Buyer Willingness

By March 3, 2012 TERM
What is Buyer Willingness? - Real Estate Definition

What Does Buyer Willingness Mean?

Buyer willingness (in real estate) is how willing a buyer is to pay full price for a home.

Real Estate Agent Explains Buyer Willingness

If a house is listed for sale for at $550,000 and the selling price ends up being $510,000, the buyer willingness would have been 510/550 = 92.7%. The buyers paid 92.7% of the asking price to get the home.

$latex Buyer~Willingness=\dfrac{Selling~Price}{Asking~Price}&s=1$

$latex Buyer~Willingness=\dfrac{\$510,000}{\$550,000}=92.7\%&s=1$

Also, the same metric can be used with a group of homes – average buyer willingness can be used to describe an entire area, as with the Gimme-shelter Neighbourhood Profiles.

If you take a neighbourhood with an average asking price of $322,175 and an average selling price of $314,233, you have an average buyer willingness of 97.5%. When it comes to talking about the Edmonton real estate market, it is average buyer willingness we are concerned with, not a specific willingness to buy a specific home.

Why Does It Matter?

Buyer willingness, along with absorption, is a measure of the demand for homes in a specific area. Buyer willingness shows whether people are willing to put their money down on a home and how much of if they’ll spend. Demand dictates real estate prices. If buyer willingness is very high, that means that the area is in higher demand, and property values will increase. If buyer willingness is low, it means the area is in low demand and property prices will decrease.

by +Alan F Macdonald REALTOR® | Copyright © – gimme-shelter.com

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Alan F Macdonald

Author Alan F Macdonald

Alan F Macdonald is a real estate agent with Maxwell Challenge Realty in Edmonton, Alberta.

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