Survey Reveals Aggressive Tactics Worried Buyers Are Willing to Use
Survey Reveals ‘Aggressive’ Tactics Worried Buyers Are Willing to Use
07/26/2013 By: Esther Cho
Low inventory coupled with rising mortgage rates and home prices are leading prospective buyers to consider using “aggressive” tactics such as overbidding to obtain a home, according to recent survey from Trulia.
In order to secure the desired home, 25 percent of prospective buyers in the survey said they were willing to bid 1 to 5 percent above the seller’s asking prices.
“Although buying a home is still much cheaper than renting, it’s a stressful time to be a homebuyer,” said Jed Kolko, Trulia’s chief economist. “Consumers are worried that mortgage rates and prices will keep rising before they buy, and many are willing to fight over the limited number of homes for sale”
When it came to overbidding, younger buyers (aged 18 to 34) are more likely to use the strategy.
According to Kolko, Millennials are “more willing than their parents’ generation to outbid, borrow, or make a personal plea to get the house they want.”
For example, another 9 percent of respondents said they were willing to bid 6 to 10 percent over the asking prices, while 12 percent of younger respondents said the same.
Just 4 percent said they were willing to go 10 percent above the asking prices, while 7 percent of younger respondents were willing to go to that length.
Twenty-five percent of respondents also said they were willing to pay for the seller’s closing costs to get the home they want, though for Millennials, the share was 30 percent.
Additionally, the survey showed 17 percent of buyers would write a personal letter to the seller, while 23 percent of Millennials said the same.
The survey, conducted by Harris Interactive, also examined top worries and found rising mortgage rates weighed on the minds of 41 percent of potential buyers.
Another 37 percent cited rising home prices as the top concern, while 36 percent said they were worried about not finding a home for sale they would like.
Other worries in the top five were concerns of not qualifying for a mortgage (30 percent) and competing with many other buyers (27 percent).