Last Updated on March 31, 2024

Buyer Willingness

By Alan F Macdonald

Buyer Willingness

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.

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

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

    Also, the same metric can be used with a group of homes – average buyer willingness can be used to describe an entire Edmonton neighbourhood.

    If you take a neighbourhood with an average asking price of $522,175 and an average selling price of $514,233, 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. It 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. You can learn more in How Often Do Homes Sell Over List Price in Edmonton?