10 conversation starters and scripts to win sellers this spring

Bigger. Better. Bolder. Inman Connect is heading to San Diego. Join thousands of real estate pros, connect with the Inman Community, and gain insights from hundreds of leading minds shaping the industry. If you’re ready to grow your business and invest in yourself, this is where you need to be. Go BIG in San Diego!

Any challenge to winning over sellers can be overcome through competent conversation that  includes, above all, seller participation. Great questions and deep listening enable sellers to make educated choices and have ownership of their goals. Real-world examples with risks and consequences demonstrate value, instill trust and help create a true “partnership” relationship. 

The conversation starters below do more than get you started. They are lessons in seller conversion through probing questions, knowledge sharing and mutual decision-making.

1. Know the market. Be the expert. A metaphor will help sellers understand

By the time a shift in the market is noted by the media, it’s old news to the real estate industry. Agents need to be the market analysts, not the media. Let sellers know that you are the holder of the information and can help them leverage real news in real time.

Agent to seller: “When we track a town’s supply and demand, we know when shifts in the market favor the buyer or the seller. A two-month supply of homes in [town] signals a seller’s market. It takes only two months to empty the shelf. However, changes in supply and demand can swing leverage in the opposite direction. Let’s discuss steps to win in this market.”

For a simple calculation of the month’s supply of inventory, divide the supply (homes for sale) by the current demand (the last 30 days of pending, not closed, sales).

Example: If there are 100 homes for sale, and 50 under contract/pending sales in the last 30 days, it takes two months to empty the shelf. Track every 30 days to see emerging trends.

2. Probing questions lead and guide seller discussions. Neighborhood news helps

Offer your SOI a review of the equity in their neighborhood, quarterly or annually. Meet or drop off a simple “MLS one-liner” of all activity in the area. If it’s simple and on one page, it will be shared with neighbors, becoming a big source of referrals. Follow up with probing “what ifs.”

Agent to seller:

  • “Everyone benefits from knowing the equity in their neighborhood and where prices are headed. I have a print-out of activity in your area that I’d like to drop off.”
  • “Hey, have you heard the news about the sales price of 123 Main?” 
  • “Consider me a resource to help guide your future lifestyle plans.”
  • “If you could change anything about your home, what would it be?”
  • “What’s your long-term goal for your home: Keep, sell, rent or renovate it to suit a future need?”

3. Is their house ready to sell?  Help sellers see their home through buyers’ eyes

Asking sellers about the condition of their home is a delicate task. But because everyone understands what a “model home” looks like, switch up your ask to help them visualize how problem-solving fixes, with you as their guide, can increase the value of their home.

Agent to seller:

“Because there are steps in preparing a home for sale for a return investment, looking at a home through buyers’ eyes provides a clear perspective on whether a house is ready to sell.”

    • On a scale of 1 to 10, how would you rate your home’s condition? Model Home = 10. Poor Condition = 1.
    • What would it take for your home to be a 10?
    • What steps do you need guidance with?
    • What resources can I provide to help you through the initial process?

4. It’s not your marketing, not your personality, not your price

Losing a competitive listing can leave an agent in the dark. Of course, the seller liked you and your stellar marketing and maybe even your price. Differentiation in a consultative appointment is the key to hireability. To stand out, educate the seller on the three things that pay them a premium. They’ll listen!

Agent to seller: “The most crucial factor in selling a home is the collaboration between seller and agent on three key decisions that pay a seller a premium: pricing, condition and negotiation. While marketing capabilities are standard across the industry, educating a seller to critical choices on pricing, prepping the home, and complex negotiation when hearing offers are the benchmarks of a great proposal. Let’s discuss how to avoid leaving money on the table.”

5. Pricing choices that pay a seller a premium (in a 15-second elevator speech)

Providing sellers with critical decisions on goal-targeted pricing and having them choose is the consultative part of a “pre-marketing” process. Educate, don’t advise.

