SEATTLE--(BUSINESS WIRE)--Homebuyers may need less cash savings than they think to get their offer accepted, according to Redfin (www.redfin.com), the next-generation real estate brokerage. In a survey of more than 750 Redfin real estate agents across the country conducted earlier this month, more than half said the typical down payment for successful buyers in their market was less than 20 percent. One in four said a down payment between 3 and 5 percent was typical among successful buyers. Success with a low down payment is possible even in highly competitive markets. Twenty-two percent of Redfin agents in California--a state notorious for bidding wars and high prices--said their clients were successful with 3 to 5 percent down.
“The conditions that challenged first-time and millennial homebuyers this spring are starting to ease,” said Redfin chief economist Nela Richardson. “There are fewer bidding wars and less of a need to escalate significantly above the list price to get an offer accepted. The pace of the market is also slowing, which helps buyers since they can now afford to be patient. Sellers are getting used to the idea that all-cash buyers and investors have given way to traditional buyers who need financing to purchase a home. They are demanding less from buyers than they were just a few months ago, which means a wider spectrum of buyers and down payments can be successful now.”
When asked what types of advice they gave their clients in the past year, 74 percent of Redfin agents said they had advised buyers to get a fully pre-approved and underwritten loan agreement from their lender prior to making an offer.
“One major piece of advice I always give to sellers is that the highest offer is not necessarily the best,” said Roddy de la Garza, a Redfin real estate agent in Los Angeles. “You have to look at the whole package. If a buyer has a low down payment but comes in with a fully pre-approved and underwritten loan, that’s just as good as cash.”
De la Garza was among the 61 percent of respondents who said they had advised sellers that the highest offer is not necessarily the best.
Redfin agents also advised millennials on taking the first steps toward homeownership:
“Talk to a lender now and become educated on all of your options, even if you don’t think you’re able to buy,” said Tracy Salisbury, a Redfin real estate agent in Seattle. “You might be surprised at the possibilities.”
To read the full report, complete with more advice for millennial homebuyers, please visit the following link: https://www.redfin.com/blog/2016/09/q3-2016-redfin-agent-survey.html.
About the Survey
Redfin’s survey was conducted between Sept. 15 and Sept. 18, and includes responses from 762 real estate agents in 38 states and Washington, D.C.
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About Redfin Corporation
Redfin (www.redfin.com) is the next-generation real estate brokerage, combining its own full-service agents with modern technology to redefine real estate in the customer's favor. Founded by software engineers, Redfin has the country's #1 brokerage website and offers a host of online tools to consumers, including the most accurate home-value estimate online, the Redfin Estimate. Homebuyers and sellers enjoy a full-service, technology-powered experience from Redfin real estate agents, while saving thousands in commissions. Redfin serves more than 80 major metro areas across the U.S. The company has closed more than $31 billion in home sales to date, and saved customers more than $335 million in fees, and counting.
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