Know Your Buyers Tuesday July 28, 2009. Topics To Be Covered Twilight Open Houses Twilight Open...

Know Your Know Your BuyersBuyersTuesday July 28, 2009Tuesday July 28, 2009

Topics To Be Topics To Be CoveredCovered

Twilight Open HousesTwilight Open Houses

DRE License NumberDRE License Number

Lending-Waiting PeriodLending-Waiting Period

Buyers SurveyBuyers Survey

Twilight Open Twilight Open HousesHouses

For the next 30 days, try sitting For the next 30 days, try sitting between the hours of 3:00 to between the hours of 3:00 to 7:30pm. 7:30pm.

Avoid the heatAvoid the heat

Little or no competition after Little or no competition after 5:00.5:00.

DRE License DRE License NumberNumber

Must be on ALL solicitation Must be on ALL solicitation materialsmaterials

Including, but not limited to the Including, but not limited to the followingfollowing: : – Business CardsBusiness Cards– StationaryStationary– WebsitesWebsites– Promotional and Advertising Flyers, Promotional and Advertising Flyers,

Brochures, Email & Regular Mail, and Brochures, Email & Regular Mail, and any other marketing or promotional any other marketing or promotional materials designed for solicitation.materials designed for solicitation.

DRE License DRE License NumberNumber

Exemptions:Exemptions:

–Print Advertising in the Print Advertising in the News PaperNews Paper

–For Sale Signs placed on or For Sale Signs placed on or around the propertyaround the property

–Advertisements in electronic Advertisements in electronic media including radio, media including radio, cinema and TV ads.cinema and TV ads.

Lending-Waiting Lending-Waiting PeriodPeriod

Regulators require lenders to Regulators require lenders to provide borrowers with initial provide borrowers with initial disclosures of estimated costs.disclosures of estimated costs.

Lenders are prohibited from Lenders are prohibited from collecting fees until borrower collecting fees until borrower has been given loan cost has been given loan cost disclosures.disclosures.


New Rules require a 7 day New Rules require a 7 day waiting period after borrowers waiting period after borrowers receive disclosures.receive disclosures.

If loan costs increase more If loan costs increase more than 1/8 of 1%, the lender is than 1/8 of 1%, the lender is required to re-disclose, and the required to re-disclose, and the borrower has another 7 days to borrower has another 7 days to consider the transaction. consider the transaction.


Main reason for ChangesMain reason for Changes::– Closing dates will be more Closing dates will be more

closely tied to lender and closely tied to lender and agents accurate estimates in agents accurate estimates in costs and rates.costs and rates.

– Purpose of the rule changes Purpose of the rule changes are to afford consumers better are to afford consumers better access to and more time to access to and more time to consider key elements of a consider key elements of a major financial transaction.major financial transaction.

C.A.R. Buyer C.A.R. Buyer SurveySurvey

Number of Sales increased 27% Number of Sales increased 27% in 2008.in 2008.

Number of Sales are projected to Number of Sales are projected to increase another 25% in 2009.increase another 25% in 2009.

49% of buyers bought thru a 49% of buyers bought thru a regular sale.regular sale.

38% bought an R.E.O38% bought an R.E.O13% bought a Short Sale.13% bought a Short Sale.


Counties with huge number of Counties with huge number of distressed salesdistressed sales::

– Riverside, Solano, San Bernadino, Riverside, Solano, San Bernadino, and Kern.and Kern.

– These counties had over 80% of These counties had over 80% of home sales were distressed sales.home sales were distressed sales.

– Also experienced high growth in Also experienced high growth in sales.sales.


Homebuyers are optimistic about Homebuyers are optimistic about future direction of Home Prices.future direction of Home Prices.

One in Three Buyers believe One in Three Buyers believe Prices will go up within five years.Prices will go up within five years.

60% of Buyers believed Prices 60% of Buyers believed Prices would go up in ten years, and would go up in ten years, and 37% were unsure about home 37% were unsure about home prices. Only 3% thought Prices prices. Only 3% thought Prices would go down or stay flat.would go down or stay flat.