Agent to seller:

“There are 3 ways to price a house for sale — goal-targeted choices with risks and consequences:

    • Right-pricing, based on comparable sales, adds as much as a 5 percent premium to the sales price
    • Bidding/auction pricing, somewhat risky, is set low to stir up competition
    • Retail pricing, with a built-in price cushion in place, encourages lowball offers and a later sale. Which one works for you?”

6. Beware the escalation clause! Buyer opportunity. Seller risk. Pro-offer options

Educate sellers on the often-misconstrued escalation clause. Not understanding this buyer strategy can leave money on the table. Understanding it can give sellers the upper hand.

Agent to seller: “Without a clear understanding, the escalation clause in an offer can look like a win for the seller, but it’s actually a buyer attempting to buy a home at the lowest price, offering to beat competing offers by an ‘escalated’ amount up to ‘a maximum price’ — the highest the buyer ‘would pay.’ Accepting the escalated offer on its terms is leaving money on the table. A true win for the seller, by the buyer ‘revealing his hand,’ is to counteroffer the buyer’s maximum he would pay, or counter ‘highest and best’ to all competing offers.”

7. The powerful message of the ROI of staging: Help sellers debunk common myths

It’s easy for sellers not to hear the message an unstaged home is sending to buyers. Help sellers separate “myth from reality” to capitalize on staging and sell for a premium.

Agent to seller: “The ROI stats are clear. Staged homes sell higher than unstaged homes. It’s common to question, ‘Why stage?’ because buyers ‘will want to change it’ anyway. Actually, buyers want to immediately fall in love with ‘their’ home, not ‘the seller’s’; have little vision and fewer resources; and can’t translate vacant or unstaged rooms to extra value and more space. Whether DIY or full staging, a home will sell for a premium and with fewer showing days on the market.”

8. Buy before sell? Sell before buy? Provide choices, not answers. Let them decide

It’s not about “what you would do” when the seller asks for advice on this critical timing issue. Answer the question with content; respond as the resource all agents should be.

Agent to seller:

“There is no one universal answer when selling and buying. There are actually five options to consider. It becomes a matter of personal choice. Each comes with consequences. Decide which one works best for you.”  

    • Put your house on the market; sell it with a 60-day Use and Occupancy Agreement, giving you about 120 days or more for a home search and relieving some of the pressure to find a home. 
    • Find the house first; make an offer contingent on selling your home — an ideal option for you, except for the weak negotiating position. 
    • Put your house on the market; close, then find temporary housing. It’s a short-term option to decide your next move and the best negotiating position, but it’s inconvenient to move twice. 
    • Secure a bridge loan to buy a home with equity from your existing home; repay it with proceeds from the sale of your house, also relieving pressure when buying before selling. 
    • Keep your house, and rent it as part of an investment plan. I can guide you on that.

9. Carpe diem! Help sellers seize the deal. They decide how offers are heard

Too often, Realtors buy into “this is how we do it” when hearing offers. But negotiating isn’t a procedure. It’s a strategy based on what is on the table, with varying sets of buyer circumstances and seller goals.

Stop. Look. Listen. Then consult with the seller on the ways a negotiation can be handled. The seller decides the when and the how.

Agent to seller: When an open house is swarming with potential buyers, what happens next can prompt sellers on when to accept a deal. Although there are commonly accepted ways of hearing offers in most markets, it comes down to choice. Some sellers in some scenarios wait to respond to an offer until an artificial deadline is set to amass other offers, while some sellers in other scenarios seriously consider the early offer, submitted to wow the seller, demonstrate urgency and align fast action to buyer commitment. Negotiating guidelines are just that, meant to help, but skilled negotiating is brainstorming options despite local practices.”

10. A seller’s wishlist is a clear path to getting it all. Provide buyers a visual

When a seller-agent guides buyer-agents with a seller’s wishlist in a competitive selling environment, it’s a win for both sides, facilitates targeted communication to address seller goals and curates the best offer by the buyer for the seller!

