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The newly released NAR 2022 Profile of Home Buyers and Sellers is packed with powerful data to guide your lead generation efforts in 2023. While many of their findings echo previous research, there has been a major shift in several important areas that will allow you to capture market share in areas you may not have considered in the past.
Real estate agents remain a vital part of the home search process and are the most used information source for homebuyers. Here’s what you need to know to from this year’s Profile to help you prosper in the challenging times ahead.
What buyers and sellers want most from their agents
- When searching for an agent, buyers were looking for someone who is honest, has integrity, is responsive, has strong knowledge of the real estate market and the purchase process.
- When hiring an agent, the three factors that were ranked highest on the Profile were the agent’s reputation, trustworthiness, and honesty.
Action Step No. 1
Honesty, integrity, market knowledge, reputation, and trustworthiness have always been the foundation of real estate success. They will be even more important as prices decline and there is increased competition for fewer transactions.
Referrals are still the primary source of business
According to this year’s Profile, 41 percent of all transactions resulted from a referral (36 percent were referred to their agent by a friend, neighbor, or relative and the other five percent were referred by another real estate agent.)
Action Step No. 2
Devote at least 36 percent of your 2023 marketing budget to developing referral business from your sphere. Some ideas include:
- Instead of farming or shotgun marketing techniques to strangers, use your print and digital marketing budget to stay in regular contact with your sphere and past client list.
- Conduct regular client appreciation events. Food trucks and ice cream socials are always popular and relatively inexpensive as well.
- Hold a first-time buyer seminar and ask your sphere and/or past clients to invite a friend.
- Hold a seller seminar for those who may have to move in this market. For those having financial difficulties, be sure to discuss why it may be smart to sell now before home values (and their equity) decline even more.
Make face-to-face lead-generation activities your highest priority
In the 2022 Profile, 80 percent of the sellers and 67 percent of the buyers only interviewed one agent that they hired. These numbers declined from the 2021 Profile where 82 percent of the sellers and 73 percent of the buyers only interviewed one agent that they hired.
Action Step No. 3: For any lead you did not meet in person, schedule a face-to-face meeting ASAP
Regardless of whether it’s a referral, an internet lead, phone call, or web inquiry, the first agent that meets in person with a seller gets the listing 80 percent of the time. In terms of buyers, two-thirds work with the first agent they interview. Make sure that agent is you by making face-to-face appointments a top priority.
Stop throwing away buyer leads
How many incoming buyer leads did you ignore this year? According to this year’s Profile, a whopping 58 percent of them we’re living in a home they owned prior to when they transacted. That’s up from 50 percent in 2021.
Action Step No. 4: Solve the contingent sale problem
Whenever you receive a buyer lead, determine if they own a home. If they do, meet with them in-person as quickly as possible to discuss listing their home before buying. This approach can create both a listing and a sale.
Many sellers are often reluctant to list their property unless they have located a replacement residence. “Power Buyer” models solve the so-called “contingent sale issue” by either providing a financing solution or by buying the owners’ current home so they can write an all-cash offer for their next home.
Companies such as Accept.inc, EasyKnock, FlyHomes, HomeLight, Homeward, Knock, Opendoor, Orchard, and Ribbon provide different versions of these programs. Before discussing these programs, investigate which of these programs are currently available in your area.
First-time buyers
First-time home buyers decreased to 26 percent of the market share (from 34 percent last year) and are below the historical norm of 40 percent among primary residence home buyers. In fact, 2022 had the lowest percentage of first-time buyers since NAR began collecting this data.
Nevertheless, in past down markets, first-time buyers accounted for up to 50 percent of all sales. It’s highly likely that this number will increase in 2023 since first-timers don’t have a property they have to sell.
Action Step No. 5
Unfortunately, the bulk of the American public mistakenly believes they must put 20 percent down to purchase a home. Most buyers have no idea that if they have good credit, they can purchase with as little as 3.5 percent down.
Even less known are the wide variety of programs that provide Down Payment Assistance (DPA) not only to first-time buyers, but to repeat buyers as well. In fact, 84 percent of the properties in the United States qualify for DPA, and the average amount of DPA that was provided through at DownPaymentResource.com (DPR) last year was $17,000.
To quickly determine whether down payment assistance is available for a specific listing you plan to show, visit Zillow and click through the mortgage tabs to “down payment assistance.” Zillow has partnered with DPR to display all the down payment programs available for all listings posted on their site.
