JD Power Finds 56% of Home Buyers are First-Timers
Service extras became increasingly important to both home buyers and sellers as first-time buyers took the majority of the home buyer population in the last year, according to JD Power and Associates' 2009 survey of both parties in the home selling process. The importance of added services like inspections, appraisals and legal and moving company recommendations has increased in both processes since last year's survey -- up by 12% among buyers and by 8% among sellers -- although the agent remains the most important driver for both segments. "In a tight market, every aspect of service offered will be scrutinized very closely," said Jim Howland, senior director of the real estate and construction practice at JD Power. "For this reason, it is critical for real estate companies to promote the value that they bring to buyers and sellers, not only in any additional services they offer, but also in their agents and operations." The study also found that the proportion of first-time home buyers increased considerably -- to 56% in 2009 from 44% in 2008. Many of these first-time buyers may be attracted by improved home affordability and the perception of a strong buyer's market. This presents both challenges and opportunities for real estate companies, JD Power said in its survey. "The presence of more first-time buyers is encouraging, as it indicates that the real estate market is returning to more normal activity, with fewer speculators," Howland said. "However, real estate companies and agents must carefully manage first-time buyer expectations. Although these buyers may believe otherwise, they must still overcome the traditional barriers to purchasing a home, such as being able to fund down payments, closing costs and monthly payments." Now in its second year, the JD Power study includes more than 3,100 evaluations from 2,801 respondents that bought or sold between April 2007 and June 2008. JD Power, a business unit of The McGraw-Hill Companies (MHP), examines the agent, office and package of additional services when determining satisfaction in the buying experience. It examines marketing in addition to these categories when determining satisfaction in the selling experience. Write to Diana Golobay.