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Inside the WRA
Inside the WRA with Bill Malkasian
 In April the WRA conducted focus groups as part of the WRA strategic planning process for the upcoming fiscal year. More than 75 real estate professionals from five different market areas (Chippewa Falls, Stevens Point, Appleton, Madison and Milwaukee) participated in the discussion about challenges and trends in the real estate market today.
The WRA also worked with the National Association of REALTORSŪ and purchased an overview of a Wisconsin consumer satisfaction survey. The survey results were distributed to the focus group participants. The executive summary of the survey is below.
Homebuyer Demographics:
- 53.6 percent of buyers were first-time buyers, compared to 42 percent of all buyers nationwide in 2001
- The median age of buyers was 38 years, the median for first-time buyers was 31 years
- Married couple families accounted for 50 percent of all buyers, single women comprised 24 percent, the remaining were single men or unmarried couples
- 56 percent of buyer-households had two earners, 43 percent had one
- The majority of buyers had no children (56 percent)
- The median income for all buyer-households was $57,500; among first-time buyers, the median income was $55,000
- Before buying their home, 52 percent had rented, 40 percent had owned a previous home, and six percent had lived with their parents
- Roughly half of all buyers reported that their primary motivation for purchasing a home was "desire to own my own home," 21 percent wanted a larger home, and six percent wanted to be closer to their workplace, school or family members
Profile of the homes purchased
- 13 percent bought a new home, 87 percent bought a previously owned home
- Median price of homes purchased was $137,000-$122,000 for first-timers, $170,000 for repeat buyers
- The typical house cost the buyer $100 per square foot-first-timers spent $96, repeat buyers spent $111
- Roughly 55 percent bought in a suburban area, 35 percent in an urban area, and 10 percent were in small towns or rural areas
- Most buyers purchased a detached, single family home (73 percent), 11 percent bought apartments/condos in multifamily structures, and 11 percent bought apartments/condos in 2-4 family structures
- 76 percent reported that a primary reason that they chose the location where they bought was "the neighborhood", 46 percent reported that they wanted to be close their workplace/school, 24 percent wanted to be near parks/recreation areas, 22 percent wanted to be near particular schools
- The typical buyer bought their home 7.5 miles from their previous home; first-time homebuyers moved 7.2 miles, repeat buyers moved 7.8 miles
- Nearly 25 percent of buyers compromised on the size of the house they had planned to purchased in choosing the home they did; 20 percent compromised on the condition of the house; buyers were least likely to compromise on neighborhood quality and their budget
Search Process
- The typical buyer walked through nine homes and searched for eight weeks before finding the home they ultimately purchased
- Buyers most relied upon real estate agents, newspaper advertisements and the Internet for information
- 40 percent first found out about the home they purchased through an agent, 21 percent saw a yard sign, 13 saw an ad in the newspaper, and 11 percent found it on the Internet
- 73 percent bought their home through an agent, 15 percent bought directly from the owner, six percent bought directly from a friend, six percent bought from a builder
- 82 percent reported that agents were either "very useful" or "somewhat useful" in their home search, the Internet and yard signs were the next most useful sources of information at 69 percent each
- 46 percent frequently used the internet during their search, 25 percent used it occasionally, 28 percent did not use the internet at all
- Internet users were typically searching home listings or looking for detailed property information
Homebuying: the role of real estate professionals
- Among buyers who used an agent, 68 percent chose the first agent they contacted
- 77 percent of buyers who used an agent used only one agent during their search; 16 percent used two agents
- Buyers who used agents saw more homes; the buyers saw 10 homes in eight weeks before buying, buyers without agents saw seven homes in six weeks before buying
- Buyers with agents typically searched for homes on their on for 2 weeks before contacting an agent
- 46 percent of buyers with agents found their agent through a referral from a friend, neighbor or relative, 12 percent met their agent at an open house, 11 percent had used agent previously
- The most important factor in choosing an agent was the reputation of the agent, the second most important factor was the agent's knowledge of the neighborhood where the buyer was looking, eight percent of these buyers chose their agent because of the agent's association with a particular firm
- The most important skills an agent can have are knowledge of the purchase process, knowledge of the market, and a quick response to questions and concerns from buyers.