Prospect for the 24% who ‘have to move’
In a rapidly increasing interest rate environment like the one we’re currently experiencing, one of the best places to prospect for clients are those who are being forced to move. This can result from major life changes (marriage, divorce, birth of a child, children leaving home, job change, retirement) as well as financial difficulties, mobility issues, or inability to no longer take care of one’s home.
As you can see in the chart below, 24 percent of the buyers said, “Did not have much choice, had to purchase.”
In terms of sellers, 35 percent of the reasons sellers cited for selling their previous home were due to major life changes or financial factors. The key reasons cited included:
- Retirement (11 percent).
- Change in family situation (marriage, divorce, birth of a child) 9 percent.
- Job relocation (7 percent).
- Upkeep too difficult due to health or financial limitations (5 percent).
- Cannot afford mortgage and living expenses (3 percent).
Action Step No. 6
To locate buyers and sellers who must move, pay close attention to the posts on your social media feeds. Look for comments about upcoming marriages, job transfers, having more children, retirement, etc.
Instead of merely liking their post or pouncing on them about doing business with you, be curious about what’s happening with them. For example, if there’s a job transfer and they have school age children, you may want to inquire whether their children will stay in school until the winter or summer break, or will they be moving during the school year.
If you are in a conversation with them, it’s easy at that point to ask if you can help them with handling any aspect of their upcoming job transfer.
Locate high-probability sellers
Based upon the chart below, the three categories of sellers most likely to move by age and the length of time they have owned their home are:
- Sellers who are 18-34 years old and have been in their home for two to five years.
- Sellers who are 35-44 years old and who have been in their homes six to 10 years.
- Sellers who are 55 or older who have owned their property for 21 years or more
Action Step No. 7
Instead of using a shotgun approach to marketing, use REISource to obtain lists of owners who meet these criteria. For example, say that you farmed an area of 500 homes in 2022. Instead of sending out one marketing piece to 500 owners in 2023, send out a Just Listed, Just Under Contract, Just Closed piece to the 50 homeowners that meet the key criteria above.
Prospect 55+ homeowners
Two of the most surprising statistics from this year’s Profile are the median ages of buyers and sellers. As the chart below indicates, the median age of first-time buyers jumped from a consistent number between 30-33 years of age to a new high of 36.
The most surprising number is the median age of repeat buyers which is 59, meaning half the repeat buyers are age 59 or more.
Equally surprising is that 55 percent of the sellers were age 55 or older. Thirty-eight percent are age 65 or older as indicated in the following chart.
Action Step No. 8
Given that a whopping 55 percent of the sellers in 2022 were age 55 or older, this demographic is an excellent place to focus your efforts. Seniors are often forced to move due to financial issues, the loss of a spouse, mobility issues, inability to maintain a large home, or to live independently. Steps to take include:
- Customize your print and digital advertising for these groups to show people who represent this demographic.
- Familiarize yourself with the 55+ independent living communities in your area. Many of these communities are eager to provide events that include holiday parties, speakers, local artists and musicians. Consider sponsoring these to remain front and center so when someone decides to list their home or condominium unit, they will contact you.
- Educate yourself about “right-sizing” and avoid using the term “downsizing.”
Digital marketing strategies
In 2023, your digital and web presence will be more important than ever, especially on mobile devices: 60 percent of all buyers search properties on their mobile device vs. 34 percent that use a laptop.
The top website features that were ranked “very useful” in this year’s Profile, were:
- Photos (85 percent)
- Detailed information about properties for sale (80 percent).
- Real estate agent contact information (53 percent).
- Floor plans (49 percent).
- Virtual tours (39 percent.)
Action Step No. 9
While most agents include their phone number on their website, many fail to include their city, state and zip code. This information is incredibly important because online property searches require both the city and the state. Moreover, many people short-cut this process by simply typing in the zip codes they want to search.
In addition, visuals are more important than ever (professional photos, floor plans, and virtual tours.) Make sure that every listing you take in 2023 takes markets using these tools sellers and buyers want and expect.
As you plan for your 2023, review the list of options above and select three that you feel would be the best fit for your business. Next, with the 80-20 Law in mind, devote 80 percent of marketing efforts and lead generation budget to these areas. Finally, monitor results. Be ruthless about eliminating what’s not working and focusing on what is driving business based upon your unique strengths and the unique market you serve.
Bernice Ross, president and CEO of BrokerageUP and RealEstateCoach.com, is a national speaker, author and trainer with more than 1,000 published articles. Learn about her broker/manager training programs designed for women, by women, at BrokerageUp.com and her new agent sales training at RealEstateCoach.com/newagent.