Agent to seller: “When sellers dwell on how to score the best deal among several offers in a seller’s market, they need only to name their terms. As seller agent, I commonly share the seller’s wishlist, in collaboration with the seller, with buyer agents preparing an offer. Here’s a sample of items I can include:” 

    • Highest price with best terms and fewest contingencies
    • 60-day closing with 60-day Use and Occupancy 
    • Appraisal waiver for offers above list with proof of funds for deposit and appraisal gap
    • Total deposit due on Day 1 after all parties have signed the contract
    • Limit home inspection to major structural, environmental and mechanical issues
    • Consider waiving a specific dollar amount toward inspection concessions
    • Home inspection within three to five days after all parties have signed the contract
    • Add to contract [example]: chimney, fireplace, flue in As Is Condition.
    • Add the following personal property items excluded from sale: _____
    • Sellers will look favorably on a pre-approval from the preferred lender: _____
    • Provide buyer’s attorney information upon submission of offer.

Winning over sellers is a misnomer. It’s really about earning seller relationships when mastering the art of information communication. Markets change. Even repeat sellers want to know what they may not know.

When coached by a knowledgeable agent, sellers become holders of the information. This seals a bond between seller and agent, leads to effective decision-making, without remorse or regret, and is a platform for referrals

Annette DeCicco is a real estate broker and director of growth and development at Berkshire Hathaway HomeServices Jordan Baris Realty in Northern New Jersey. 

This post was originally published on this site

10 conversion scripts for winning buyers over this spring

Bigger. Better. Bolder. Inman Connect is heading to San Diego. Join thousands of real estate pros, connect with the Inman Community, and gain insights from hundreds of leading minds shaping the industry. If you’re ready to grow your business and invest in yourself, this is where you need to be. Go BIG in San Diego!

Any challenge to winning over buyers starts with competent conversations and an information process that highlights your value, instills trust and steadily moves you to a client relationship. When an agent routinely controls an informational process, it enables the buyer with newfound confidence to take critical steps toward decision-making. 

The conversations below do more than get you started. They are lessons in buyer conversion, and above all, in effective information communication.

1. Know the buyers’ whats and whys

An example will help them zero in on why:

Agent to buyer: “Most buyers shop their whats but buy their whys. Without a ‘what and why list, you could be missing out. Whats are physical; whys are benefits. For example, ‘What’ I want is a house on a golf course; ‘Why’ I want it may not be to play golf; it may be for privacy or a view. If I find a property to fit your ‘why’ — something you can get really excited about that’s not on your ‘what’ list — would you want to know about it?”

2. Know the market. Be the expert

A metaphor will help buyers understand:

Agent to buyer: “When we track a town’s supply and demand, we know when the market shifts, and we know how to leverage it in your favor. A two-month supply of homes for sale in [name of town] translates to a swift seller’s market. Simply put, it takes only ‘two months to empty the shelf.’ Let’s discuss those leverage strategies …”

For a simple calculation of months’ supply of inventory, divide the supply (number of homes for sale) by the current demand (the last 30 days of under contract / pending sales) to accurately measure market shifts. Do it monthly to track shifts.

For example, if there are 100 homes for sale, and 50 under contract in the past 30 days, it takes two months to empty the shelf.

3. Provide a 3-pronged plan

Buyers don’t want to miss out. Show them how you’ll find listings hiding in plain sight.

Agent to buyer – “When supplies are low, it’s easy to overlook listings that aren’t new to the market, the hidden gems. Let’s make sure you don’t miss out on anything with these three strategies to uncover and secure the property you want!”

The hidden bargain: These are a chance to bid alone on the overpriced house that has been on the market a month or more. Offer less than asking but reflect the home’s value.

Lower your sights: To have a chance at winning in multiple offer situations, leave room to make a higher bid on a home listed for less than what you planned on spending.

For-sale-by-owner: In a less competitive environment, FSBOs usually cooperate with buyer-agents, especially when the buyer pays the fee.

4. Help buyers with a practice contract

Practicing relieves decision-making anxiety.

