Are People More Willing in 2024 to Sell to Private Home Buyers?

Introduction 

In recent years, the real estate market has seen a significant shift. According to a 2024 Canadian Home Buyer Report, almost half (49%) of Canadians — approximately 15.5 million people — say they plan to purchase a home in the next five years. However, only 11% of Canadians say they expect to buy a home within the next 12 months. This trend is not limited to Canada. In the United States, about three-fourths (74%) of Americans say something is preventing them from buying a home in 2024, up from 69% in 2023. These statistics suggest a growing interest in alternative methods of home buying and selling, such as private or cash home buyers. 

Why Homeowners May Be Inclined to Use Private Home Buyers 

Lower Sales Costs 

Perhaps the most compelling reason for homeowners to consider selling their homes privately is to save on real estate commissions. Traditional real estate agents are paid a fee to sell homes, which can add up to tens of thousands of dollars depending on the sale price of the home. By selling privately, homeowners may be able to save on this fee. 

More Control Over the Sales Process 

Selling a home privately gives homeowners more control over the sales process6. They can organize showings, field questions, and vet buyers themselves7. This can be particularly beneficial for homeowners who have specific needs or preferences that may not be met by traditional real estate agents. 

Flexibility and Negotiating Skills 

Homeowners who have some negotiating skills may find selling their home privately advantageous. When offers start coming in, homeowners will need to know how to negotiate to ensure they don't leave any money on the table and get the highest price for their home. 

Unique Circumstances 

There are also unique circumstances where selling to an investor or cash home buyer may be ideal. For instance, if a homeowner is facing foreclosure, has inherited a home they don't want, or can't finance their property to another buyer, selling to an investor can be a great option. 

Additional Reasons for Selling to Private Home Buyers in 2024 

Market Predictions and Economic Climate 

The economic climate and market predictions for 2024 also play a significant role in homeowners' decisions to sell to private buyers. With turbulent inflation and rising interest rates dominating headlines in 2023, many homeowners are wondering what the housing market will look like in 2024. Economists widely predicted a recession in 2023, but it didn't materialize. Instead, we saw a year of high inflation that was a bit sticky, which means it didn't respond to rate hikes as quickly as some hoped.

Today, the current policy interest rate is 5%, and the posted five-year fixed mortgage rate is 7.04%. These factors directly affect Canada’s housing market and could influence homeowners' decisions to sell to private buyers. 

Increased Inventory and Lower Mortgage Rates 

In 2024, experts are predicting rebounding home sales, lower mortgage rates, stabilizing home prices, and increased inventory. These factors could encourage more homeowners to sell their properties privately. Lower mortgage rates could get buyers off the sidelines, and increased inventory could lead to more opportunities for private sales.

Personal Reasons for Selling 

Personal reasons also play a significant role in homeowners' decisions to sell to private buyers. According to a 2023 survey, the most common reasons for wanting to sell include wanting a bigger home (40%), it being a good time to sell (37%), wanting to move closer to friends/family (30%), needing to move closer to their job (23%), wanting a smaller home (21%), relocating (20%), and thinking they could make a good profit on their home (18%)7. 

In conclusion, while selling a home privately may not be for everyone, it is a viable option for many homeowners in 2024. As the real estate market continues to evolve, it will be interesting to see how these trends develop in the coming years.