When I ask most home sellers or For Sale by Owners how the market is, I get this:
“Well”, most homeowners’ say, “I always get a lot of traffic but for some reason I don’t have a cheque in the bank yet.”
I can understand how frustrating that must be, let alone discouraging! Knowing about a home buyer could help you market your home, and it won’t take long.
You see, there are four distinct kinds of buyers out there:
1. The first kind is people making their first purchase of a home. Most first-time buyers are afraid of people selling homes because they feel those sellers have far more experience than they do. To the first-time buyer, purchasing a home is a frightening experience.
Their Aunt Eileen says the bottom is going to fall out of real estate prices before summer; Uncle Jim tells them to keep their money in the bank in case times are tough.
“Without the help of a third party to guide them through all the unfamiliar decisions involved in buying a property, they simply won’t make the purchase. They’re also very afraid of a For-Sale-By-Owner because they know an owner has only one property to sell them. First-time buyers don’t buy until they find a real estate expert they trust and enjoy working with.
97.6% of first time buyers use a Realtor to help them!
2. “Buyers of the second kind are the nearby house changers. They are local people who can take their time looking for their next home. They’re only interested in the bargain of the century. They know the for-sale-by-owner isn’t paying a brokerage fee, so they automatically deduct the fee off the top when they look at the price you’ve put on your house.
Their aim is to find a seller in trouble or someone who has under-priced their home through ignorance of its true market value. They work the FSBO hard, and there is no way they will let the seller save a dime. If they weren’t set on saving the brokerage fee for themselves, these buyers would work through a Realtor.
3. “The third type of buyer is the INVESTOR. If you think the house changer is tough on price, you haven’t met the investor yet. Investors are especially difficult to work with if the sellers are under pressure to move fast or have any trace of a financial problem making them more vulnerable.
Investors want bargains, but they also need counseling—most of them don’t understand all the ramifications of the tax laws or have the thorough knowledge of an area’s values such as a real estate professional possesses. So most investors work through Realtors to save time and assure themselves of access to more properties.
4. OUT-OF-THE-AREA BUYERS are the fourth kind. Most of them need a home right now. Whether they are being transferred or are moving here on their own, their house hunting time is limited. Plus, they are suffering from the culture shock of moving to a new area.
40% of real estate buyers are from out of town and they use a Realtor to find a house for them, so 4 out of 10 buyers a for sale by owner is missing!
They do not know the values here; they don’t know the neighbourhoods they can choose among; and they’re almost always unfamiliar with our entire region. Usually they fly in. Often, instead of renting a car, they depend on a Realtor they’ve been referred to for transportation.
These buyers are under heavy pressure to make a quick decision, and they need all kinds of questions answered fast--- about schools, business services, travel conditions, and so on.
They want to have their own local representative, someone they can trust to look after their interests. When they go back to wind up their affairs, they want to know they have a reliable representative here who will keep them informed and carry out their decisions by phone.
WHAT IS THE BOTTOM LINE IN ALL OF THIS?
For most home sellers, the only buyers they have the most chance of getting an offer from are the local house changers and the investors--- the toughest kind of buyers out there. These people will not pay top dollar--- they will not even pay market price!
Why not expose it to the people who can and will pay fair market price--- first time buyers, out of area buyers. those upsizing or downsizing?
Why not know to whom you are going to sell to and market to them, plus, have someone discourage the tire-kickers?
A famous quote in "The Art of War"
1. Know both yourself & the other & you are never in danger.
2. Know yourself but not the other & you have a 50% chance of winning.
3. Know neither yourself nor the other & you will never win!
My favorite: After the battle, keep your helmut on!