Agent to buyer: “A think-it-through strategy works better than a think-it-over strategy, and avoids losing a house in a fast market. We can sketch out a draft of an offer with five decision points: price, terms, dates, inclusions/exclusions and contingencies. You can always make changes after I call the listing agent. Then it’s your choice to act now if there are offers, or see the house again tomorrow if there’s a low risk of losing the house tonight.”

5. When it comes to making an offer, advise, don’t provide

Figuring out your buyer’s walk value will help relieve regret and remorse.

Agent to buyer: “How much should I offer is the most commonly asked question, especially in a sealed bid scenario. When you predetermine your walk value, it relieves the should-haves because you set the highest price you would pay or ‘walk away.’ It signals the end. If you win the bid, a walk value relieves the shouldn’t-haves because you set the price high, despite access to what else was on the table.”

6. Help buyers search with a solutions sheet

A dream home is only in buyers’ dreams, so it’s crucial to help them get realistic.

Agent to buyer: “When a home doesn’t check all the boxes, it’s because no home is perfect. It’s easy to pass up on the right one, especially when the housing supply is limited. A solutions sheet can help. Give each home a ranking based on most and least desirable features; add in reasonable cost-solutions. Then, reconsider the rank. If reasonable solutions allow you to check more boxes, you may have found your home.”

7. Help buyers rank their choices

Buyer motivation is relative. The universally accepted 1 to 10 rating scale will help.

Agent to buyer: “Seeing the big picture helps to gauge when you’re ready, willing and able to act on the right house when you find it. On a big picture scale of 1 to 10, where do you see yourself in the homebuying process? One means you are new to this; 10 means you are highly ready to buy now. What would have to happen to make it a 10? I can help. Here are the steps you can take … ”

8. Lay out options to help buyers figure out their next move

Buy before sell? Sell before buy? The best advice is to provide choices, not answers.

Agent to buyer: “There are 5 options when selling and buying, each with consequences:”  

    • Put your house on the market; sell it with a 60-day Use and Occupancy Agreement, giving you about 120 days, or more, for a home search, relieving some of the pressure to find a home.
    • Find the house first; make an offer contingent on selling your home, an ideal option for you, except for the weak negotiating position.
    • Put your house on the market, close, then find temporary housing, a short-term option to decide your next move, and the best negotiating position, but it’s inconvenient to move twice.
    • Secure a bridge loan to buy a home with the equity from your existing home, repaid with proceeds from the sale of your house, another option to relieve pressure when buying before selling.
    • Keep your house, and rent it as part of an investment plan.

9. Carpe diem! Help buyers seize the house by pushing through boundaries

Don’t let your buyers miss out on opportunities that are right for them.

Agent to buyer: When the open house is swarming with potential buyers, opportunity knocks quickly and fades just as fast. Some buyers hold their offer because of an artificial deadline set to amass offers. Other buyers feel their best shot is to break from the crowd, submit an early offer, wow the seller, knowing that the first offer is the best offer, demonstrating urgency and aligning fast action to commitment.”

10. Show your buyers the best path for getting results

The seller’s wish list is the buyer’s clear path. Provide buyers with a visual.

Agent to buyer: “Compelling terms in an offer is the surest strategy besides price to win over the seller, especially in multiple offers. The sampling below is what some listing agents present to buyer agents”: 

    • Highest price with best terms and fewest contingencies
    • 60-day closing with 60-day Use and Occupancy 
    • Appraisal waiver for offers above list with proof of funds for deposit and appraisal gap
    • Total deposit due on Day 1 after all parties have signed the contract
    • Limit home inspection to major structural, environmental and mechanical issues
    • Consider waiving a specific dollar amount towards inspection concessions
    • Home inspection within three to five days after all parties have signed the contract
    • Add to contract (example) chimney, fireplace, flue in as-is condition
    • Add the following personal property items excluded from sale: _____
    • Sellers will look favorably on a pre-approval from a preferred lender
    • Provide the buyer’s attorney information upon submission of offer

Winning over buyers is a misnomer. Earning buyers is what practiced agents do when they’ve mastered the art of information communication. Buyers desperately want to know what they do not know.

