Understanding The Home Buyer

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If you are thinking of selling your home, chances are you're caught up in a mass of emotions. You may be looking forward to moving up to a new home or facing the uncertainty of a major move across country. You may be reluctant to leave your memories behind or eager to start new and exciting adventures.   Remember, I am here to help you with any of your needs.  Call or e-mail me today!

When conversing with real estate agents, you will often find that when they talk to you about buying real estate, they will refer to your purchase as a "home." Yet if you are selling property, they will often refer to it as a "house." There is a reason for this. Buying real estate is often an emotional decision, but when selling real estate you need to remove emotion from the equation.

You need to think of your house as a marketable commodity. Property. Real estate. Your goal is to get others to see it as their potential home, not yours. If you do not consciously make this decision, you can inadvertently create a situation where it takes longer to sell your property. 

As the home seller, you can control three factors that will affect the sale of your home:

1. The home's condition
2. The asking price
3. The marketing strategy

Most real estate advice tells you to work on the outside of the house first. The exterior is the most important. A homebuyer’s first impression is based on his or her view of the house from the real estate agent’s car. In addition, exterior repairs can take longer to complete. 

Painting can be your best investment when selling your home. It is not a very expensive operation and often you can do it yourself. Do not choose colors based on your own preferences, but based on what would appeal to the widest possible number of buyers. You should almost always choose an off-white color like “Beige” because this helps your rooms appear bright and spacious. 

So you’ve decided to sell your home and have a fairly good idea of what you think it is worth. Being a sensible home seller, you schedule appointments with three local listing agents who’ve been hanging stuff on your front doorknob for years. Each Realtor comes prepared with a "Competitive Market Analysis" on fancy paper and they each recommend a specific sales price.

Amazingly, a couple of the Realtors have come up with prices that are lower than you expected. Although they back up their recommendations with recent sales data of similar homes, you remain convinced your house is worth more. When you interview the third agent’s figures, they are much more in line with your own anticipated value, or maybe even higher. Suddenly, you are a happy and excited home seller, already counting the money. 

If you’re like many people, you pick Realtor number three. This is an agent who seems willing to listen to your input and work with you. This is an agent that cares about putting the most money in your pocket. This is an agent that is willing to start out at your price and if you need to drop the price later, you can do that easily, right? 

The truth is that you may have just met an agent engaging in a questionable sales practice called "buying a listing." The agent "bought" the listing by suggesting you might be able to get a higher sales price than the other agents recommended. Most likely, the agent is quite doubtful that your home will actually sell at that price. The intention from the beginning is to eventually talk you into lowering the price. 

Whichever the case, if you start out with too high a price on your home, you may have just added to your stress level, and selling a home is stressful enough. There will be a lot of "behind the scenes" action taking place that you don’t know about.

Contrary to popular opinion, the listing agent does not usually attempt to sell your home to a homebuyer. That isn’t very efficient. Listing agents market and promote your home to the hordes of other local agents who work with homebuyers, dramatically increasing your personal sales force. During the first couple of weeks your home should be a flurry of activity with buyer’s agents coming to preview your home so they can sell it to their clients. If the price is right.

If you and your agent have overpriced the home, fewer agents will preview your home. After all, they are Realtors, and it is their job to know local market conditions and home values. If your house is dramatically above market, why waste time? Their time is better spent previewing homes that are priced realistically. 

Later, when you drop your price, your house is "old news." You will never be able to recapture that flurry of initial activity you would have had with a realistic price. Your house could take longer to sell.

Even if you do successfully sell at an above market price, your buyer will most likely need a mortgage. The mortgage lender requires an appraisal. If comparable sales for the last six months and current market conditions do not support your sales price, the house won’t appraise. Your deal falls apart. Of course, you can always attempt to renegotiate the price, but only if the buyer is willing to listen. Your house could go "back on the market."

Once your home has fallen out of escrow or sits on the market awhile, it is harder to get a good offer. Potential buyers will think you might be getting desperate, so they will make lower offers. By overpricing your home in the beginning, you could actually end up settling for a lower price than you would have normally received. 

Your listing contract should specify whether or not the house will be listed with the local MLS (multiple listing service). It is definitely in your interest to have the house listed. This is because your sales force is automatically multiplied by however many agents are members of the local MLS. If your house is not listed, then you only have one agent working for you instead of many. 

A sign goes up in the front yard. Ads are placed in the local newspaper and real estate magazines. Your agent holds an open house on the weekend. Your house is proudly displayed on the Internet.

Your agent should prepare a flyer that displays a photo and provides details about your house. There should also be a phone number so buyers can contact your agent to get additional information. The flyers should be displayed in a prominent location in your home and also in a brochure box attached to the "for sale" sign.

The brochure box is convenient for those buyers who drive by and just happen to see the "for sale" sign in front of your house. It provides enough information so they can determine if they want to follow up with a phone call or inform their own agent they are interested in your house. 

But this is only "surface" marketing. More important activity occurs behind the scenes. After the "for sale" sign goes up and flyers are printed, your agent’s main job is to market your home to other agents, not to homebuyers.

Broker preview is open to all the members of the local multiple listing service. It usually occurs within the first week your house is placed on the market. However, there are lots of new listings to choose from, and not all the agents preview all the new listings each week. You may not get a lot of agents visiting your home, unless your agent "entices" them to come. This is where you could provide some help, if you are so inclined.

Your agent will undoubtedly prepare flyers about your property so that prospective homebuyers can be informed about the attractive features of your house. These flyers (or similar ones) should also be sent to all the local real estate offices, too. Most areas have a weekly flyer service that delivers advertisements to all of the local offices. Since agents get these flyers every week, they do not always look at them. However, a large percentage of them do. Some agents will keep the flyer and bring buyers to your house.

Your agent probably belongs to a local association of Realtors and they often have meetings once a month. At these meetings there is often a "marketing session" where some agents stand up and tell about their listings and other agents stand up and tell about their buyers. Your listing agent has an opportunity to "pitch" your house at these marketing sessions. 

When you first list your home many agents send "announcements" to all of the other houses in your neighborhood. This can be done in the form of postcards, a letter, or flyers left hanging on the front door. These are important because your neighbors might have friends who are looking to buy a house. The announcements create "word of mouth" advertising, which is the best kind. 

An open house performs a similar function to the neighborhood announcements – it lets all of your neighbors know that your house is for sale, and it practically invites them to come "take a look." Being generally nosy, a lot of your neighbors will take advantage of the invitation. And they may tell their friends about your house, creating more "word of mouth" advertising. 

It’s important to note that there are numerous other factors that influence a home buyer, and you need to understand these consumer trends when you enter the seller’s market. The more your home matches these qualifications, the more competitive it will be in the marketplace. Your real estate professional can advise you on how to best position and market your home to overcome any perceived downsides.

Unfortunately, the most influential factor in determining your homes appeal to buyers is something you can’t control: its location.

According to the National Association of REALTORS®, neighborhood quality is the No. 1 reason buyers choose certain homes. The second most influential factor is commute times to work and schools.

While some buyers want to simplify their lives and downsize to a smaller home, home sizes in general have continued to increase over the decades, nearly doubling in size since the 1950's. Smaller homes typically appeal to first-time home buyers and empty nesters, or couples whose children have grown up and moved out. 

Preferences in floor plans and amenities go in and out of fashion, and your real estate professional can inform you of the hot ticket items that are selling homes in your market. If your home lacks certain features, you can renovate to increase its appeal, but be forewarned: That’s not always the right move. Using market conditions and activity in your neighborhood as a gauge, your real estate professional can help you determine whether the investment is likely to help or hinder your profit margin and time on the market.