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A new study of home buyers
and sellers across the U.S.
shows that For Sale By Owner
(FSBO) activity fell to a
25-year low in 2006 and that
homes sold with the
assistance of a real estate
professional typically had a
median selling price that
was 31.9 percent higher than
homes sold by the property
owner.
Locally, in Massachusetts,
where many home sellers were
reluctant to acknowledge the
shift to a buyers market
until this past summer, FSBO
activity actually rose this
past year to 18 percent of
the market from 11 percent
last year. However, nearly
two-thirds of all FSBO sales
in Massachusetts were
closely held transactions
where the seller knew the
buyer, as a result just 7
percent of all FSBO
properties were placed on
the open market this past
year.
Furthermore, like their
counterparts nationally, Bay
State homeowners who chose
to hire a real estate agent
or broker to sell their home
were able to realize a
median selling price that
was 23.4 percent higher than
homes sold by the property
owner without the assistance
of a real estate
professional.
These findings, taken from
the 2006 Profile of Home
Buyers & Sellers report for
Massachusetts, offer
compelling data on the value
REALTORS® provide to
consumers during the
property transaction
process. The report,
produced annually since 2003
by the Massachusetts and
National Associations of
REALTORS®, also contains a
wealth of information on the
demographics, housing
preferences, and home buying
and selling experiences of
today’s consumers, including
the role and service s they
want a real estate agent to
perform for them during the
home search and sale
processes.
Specifically, the study
found that among
Massachusetts homeowners who
engaged a real estate broker
to help sell their home, 93
percent used a full-service
brokerage, 7 percent used a
limited service agency, and
less than 1 percent chose a
minimum service firm, such
as one in which “the agent
listed the home on the MLS
and performs few, if any,
additional services.”
Meanwhile, as a possible
reflection of today’s slower
home sales pace, the tasks
that most Bay State home
sellers said they wanted
their agent to perform was
to price the home
competitively (20%) and sell
it within a specific
timeframe (33%).
Among home buyers, nearly
nine in 10 (89%) of those
looking to purchase a home
in Massachusetts during the
past year sought the
services of a real estate
professional to assist them
with their home search, and
when they did over
three-quarters (78%) opted
to work with a buyer
representative.
This compares to 64 percent
of home buyers nationwide
who chose to work with a
buyer representative, and
reflects a steady increase
in the practice and
popularity of buyer agency
in the Bay State over the
past two years – before MAR
successfully worked to
clarify the state’s agency
law – when just 46.8 percent
of buyers used a buyer agent
to help them find a home.
Indicative of the growing
influence technology has had
on the real estate industry
and the point at which
agents are contacted during
the home search process, the
study found that nearly half
(46%) of all Bay State home
buyers in 2006 first learned
about the home they
purchased over the Internet,
a measurable gain from last
year when 38 percent of
buyers said they first found
out about the home they
bought online and up sharply
from 2003 when only 17
percent of buyers identified
the Internet as the sources
from which they first
learned about the home they
purchased.
The study further shows that
the role of real estate
agents has not been
diminished by the Internet.
In fact, the opposite has
occurred, with local buyers
who shopped for a home
online more likely to use an
agent to purchase their home
than buyers who did not use
the Internet during their
home search (87% vs. 79%).
This is significant since
today 71 percent of Bay
State home buyers report
that they use the Internet
frequently to search for
homes, compared to fewer
than half (44%) of all
buyers who said they
searched the Internet
regularly as part of the
home purchase process in
2003.
Nationally, as well as in
Massachusetts, buyers stated
that the most significant
factors influencing their
decision on where to buy a
home were: (1) the quality
of the neighborhood, (2) the
home/neighborhood’s
convenience to work, (3)
neighborhood’s convenience
to friends/family, and (4)
the quality of the local
school district.
Additionally, data indicates
that over the past year, the
typical Massachusetts home
buyer looked at nine homes
over a period of 12 weeks
before purchasing, and that
their new home was located
just nine miles from their
previous residence.
Finally, despite its
reputation as a state with
high housing costs, the
study found that
Massachusetts has attracted
a higher rate of first-time
home buyers into the market
during the past year than
the U.S. as a whole, with 45
percent of all buyers in the
Bay State being first-time
home purchasers compared to
just 36 percent of all U.S.
home buyers.
To view an Executive Summary
of the 2006 Massachusetts
Profile of Home Buyers &
Sellers report or to access
the entire study, visit the
Housing & Research Data
section of marealtor.com
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