When coached by an agent with an information process, buyers become holders of the information. It seals a bond between buyer and agent, leads to effective decisions and promotes referrals. 

Annette DeCicco is a real estate broker and director of growth and development at Berkshire Hathaway HomeServices Jordan Baris Realty in Northern New Jersey. 

This post was originally published on this site

Are you coachable? 6 questions to ask yourself before taking the leap

Whether it’s refining your business model, mastering new technologies, or discovering strategies to capitalize on the next market surge, Inman Connect New York will prepare you to take bold steps forward. The Next Chapter is about to begin. Be part of it. Join us and thousands of real estate leaders Jan. 22-24, 2025.

Real estate is a fast-paced, dynamic and ever-evolving industry. To be sustainable, successful and resilient requires personal and professional growth.

Ask most successful agents and you’ll discover that being coached is one of the ways they stay on top of their game in business and in life. Maybe you’re ready to hit your next level by signing up with your next coach, or perhaps you’re considering investing in coaching for the first time.

Whether you’ve participated in countless programs over the years or you’re a coaching newbie, before you sign up for coaching help, there’s one crucial question you need to ask: Am I truly coachable?

A desire to improve and grow does not automatically make you “coachable.” Being coachable requires a willingness to be open, vulnerable and ready to embrace change. If you’re not fully prepared to dive into the coaching process, you might find yourself resistant to the very guidance you’re seeking as well as wasting your time, money and energy.

To ensure that you’re ready to maximize your coaching experience, here are three essential questions to ask yourself before making the commitment.

Am I open to feedback and new perspectives?

Real estate professionals often pride themselves on their expertise and experience. But when you’re seeking growth, it’s important to recognize that your current knowledge may have limitations. Are you willing to listen to feedback that may challenge your existing beliefs or strategies?

A coach might suggest a new method that feels uncomfortable or counterintuitive. If you’re not open to trying this new approach or willing to get out of your comfort zone, you could miss out on an opportunity to significantly boost your sales and client satisfaction.

Self-Check: Reflect on how you typically respond when someone offers you constructive criticism or a new way of doing things. Do you embrace it, or do you find yourself getting defensive or dismissive? 

Am I ready for change?

Coaching is about transformation. Are you prepared to embrace the changes that coaching may require? This means being flexible in your beliefs and open to new ways of thinking. If you believe that you are always right, and nobody else can guide you, then the coaching won’t work for you.

Self-Check: Ask yourself if you’re truly open to change, even if it challenges your current mindset. Being coachable means being ready for both positive and negative feedback and being willing to adjust your approach accordingly.

Am I goal-oriented?

You must have an idea of specific goals you want to achieve. A coach can help you ensure that you have identified the correct goals, prioritize them, and break them down into manageable subgoals. They can also help you develop a plan to achieve these goals within an agreed period and track your progress.

Self-Check: Consider whether you have clear goals in mind and if you’re open to refining them with your coach’s guidance. If you’re not clear on your goals, or if you’re not willing to work on defining them, coaching may not be as effective.

Am I willing to take action and implement changes?

Coaching isn’t just about gaining insights; it’s about taking action. Are you prepared to step out of your comfort zone and implement the changes your coach suggests?

Example: Let’s say your coach identifies that your time management skills are holding you back from closing more deals. They provide you with a structured daily routine to follow. If you’re resistant to changing your current habits, no matter how busy or chaotic your day feels, the coaching won’t yield the results you’re looking for.

Self-Check: Consider your history of making changes in your business or life. Are you someone who follows through on new strategies, or do you tend to revert to your old ways when things get tough? Most importantly, are you willing to follow through with the actions that will allow you to meet or surpass your goals and drive your results?

Being honest with yourself here is key to understanding your readiness for coaching.

Am I committed to the process, even when it gets uncomfortable?

The coaching journey can be transformative, but it can also be challenging. Growth often involves facing uncomfortable truths and working through difficult situations. Are you ready to commit to the process, even when it feels tough?

