NAR Research Study Shows Differences in Services Buyers Choose

10/15/2003

From: Lucien Salvant of the National Association of Realtors, 202-383-1176, lsalvant@realtors.org

WASHINGTON, Oct. 15 -- There are significant differences between first-time homebuyers and repeat buyers in the kinds of real estate services they use, according to a new survey by the National Association of Realtors(r).

The 2003 National Association of Realtors(r) Survey of Real Estate Services also shows that buyer use of real estate services varies with the type of home that's bought, the age of the home, and the frequency of Internet use.

The report reveals that first-time buyers use some real estate services more frequently than repeat buyers do, probably because first-timers are unfamiliar with the home purchase process and have different needs when financing a home. For example, 85 percent of first-timer buyers chose to use the services of a home inspector, compared to 80 percent of repeat buyers.

In searching for homeowners insurance, first-time buyers received multiple rate quotes more frequently (59 percent) than repeat buyers (41 percent). About two-thirds (65 percent) of first-timers used mortgage insurance services, compared to about half (52 percent) of repeat buyers.

The survey was based on an eight-page questionnaire mailed by NAR to more than 35,000 recent homebuyers last spring; 2,703 usable responses were returned. Names and addresses were obtained from Experian, which maintains a database of recent homebuyers derived from county records.

Since most home purchases are financed through a mortgage loan, mortgage lenders were among the most frequently used real estate service providers. Nine out of 10 buyers used a mortgage lender. Other real state services used most often included homeowners insurance, title insurance and appraisers; there was little or no variation between first-time and repeat buyers, because those services are most directly tied to the financing of the home sale.

A little more than one-third (36 percent) of all homebuyers said that the main reason they chose a particular lender was on the recommendation of their real estate agent. Homebuyers relied heavily on their agent's recommendation for home warranty (54 percent), environmental inspections (51 percent), home inspector (51 percent) and pest inspector (50 percent). Buyers typically received mortgage information specific to their home purchase from two lenders.

"REALTORS(r) are the first stop for homebuyers and sellers because of the services we provide. REALTORS(r) do more than sell houses-we are part of the community and knowledgeable about our neighborhoods and the needs of consumers. Homebuyers and sellers want the kind of expertise that REALTORS(r) offer," said Cathy Whatley, NAR president and owner of Buck & Buck Inc., in Jacksonville, Fla.

In other findings, the survey showed that use of real estate services varied by the type of home purchased. New-home purchasers were less likely (41 percent) to have a home inspection, while four out of five buyers of previously owned homes had an inspection. New-home buyers also were far less likely (56 percent) to use a termite inspector than were buyers of previously owned homes (73 percent).

Appraisers also were used by a smaller percentage of new-home purchasers, compared to buyers of previously owned homes. And buyers who used the Internet most intensively in their home search were more likely to use the services of a home inspector.

Copies of the survey will be available October 29, 2003, and can be purchased by calling 800-874-6500 or going to http://www.realtor.org, and asking for product No. 186-60-03. Cost is $50 for NAR members and $75 for non-members.

The National Association of Realtors(r), "The Voice for Real Estate," is America's largest trade association, representing more than 950,000 members involved in all aspects of the residential and commercial real estate industries.

Information about NAR is available at http://realtor.org. This and other news releases are posted in the Web site's "News Media" section.

REALTOR(r) is a registered collective membership mark which may be used only by real estate professionals who are members of the NATIONAL ASSOCIATION OF REALTORS(r) and subscribe to its strict Code of Ethics.