with exposure.  Most of those involved a seller who the buyer already;
  • 89% of all sellers listed their homes on the Multiple Listing Service while 4% did not; 65% used a yard sign;
  • 21% of sellers wanted help marketing their home, 20% wanted to sell within a specific timeframe, 19% wanted help with pricing and 16% wanted help with ways to sell it for more;
  • The median selling time for all sellers was 3 weeks with 11% selling in less than one week, 35% taking 1-2 weeks and 14% taking 3-4 weeks. There is a correlation between the % of the final asking price achieved and the length of time it takes to sell.  While it can be a distracting obsession, many buyers look at the “days on the market” as an indicator of a home’s desirability and may avoid homes that are simply over-priced although they have no issues.  Houses that sold within 2 weeks or less achieved 100% of the final asking price whereas houses on the market for 17 weeks or more achieved only 94%.  Keep in mind that many houses are reduced in price to attract attention so looking at the final asking price as compared to the selling price is only one part of the story.  Sellers determine the asking price but buyers determine the value.  If nothing else, easy access to the Internet has allowed buyers to competitively shop meaning they at least know what is on the market although relying on valuation algorithms is risky.  Houses tend to get the most activity within a week or two of hitting the market.  Once the current supply of buyers knows a house is for sale and no one buys it, something has to energize and existing buyer or other buyers have to start their search;
  • 34% of sellers used buyer incentives to attract interest. The top three were home warranties (17%), closing cost assistance (14%) and remodeling/ repair credit (8%).  After 16 weeks this number rose to 47%.  These are not guaranteed to get the job done and should be discussed at the outset;
  • 66% of sellers were “very satisfied” with the process; 26% were “somewhat satisfied” and 8% were somewhat (5%) or very (4%) dissatisfied;
  • The overall median selling price was $275,900. Remember that this is a national number.  The median selling price for FSBOs was $200,000; for agent-assisted sales it was $280,000 and for FSBOs who eventually used an agent the median selling price was $261,000.  This clearly shows the advantage of hiring and paying a professional;
  • The median equity in a sold home was $60,000.

The bottom line is that this can be a very confusing process.  This NOT a retail transaction!  It is typically costly enough without making expensive mistakes.  Unless you do this regularly, I respectfully suggest that you trust a trained, experienced professional.  Whether you want to trust your most valuable asset to someone with little experience or someone who has a long track record is up to you but any professional is likely to know more than an average seller looking to save a few dollars.  I understand that signing a formal contract with someone, even if recommended to you, is quite a leap of faith.  Most of us can offer options to increase your comfort level.  After all, we want to make sure that you “fit” with us as well.

Selling Real Estate is unique compared to most typical purchases:  not only is it much less frequent than other purchases, it typically involves multiple steps, each offering its own challenges.  If you would like to discuss selling or buying or if you have any thoughts about this, please contact me.

Please look for my posts on how buyers bought Real Estate in 2019.

There is no time for inexperience, empty promises or false expectations! 

HIRE WISELY!  We are not all the same!

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