First-time Buyers doubled from First-time Buyers doubled from 19% in 2008 to 38% in 2009.19% in 2008 to 38% in 2009.

Statewide median home price Statewide median home price has declined 60% from its peak.has declined 60% from its peak.

The unprecedented price The unprecedented price decline has led to dramatic decline has led to dramatic improvements in Affordability, improvements in Affordability, currently at 69% - up from 46% currently at 69% - up from 46% a year ago.a year ago.


Level of Difficulty obtaining Level of Difficulty obtaining Financing:Financing:– Scale of 1-10, with “1” being “easy”, Scale of 1-10, with “1” being “easy”,

and “10” being “very difficult”.and “10” being “very difficult”.– Homebuyers on average had a level Homebuyers on average had a level

of difficulty in obtaining financing of of difficulty in obtaining financing of 8.1. 8.1.

– 27% responded with a “10”.27% responded with a “10”.– Those who bought an R.E.O. gave a Those who bought an R.E.O. gave a

rating of 8.9.rating of 8.9.


Down Payments:Down Payments:

– Home buyers on average put a Home buyers on average put a down payment of 25.1% down payment of 25.1% compared to 19.4% in 2008.compared to 19.4% in 2008.

– The average down payment for The average down payment for first time buyers increased to first time buyers increased to 19.7% in 2009.19.7% in 2009.


FinancingFinancing::

–7 of 10 home buyers used 7 of 10 home buyers used Fixed Rate Mortgages and 3 Fixed Rate Mortgages and 3 out of 10 used Adjustable Rate out of 10 used Adjustable Rate Mortgages.Mortgages.

–1 of 10 first time buyers asked 1 of 10 first time buyers asked their relatives for financial their relatives for financial assistance.assistance.


Time With Buyers:Time With Buyers:

– In general, home buyer In general, home buyer devoted more time from start devoted more time from start to finish on the home buying to finish on the home buying process.process.

–On average, they spent 8.4 On average, they spent 8.4 weeks weeks consideringconsidering buying a buying a home in 2009 compared to home in 2009 compared to 7.2 weeks in 2008.7.2 weeks in 2008.


Time With Buyers:Time With Buyers:

– 6.6 weeks investigating 6.6 weeks investigating neighborhoods before contacting an neighborhoods before contacting an agent, compared to 6.2 weeks in agent, compared to 6.2 weeks in 2008. 2008.

– 10.3 weeks searching for a home 10.3 weeks searching for a home with their agent compared to 8.7 with their agent compared to 8.7 weeks in 2008.weeks in 2008.

– Internet buyers spent more time Internet buyers spent more time upfront on their own, but less time upfront on their own, but less time with their agents.with their agents.


Internet vs. Traditional:Internet vs. Traditional:– Internet buyers on average visited Internet buyers on average visited

13.6 homes with their agent.13.6 homes with their agent.– Traditional buyers visited 25 homes.Traditional buyers visited 25 homes.

– Only 13% of all home buyers looked at Only 13% of all home buyers looked at News Paper/Magazine ads to search for News Paper/Magazine ads to search for a home.a home.

– 84% of homebuyers used the internet 84% of homebuyers used the internet as a significant part of the home as a significant part of the home selection processselection process..


Internet Buyers:Internet Buyers:– 94% strongly agreed that using 94% strongly agreed that using

the internet helped them better the internet helped them better understand the understand the home buying home buying processprocess..

– 92% strongly agree that the 92% strongly agree that the internet helped them understand internet helped them understand home valueshome values better. better.

– 62% strongly agreed that the 62% strongly agreed that the internet helped internet helped increaseincrease their their appreciation for appreciation for what real what real estate agents doestate agents do..


