Know Your Buyers!

13 Jun 2010

As you know, aside from food and clothing, shelter is a fundamental need. People need a roof over their heads, a place they can call home.

Now, this may seem like obvious information and not important for us to think about, but really, its a very important thing to be aware of as you sell your real estate. Why?

Because this awareness points to one essential fact that should give you an ENORMOUS amount of confidence; especially if this is going to be your very first (of many!) real estate sales transactions: there will always be people looking for houses, regardless of whether we live in good times or bad.

Knowing the types of buyers in the market will help your position as a seller!

The Buyer Pool

So who are these buyers that are poised to do business with you? They are people in your buyer pool. The phrase buyer pool refers to those people who are interested in buying a certain piece of property in a certain location at a certain price. This is the group that you, as a seller, should focus on. The buyer pool is different from the bunch of mere onlookers or “prowlers” who like to spend Sunday afternoons looking into the homes of other people.

As you gain experience in this field, youll almost instantly be able to tell the genuine buyers from the speculators (or the people who are just bored and like looking at real estateand yes, there are some of them out there).

Bill Effros, in his great book How to Sell Your Home in 5 Days, says the profile of a buyer pool will change constantly. Some buyers may decide eventually to purchase a home elsewhere, some get frustrated and leave the pool, still others decide they want to buy and therefore stay in the pool.

The buyer pool is made up of different types of buyers bear in mind that some buyers are looking for homes NOT to live in, but to invest in. You will typically encounter a mix of the following types of buyers :

  • End buyers: buyers who will live in the home.
  • Professional buyers these include real estate brokers, builders who want to develop real estate in your location, speculators (quick cash wheelers and dealers) and developers looking to buy strictly for the land value. Effros says not to be afraid of professional buyers. If circumstances warrant, they could offer the best price for your house, given their cash reserves.
  • Cash buyers this is the group to whom you can consider giving a discount because you do away with the lending and mortgage nitty gritty that could take weeks, even months. Cash is king, so flexibility in negotiating price is not a bad idea.
  • Mortgage buyers since majority of people cant buy homes for cash, they borrow the funds to acquire possession of a piece of property. They fall into two groups: 1. the pre-qualified ones (those who have started the process and have discussed preliminary details with the bank). 2. pre-approved mortgage buyers (the bank has made a commitment to lend them a specific amount of money under certain terms and conditions)

The Buyers Perspective

Selling your house quickly and successfully requires that you see a piece of property through a “buyer’s eyes”. How do you do this? Well, put yourself in the buyers shoes. What does he/she see about your house that you havent noticed yourself?

One real estate broker said that a trick shes learned in getting sellers to think “out of the box” is to take them across the street from their house, and then asks them to give their house a long hard look, and spot things theyve never noticed before.

When this exercise is done, she then takes them on a detailed tour of their house: front yard, back yard, side alleys, garage, bathrooms, the whole look-see. This way, they come up with a list of repair jobs that need to be done before they can even think of putting their house on the market.

What Buyers Look For

What do buyers look for in terms of the house itself? Many agree that location is a decisive factor, but so are tangibles like the price and condition of the property (is the price worth the additional huge sums of money to put this house back into mint condition? How much time will I need to renovate the dilapidated portions of this house?). Buyers will be on the alert for the following :

Start with the outside of the house and ask yourself the following questions, because these are the questions that your potential buyer will be asking!

Do these garbage cans, discarded wood scraps and building materials strewn about carelessly an indication of the sellers negligence?

  • Are the gutters and roof in place? When was the last time the seller changed the roof?
  • Apart from the human occupants of the house, are there termites and other insects that live here also?
  • These overgrown bushes and trees are distracting. What is it that the sellers dont want us to see?
  • Is the lawn is looking unhealthy? Is the rest of the house like that?
  • Have the patios and decks been converted into storage areas? Why cant we see what they actually look like?
  • The paint is peeling off; is that why the house looks so drab and uninviting?
  • Why are there no lights outside the house? Is this the owners way of saving on utility bills? Is this a safe neighborhood?

The above questions are just a few of the many questions buyers are likely to ask with respect to the outside of the house. A houses exterior constitutes the buyers first impression. And we all know what they say about first impressions, they are powerful and outweigh other considerations!

Now lets look at the inside the house: what are buyers looking at Barb Schwarz advises sellers to be guided by the 3 Cs in real estate:
1. cleanliness
2. clutter
3. color

These three are self-explanatory, yet many sellers overlook the fact that buyers have fixed ideas about what makes a house clean, bright and uncluttered. Dont take clutter for granted. Clutter is a big turnoff. Too many objects lying around the house collect dust, and when you have an open house and the sun is streaking in through those large windows, the dust becomes very conspicuous.

Schwarz explains: Clutter makes it difficult for a purchaser to mentally move
into a home. This means that purchasers have a hard time imagining where
their sofas and entertainment centers will be placed because the clutter is hampering visualization.

This is what Schwarz tells her clients: the way you live in a home and the way you sell a home are two different things. This is just her way of saying that some clutter does give a home a lived-in feeling, but too much is too much and makes buyers very, very nervous.

TAGS Real Estate The Buyer Pool Know Your Buyers! buyers seller What Buyers Look For Bill Effros How to Sell Your Home in 5 Days Schwarz



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