A 20 Percent Down Payment is Not Necessary for Home-Buying Success in Today’s Easing Market, According to Redfin Agents
Redfin Agents Offer Advice to Millennials, Who are Poised to Take
the First Steps Toward Homeownership
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.
For more information or to contact a local Redfin real estate agent,
visit www.redfin.com.
To learn about housing market trends and download data, visit the Redfin
Data Center.
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Contacts
Redfin Journalist Services:
Jeffery Marino, 206-588-6863
press@redfin.com
