Women face an inherent bias when it comes to real estate. Learn how to mitigate your losses and maximize gains.
By Deidre Huntington
Millie, a content program about women and money, is licensed from Dotdash Meredith, publisher of Real Simple, InStyle, Investopedia, The Balance and more.
When Clare* sold her Vancouver condominium, she was confident in her asking price. She had consulted an experienced realtor who based the number on recent sales information and square footage data. Overall, she recalls that the sale was a low-pressure, relatively straightforward process.
But unfortunately, this wasn’t the case when she bought the condo. “As a single woman, I felt on my own throughout the whole process and was unsure if I was being treated fairly and getting the best price,” she says.
So what changed between buying and selling her condo? Her marital status.
Clare bought the place when she was single and sold it five years later when she was married. “I was treated better as a married woman than I was as a single woman,” she says.
Clare’s experience is not unique—a fact corroborated by a Yale Insights study that focused on gender disparities in real estate, particularly on how single women fare when buying and selling property. The data shows that single women see significantly lower returns from buying and selling real estate than single men, losing out on an average of $1,600 per year. While it may not sound like a huge amount, it quickly adds up when you consider that homeownership accounts for the majority of American households’ wealth, even more than stock market investments.
An Imbalance in the Housing Market
Single women consistently leave money on the table when buying or selling property, and have been doing so for a while now: The Yale Insights study analyzed housing data across 26 years (from 1991 to 2017) and it shows a pattern of women buying property for approximately 2% more and selling for 2% less (after controlling for market timing) than men.
Furthermore, if we look at an example of a 30-year fixed-rate mortgage with a 20% down payment, men earn approximately 7.9% points higher returns per year than women overall. That’s not an insignificant number.
This disparity isn’t affecting only a small segment of homebuyers and sellers, either—single women are a significant force in the real estate market. “There’s this myth that single women aren’t active in the market,” says Jessica Lautz, vice president of demographics and behavioral insights at the National Association of Realtors. “But they consistently account for around 20% of all first-time homebuyers. That’s second only to married couples,” she adds.
Bias Begets Bias: Why Women Earn Less
So why does this so-called gender real estate gap occur? Gender differences across states, the timing of transactions, decisions on the initial list price of the property and the negotiation process can all stack up against single women and female couples.
According to the study, women selling a home tend to list them at lower prices and, when buying, make more attractive first offers than their male counterparts. In general, women also negotiate smaller discounts when buying.
It’s important to note that these insights don’t mean that women are making mistakes. But it does mean that women can face more gender bias, especially during the negotiation process. Even when they attempt to employ more “aggressive” tactics (like men), it can work against them.
Be a Smart(er) Investor
While this gender discrepancy can feel impossible to overcome, there are ways solo female homebuyers and sellers can protect themselves from a financial loss and combat the inherent bias they will likely face. Let’s take a look at a few of them:
Buyers: Know How Much to Save
If you’re a buyer, it’s recommended you come to the table with a hefty down payment to make your future mortgage payments manageable. This can also alleviate any worry you may have about the cost of the property. Aim to save a 5% down payment and grow those funds in a high-yield savings account to get the biggest bang for your buck.
Buyers: Work on Your Debt-to-Income Ratio
Your debt-to-income ratio is your minimum monthly debt payments divided by your pre-tax monthly income. Keeping this ratio low (around 36% or less) can make you a more attractive candidate to lenders and help level the playing field for your buying power.
Buyers and Sellers: Get Reliable Help
Find professionals that you trust to guide you through the buying or selling journey. The real estate market can be complicated, so consider getting referrals for realtors, loan officers and financial planners who can help you maximize your buying or selling power—and wave a red flag if something seems amiss.
Buyers and Sellers: Ask Yourself the Tough Questions
Homeownership isn’t for everyone and there is a lot to consider. Take stock of your values and goals and consult with a financial advisor to make sure buying or selling a home is the best wealth-building strategy for you.
*This source requested that her last name be omitted.
Deidre Huntington is a writer and digital nomad who also runs her own strategic communications business. She is currently based in the Washington, D.C., area and is passionate about women finding their own path to joy and success.
Three Things to Do
- Figure out how much you can afford on a home.
- Explore first-time homebuyer loan programs.
- Before you shop for a mortgage lender, read these tips on what to look for.
