Nearly half of real estate agents surveyed by Zillow say the top misconception among aspiring home buyers is that home prices will fall significantly.
However, Zillow's research finds a rapid drop in prices is unlikely. Zillow's home value forecast released last month predicts a flattening of home values over the next year, with prices increasing by 1.3% by September 2023.
Zillow's survey of 506 agents occurred between September and October of this year and was in collaboration with ZG Population Science. More than a third of agents say prospective buyers mistakenly think they should wait for high mortgage rates to come down.
"Buyers may think it's better to wait out the market, but in reality, there is more opportunity in this market than I have seen in the past five years if buyers approach real estate as a long-term investment, " said Michael Perry, an agent who leads The Perry Group in Salt Lake City, Utah. "If prices or mortgage rates take a meaningful dip, all those sidelined buyers will likely come rushing back to the market, driving up competition and prices. If a buyer can purchase today, they have bargaining power, more options and more time to find the right home, instead of being rushed into a purchase they might regret."
With volatile mortgage rates still posing a threat to the market, 44% of agents say the most important action first-time buyers can take is to line up financing before home shopping. More than a quarter of agents say the biggest mistake first-time home buyers make is failing to separate their wants from their needs, and they encourage buyers to make a list of what they want in an ideal home before shopping.
Zillow’s survey noted that buyers do appear to be taking advantage of today's more favorable market, with nearly 3 in 5 agents in the survey reporting buyers are taking more time to consider a home.
Today's buyers are including more contingencies in their offers, such as inspection and appraisal contingencies designed to protect buyers from unexpected costs, according to 43% of survey respondents.
On the other hand, sellers may be holding onto outdated expectations. A majority of agents or 81% say it's a common belief among sellers to expect multiple offers on their home. Another 79% price their homes above market value and 74% of sellers believe there's no need to cut their price.
"Sellers can no longer put a for-sale sign outside their home and expect the offers to pour in," said Koby Sway, an agent with The Briley Team in Omaha, Nebraska. "They have to roll up their sleeves and make necessary repairs and home improvements before listing their home for sale. And it's more important than ever to get the pricing right when competing against other sellers for a smaller pool of buyers."