Online Tools:Online Tools:

– Multiple pictures Multiple pictures – Virtual ToursVirtual Tours– Neighborhood ProfileNeighborhood Profile

– Map/directions has dropped in Map/directions has dropped in popularitypopularity


Real Estate Websites:Real Estate Websites:– Realtor.com-visited by 89% of home Realtor.com-visited by 89% of home

buyers.buyers.– Real Estate Company website-visited by Real Estate Company website-visited by

81% of home buyers.81% of home buyers.– Individual Real Estate Agents Site-visited Individual Real Estate Agents Site-visited

by 66% of home buyers.by 66% of home buyers.– Zillow-visited by 55% of home buyers.Zillow-visited by 55% of home buyers.– Yahoo Real Esate-visited by 53% of home Yahoo Real Esate-visited by 53% of home

buyers.buyers.– Cragslist-visited by 49% of home buyers.Cragslist-visited by 49% of home buyers.


Internet As A Threat?Internet As A Threat?

– Less than 10% of internet buyers Less than 10% of internet buyers felt that the information that they felt that the information that they gathered online was as useful as gathered online was as useful as that provide by their agent.that provide by their agent.

– None of them said the information None of them said the information collected was more useful than collected was more useful than that provided by their agent.that provided by their agent.


Agent Selection Process:Agent Selection Process:– 62% of all buyers in 2009 interviews at 62% of all buyers in 2009 interviews at

least three agents before settling on least three agents before settling on one, a sharp increase from 40% in one, a sharp increase from 40% in 2008.2008.

– Internet buyers interviewed fewer Internet buyers interviewed fewer agents than traditional buyers.agents than traditional buyers.

– More than 1 out of 10 buyers will More than 1 out of 10 buyers will Google the agent before finally Google the agent before finally selecting who they want to work with.selecting who they want to work with.


Agent Selection Process:Agent Selection Process:– 23% selected their agent because he/she 23% selected their agent because he/she

understood how to purchase understood how to purchase Foreclosures, Short Sales or Distressed Foreclosures, Short Sales or Distressed Sales.Sales.

– 22% made their selection because agent 22% made their selection because agent seemed to be most responsive.seemed to be most responsive.

– 21% selected their agent because he/she 21% selected their agent because he/she seemed to be able to negotiate the best.seemed to be able to negotiate the best.


Response Times:Response Times:

– 67% expected a response from 67% expected a response from their agent within one hour or their agent within one hour or less.less.

– 98% expect at least a same day 98% expect at least a same day response.response.


Buyers Satisfaction With Agent:Buyers Satisfaction With Agent:

– 73% said their agent always 73% said their agent always quick to respond.quick to respond.

– 61% said their agent negotiated 61% said their agent negotiated a good deal on their behalf.a good deal on their behalf.


Buyers Dissatisfaction With Agent:Buyers Dissatisfaction With Agent:– 82% said their agent did not negotiate 82% said their agent did not negotiate

aggressively.aggressively.

– 18% said their agent was too slow to 18% said their agent was too slow to respond.respond.

– Home buyers who had their escrow Home buyers who had their escrow close on time has steadily dropped close on time has steadily dropped from 55% in 2006 to 37% in 2009.from 55% in 2006 to 37% in 2009.


Home Buyers Advice To Agents:Home Buyers Advice To Agents:– Improve the speed of communication.Improve the speed of communication.– Provide references for lenders who Provide references for lenders who

perform.perform.– Become more knowledgeable on REO’s Become more knowledgeable on REO’s

and other distressed properties. and other distressed properties. – Demonstrate to the buyer how the agent Demonstrate to the buyer how the agent

is negotiating aggressively.is negotiating aggressively.– Provide references for lenders to Provide references for lenders to

recommend the best product for the recommend the best product for the buyer.buyer.


Home Buyer Satisfaction With Home Buyer Satisfaction With Agent:Agent:

–64% would use the same 64% would use the same agent again in the future, a agent again in the future, a slight increase from 61% in slight increase from 61% in 2008.2008.


How Long Will They Stay?How Long Will They Stay?

– 77% plan on staying at their 77% plan on staying at their current home 37 to 60 months.current home 37 to 60 months.

– The median is 48 months.The median is 48 months.

– 0% said they would stay longer 0% said they would stay longer than 60 months.than 60 months.

Thanks for Thanks for being the best being the best

agents in agents in America!America!

Know Your Buyers Tuesday July 28, 2009. Topics To Be Covered Twilight Open Houses Twilight Open...

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