- The number one task that buyers wanted their agent to perform was "help with finding the right home," also important were pricing comparable houses and helping with paperwork
- 55 percent of all buyers used a buyer representative who represented them and not the seller. Two-thirds of these buyers had a written agreement with their representative, one-third had an oral agreement
- Nearly half of all buyers who bought through an agent signed a disclosure statement with the agent either at their first meeting or when they first wrote a contract on a home
- Roughly 54 percent of agent were paid by sellers, one-fourth were paid by the buyer as a percentage of the sales price
- Buyers were generally satisfied with all aspects of their agents, however they were most likely to be less than "very satisfied" with their agent's technology skills and negotiation skills
- Nearly half of all buyers with agents said that their agents pointed out missed features/faults in homes, roughly one-fourth reported that their agent helped to improve their knowledge of the search area, and one-fourth reported that their agent helped negotiate better contract terms
- 62 percent reported that they would definitely use third agent again, 25 percent said they would consider using the agent again, 12 percent indicated that they would either probably or definitely not use their agent again
Homebuyers: Financing the home purchase
- 93 percent of buyers used a mortgage
- The typical buyer financed 83 percent of the purchase price of their home
- The most popular sources for down payment funds was savings, also used frequently were equity from a previous home, gifts from family, or the sale of stocks
Home sellers: Their homes and selling experience
- Three-quarters of home sellers sold a detached, single family home
- Nearly fifty percent of homes that were sold were located in a suburb, 37 percent were in an urban area
- The typical home seller owned the home for nine years
- 17 percent of home sellers were selling their first home, 43 percent were selling their second home
- 76 percent sold their homes using an agent, 19 percent sold it themselves
- Five percent sold their home to someone they knew prior to the sale
- The typical home seller sold their home for $159,000 and then purchased a home for $170,000
- The median number of weeks on the market was four
Home selling and real estate professionals
- 77 percent of sellers listed their home with the first agent they contacted
- Median number of weeks on market for agent-assisted sales was five
- 53 percent used the same agent to buy their new home
- One-third first found their agent by a referral from a friend or family member, 22 percent had used the agent previously, 14 percent had been contacted by the agent, and 10 percent met their agent at an open house
- The most important factor in the choice of an agent was the reputation of the agent, also mentioned frequently were the agent's knowledge of the neighborhood and the agent's firm affiliation
- The number one task that sellers wanted their agent to perform was to "help me price the home competitively" also important were help with finding a buyer and help with selling the home in the seller's timeframe
- The marketing tools most used by agents of sellers included yard signs, open houses, newspaper ads and internet listings
- 83 percent of the homes were listed on an MLS
- 75 percent reported that they would definitely use the same agent in their next sale or recommend the agent to a friend, 14 percent said they might
Home selling: For Sale By Owner
- 19 percent of all sales were FSBOs
- Half of all FSBO sellers say they would sell their next home by themselves, the rest would use an agent or were unsure
Information received from each focus group along with results of the consumer survey will be incorporated into a final document to be discussed at the May 9 Board of Directors meeting. Recommendations from the Board will be incorporated into the 2003-04 Operating Budget.
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Nominate Someone for the Distinguished Service Award
The Wisconsin REALTORSŪ Association benefits from the commitment and dedication of its members and employees. It also benefits from the efforts of others that share similar objectives and render significant service to the WRA and the real estate industry in Wisconsin. The WRA believes that the marketplace amply rewards those practitioners who provide exemplary service to customers and clients. Therefore, the we choose to recognize leadership and distinguished service to the association and industry.
All current members, local association executives and employees of the Wisconsin
REALTORSŪ Association with at least 10 years membership or employment are eligible. Application deadline is June 13, 2003.
Applications are available online at: www.wra.org/inside_wra/DSA_criteria.htm.
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