Buying a house is often the largest financial decision people make in their lives, which means it’s not something they take lightly.
That’s why it’s so important for industry-leading real estate brokerages like Redfin to have a spot-on understanding of what consumers truly want.
How are people buying homes? Why are they buying them? How’s the market changing with the addition of variables like technology? And perhaps, most important: What do customers think of Redfin and other alternatives to the traditional brokerage model?
The answers to these types of questions tell us a lot about the current state of real estate, which has been the focus of a lot of attention from both Wall Street and Silicon Valley. They also help Redfin, the next-generation real estate brokerage and SurveyMonkey customer, understand the needs of consumers in order to serve them better.
To get these answers, Redfin commissioned SurveyMonkey Audience to survey to 2,134 people who had bought or sold homes in the past two years to ask them about their experience. Of the respondents, 84 had used Redfin.
The survey uncovered valuable insights on the state of the real estate industry, as well as a ton of surprising trends in the attitudes and behaviors among today’s homebuyers and sellers. Curious? Here are four cool things we learned about the real estate landscape in 2015:
1. Technology is changing the game
You might not think of real estate when you think of technology, but consider this: Of the survey respondents, 21% said they made an offer on a house without ever having seen it in person. That’s a testament to the proliferation of online listings, mobile real estate apps, and cool things like 3D scans that take you inside and through every room of a home for sale online.
The trend was slightly more common in millennials, 30% of whom said they made an offer without seeing the house in person. Even more striking was that 53% of buyers who paid more than $750,000 for their home made offers without seeing the house first.
With so many people relying only on information they find online before offering on a home, choosing a website with complete, up-to-date information is critical to today’s home search. 62% of Redfin users said they were “very confident” that Redfin.com promptly showed all the homes for sale, compared with 51% of Realtor.com users, 44% of Zillow users, 44% of Trulia users who said the same for those sites. (Note: This sample excludes respondents who said they worked with a Redfin agent to buy or sell.)
Seventeen percent of people who bought a home in the past two years did so without an agent. That’s substantially higher than the most widely cited number, which reports that just 12% of buyers in 2014 purchased without an agent. Among people who bought without an agent, 37% said they didn’t need one because they knew the seller personally.
While technology hasn’t erased the need for real estate agents, respondents indicated that they’re open to new ways of doing things. Sixty-four percent of respondents said they are open to an alternative to the traditional real estate service, while just 21% prefer the way traditional agents work.
Fifty-eight percent of buyers said their agent was an advocate for them to buy the right home, not just any home, and 62% of sellers said their agent fought as hard as he/she could to negotiate a good deal for them.
Meanwhile, 71 % percent of people who bought or sold a home with Redfin would recommend their agent to a friend or colleague, compared with 49% of people who bought or sold a home with agents at other brokerages. (Note: To ensure confidence in this result, SurveyMonkey sent the survey to a random list of past Redfin customers to reach an additional 119 respondents via SurveyMonkey Email Collector, for a total of 203 people who had used Redfin to buy or sell a home.)
The survey offers an insight for the first time into discounting (which isn’t accounted for in closing documents, the commissions advertised in Multiple Listing Services, or in Realtor-sponsored surveys) and found that it is more widespread than many realized. While the official fees paid by consumers has by other accounts been very stable over the past decade, this survey shows that more than a third of consumers are now receiving refunds or other forms of commission savings worth $500 or more from their agent.
2. Millennial homebuyers value stability — no, really
What do millennials prioritize in a neighborhood? Craft breweries and climbing walls? A good place to Instagram their artisanal toast?
It might surprise you that the survey found their top neighborhood priorities were safe, affordable neighborhoods with good schools.
In fact, millennials were among the most likely to select a neighborhood for its schools, tying with buyers with a household income of $125,000 or higher and just behind buyers under 45. They were also slightly more likely than other groups to list safety as a priority for their neighborhood.
3. Urban lifestyles aren’t for most people
Even after safety and affordability were taken care of, being able to get around easily and/or without a car was not high on buyers’ list of considerations. Just 11% named walkability and 8% named access to public transportation as things they cared about having in their neighborhood.
Millennials were only slightly more likely than the general population of buyers to name those considerations, with 13% naming walkability and 12% citing access to public transportation.
Living in an affordable neighborhood was a high priority for millennials, but not as high as it was for homebuyers who purchased a house for $250,000 or less. Sixty-one percent of that group cited affordability as a main priority, while 44% of millennials did. Much fewer –29%– of those with household incomes of more than $125,000 listed affordability as a priority.
4. First-timers cite practical reasons for buying instead of renting
First-time buyers weren’t investing in the housing market just to make their families proud. Only 35% said they bought instead of rented in order to achieve the American Dream of homeownership. Instead, first-time homebuyers had pretty practical reasons for buying a house. 58% said they bought a home for a sense of stability and permanence and 43% said they bought a home to have a safe place to invest their money and wealth.
Even as brokerages like Redfin take alternative approaches to how the business of real estate is conducted, not everything in the industry is changing quickly. Redfin’s survey results show Americans — even those confounded youngsters — still value and prioritize familiar things when buying a house.
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