Example: During a coaching session, you might uncover a mindset block that’s been holding you back — like a fear of rejection that’s been preventing you from pursuing high-value clients. Addressing this fear might require you to dig deep and confront emotions you’d rather avoid. But doing so is necessary for your growth.

Self-Check: Ask yourself if you’re truly ready to engage with the process, even when it becomes emotionally or mentally taxing. Being coachable means you’re ready to commit and follow through consistently. Success in coaching often depends on your ability to persevere through challenging and confronting moments.

Am I ready to invest time and energy into my growth?

Coaching requires a significant investment of both time, energy and money. You must be ready to dedicate time for regular meetings with your coach and fulfill all the commitments made during these sessions. Additionally, consider the financial investment. An investment in coaching can go a long way in driving your growth, but you must be prepared to make this commitment.

Self-Check: Are you willing to prioritize your coaching sessions and allocate the necessary resources? If you’re not prepared to invest both time and money, you may not be ready for the coaching process.

Preparing yourself for a successful coaching experience

Before you sign up for a coach, it’s crucial to check in with yourself and honestly assess your readiness. By asking yourself if you’re open to feedback, willing to take action, and committed to the process, you can determine whether you’re truly coachable. This self-awareness not only increases your likelihood of showing up fully for the coaching experience but also boosts your chances of achieving—or even surpassing—the results and goals you desire.

Being coachable isn’t just about wanting change; it’s about being prepared to make it happen. If you can answer these questions with a resounding “yes,” you’re likely ready to embark on a coaching journey to transform your business and life in ways you never imagined.

Melanie C. Klein, M.A. and Emily Bossert are highly sought-after coaches known for empowering individuals and teams to achieve their full potential and success.

Compass recruits Douglas Elliman agent, industry vet to Palm Beach

At Compass, Thor Brown will serve as director of luxury sales, while Sam Fingold will take on the role of luxury real estate advisor, according to South Florida Agent Magazine. Both will operate out of Compass’ Palm Beach Island office at 150 Worth Avenue.

Whether it’s refining your business model, mastering new technologies, or discovering strategies to capitalize on the next market surge, Inman Connect New York will prepare you to take bold steps forward. The Next Chapter is about to begin. Be part of it. Join us and thousands of real estate leaders Jan. 22-24, 2025.

The latest real estate recruitment battle in Palm Beach, Florida, has intensified as Compass welcomes industry veterans Thor Brown of Douglas Elliman and Sam Fingold, The Real Deal reported on Thursday.

“We look forward to seeing the continued success and growth Thor will contribute to the Palm Beach market,” Jeff Dono, sales manager for COMPASS in Palm Beach, said. “Thor’s expertise in the luxury market and his outstanding track record make him an invaluable addition to our firm.”

He added, “Additionally, Sam’s extensive network, both locally and internationally, will significantly contribute to the growth of our market share.” 

Brown, who brings over $300 million in sales volume to Compass, aims to offer his clients a modern and effective approach to launching properties and finding new homes.

With a real estate career spanning over 25 years, Brown has previously worked at Barclay’s International, Fite Shavell, Corcoran and Douglas Elliman. He specializes in luxury properties ranging from under $1 million to over $20 million, as well as renovations and new construction.

Originally from the northeast, Brown has lived in Palm Beach for nearly 30 years, where he has established deep roots.

At Compass, Brown will serve as director of luxury sales, while Fingold will take on the role of luxury real estate advisor, according to South Florida Agent Magazine. Both will operate out of Compass’ Palm Beach Island office at 150 Worth Avenue.

Fingold’s real estate career also spans more than 25 years, with experience in both residential and commercial real estate. He previously served as a senior portfolio manager at Kenyon Investments, LLC, and as an asset manager at Pan Pacific Development.

Originally from Canada, Fingold holds dual Canadian and U.S. citizenship, allowing him to offer unique insights to both Canadian and American clients seeking their ideal tropical home.

The recruitment of Brown and Fingold is part of Compass’ broader strategy to strengthen its presence in Florida’s luxury market.

In January, Compass opened its office at 150 Worth Avenue, housing over 100 agents, as reported by The Real Deal in February.

This office opening followed the launch of two other Compass offices in 2023 — one in Weston and another in Palm Beach Gardens — and the January acquisition of Attorneys Key Title, a Fort Lauderdale-based title company.

Email Richelle Hammiel

US homebuyer down payments reach new record, outpace prices

According to Redfin, the typical U.S. homebuyer’s down payment hit the highest level in over a decade, at 18.6 percent of the purchase price in June, up from 15 percent the previous year.

Whether it’s refining your business model, mastering new technologies, or discovering strategies to capitalize on the next market surge, Inman Connect New York will prepare you to take bold steps forward. The Next Chapter is about to begin. Be part of it. Join us and thousands of real estate leaders Jan. 22-24, 2025.

The average down payment for U.S. homebuyers has reached unprecedented levels, outpacing elevated home prices driven by the current market conditions, according to a Redfin analysis released on Wednesday.

In June, the median down payment soared to a record $67,500, a 14.8 percent increase from $58,788 the previous year. This marks the 12th consecutive month of year-over-year growth in median down payments.

Down payments have grown faster than home prices, which were up 4 percent year over year in June. This trend is likely due to current market conditions, including the likelihood of higher-priced, move-in-ready homes in desirable neighborhoods to sell more often as well as the increased frequency of buyers putting down a larger percentage of the purchase price upfront.

“Investors continue to make all-cash offers on homes needing renovation, while traditional buyers are increasing their down payments to reduce mortgage costs,” Annie Foushee, a Redfin agent in Denver, said. “Many of these buyers are also getting financial support from family to afford larger down payments.”

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According to Redfin, the typical U.S. homebuyer’s down payment hit the highest level in over a decade in June, at 18.6 percent of the purchase price, up from 15 percent the previous year. Nearly 60 percent of homebuyers were putting down 10 percent of the purchase price upfront, an increase from 56.6 percent the previous year.

Among the 40 largest U.S. metros, San Francisco had the highest median down payment, equating to 25.8 percent of the purchase price, according to Redfin data. Conversely, down payment percentages were lowest in Virginia Beach, Florida, at just 3 percent of the purchase price.

Redfin attributes the rise in down payments to increasing home prices, elevated mortgage rates and increases in home equity.

Home prices

The median-priced U.S. home climbed to $442,525 in June, up 4 percent year over year.

Elevated mortgage rates

Higher mortgage rates have incentivized buyers to make larger down payments to reduce the amount borrowed. The average mortgage rate of 6.92 percent in June pushed buyers to increase their down payments in order to lower their monthly payments.

Increased home equity

Homeowners who sold their previous property for more than they paid were able to use the extra equity for larger down payments on new homes. All-cash home purchases have also seen a slight increase, while FHA loans have dropped to their lowest level in nearly two years.

In June, the share of cash purchases rose to 30.7 percent, up from 30.4 percent the previous year.

“The percentage of all-cash sales typically mirrors the fluctuations in mortgage rates. When rates are low, all-cash sales decline, and they rise when rates go up,” Redfin Senior Economist Sheharyar Bokhari said. “We might see all-cash purchases stabilize now that mortgage rates have started to decrease from recent highs.”

Pittsburgh, Pennsylvania, saw the largest increase in all-cash home purchases, with 28.6 percent of homes bought with cash, up from 19.2 percent in 2023. New Brunswick, New Jersey, followed with 36.8 percent of cash purchases, up from 31.1 percent the previous year.

FHA loans made up 13.7 percent of mortgaged U.S. home sales in June, the smallest share since August 2022, and down from 14.9 percent a year earlier. Redfin attributes this decline to near-record-high home prices and rising mortgage rates, which have made affordability more challenging for buyers who typically take advantage of FHA loans’ more favorable and affordable terms.

Email Richelle Hammiel