Get Inside The Buyers Mind

Get to know your consumer – The Buyer

What are their motivations, their fears, and their goals?  Since you’re now in the business of selling a home, it’s important to take some time to get to know your customer!

Understanding the buyer will influence everything you do from this point forward and will hopefully result in a financially and personally rewarding sale.

Remember when you where buying?

Many sellers quickly forget what life as a buyer was like.  Buyers feel so much anxiety and excitement, but it all is quickly forgotten once they settle into their new home.  It’s worthwhile to think about just what the buyers are going through, so let’s see if I can take you back to those long ago days…

Your buyer is:

  • Fed up looking through the real estate section in every news print, website and magazine.
  • They don’t think they will ever find the perfect home.
  • They have had at least a few fights with their significant other over this.
  • They have fallen in love with a few places, only to be outbid.
  • Every month it gets more painful to write that rent check.
  • The market seems to be getting hotter and hotter, pricing them out of more homes.
  • The market seems to be cooling, and the sellers are not sure they should sell, so inventory is scarce.
  • They start thinking about all the things they have given up in order to scrape a down payment together.
  • They have seen so many houses that they can’t distinguish one from the other anymore.
  • They are not sure they can afford any of this.
  • Every friend, co-worker, family member asks them about their home quest daily; and offers tons of advice and reminders of their personal horror stories.
  • Their parents think heading out with the Realtor is an idled attempt to continue up appearances with ‘rebound’ phase they are in.

Finances

The most obvious exposure that buyers feel is financial.  Suddenly they know exactly how much money they have – and how much they don’t have.  They also come fact to face with their personal debt and their credit rating.  People who previously spent their days blissfully unaware of their financial status suddenly know every detail, and it’s the rare individual who is complete with what they see.

Buyers also realize that the details of their finances are unexpectedly very public.  “Your shopping in what price range?”  There is a tremendous amount of financial uncertainty involved in a home purchase; especially for first time home buyers.  It’s almost impossible to know exactly what their monthly outlay will be.  No one can predict the market, and if you stop to think about it; as most buyers do, it’s really a huge leap of faith.

Personal lives

In addition to financial exposure, there are also innumerable personal details that surface.  I’ve seen couples discover just how different they are while buying a home.  They have different tastes, different risk tolerances, and different priorities.  Moreover, extended family often gets involved, which is always an adventure.

Leaping into the great unknown

Beyond feeling exposed financially and personally, buyers are faced with a huge great unknown.  Information overload.  Every day buyers find out new news, stats, mortgage change, or community crime; some new fee or service charge that someone wants; and what about the uncertainty of all that ‘personal’ advice that they have received 20 times a day from their well intended inner circle people…including the dog groomer; and the fact that their relationship is on the rocks because someone is sleeping on the couch for the last week.

Will they ever find the property and move onto the next phase?

What does all this mean for sellers?

As you can see, buyers find themselves completely exposed, uniformed, over informed, naked before the world, about to embark on the biggest financial commitment of their lives.

To say the least, they’re not entering into this casually.  Prospective buyers look for reassurance, and many times they’ll fixate on any uncertainty and imperfection.  If they see a dripping faucet, they’ll assume all the plumbing is bad.  If there’s a patch on the roof, they assume it means the whole roof could cave in at any minute.

Sellers must not allow the seeds of doubt to take root in prospective buyers.  It’s too easy for that negative energy to snowball until they want out.

Top five ways to put buyers at ease

  1.  Leave the house.  Most buyers feel like they’re intruding if the sellers are home.  You want them to “move in mentally” right away and not feel self-conscious about moving through the house with you peering over their shoulder.

2.  Get a lock box.  Having a lock box makes it very easy for buyers’ agents to get into the house for showings.  It just eliminates one more potential unknown for buyers.

3.  Turn on the lights.  This might seem like a minor point, but it’s crucial to the showing experience.  You want buyers to immediately feel at ease as soon as they walk through the door.

4.  Contain or remove the pets.  You do not want the agent or the buyer to be wrestling with your pet while someone is looking on aghast.

5.  Clean, clean, clean.  Basically, you want your home to look like the grand opening of a high end boutique!  Everything clean, organized, in it’s place and smelling fresh as a field of laundered linen.

What they don’t know can scare them
Given the enormity and uncertainty of even an average real estate transaction, it’s amazing that any properties ever actually sell.  Buyers need to take a leap of faith and commit to something they’ll never know everything about.  Sometimes, of course, their fears get the best of them.

Types of buyers

What type of buyer could be coming through your door?  Lets explore…

First-time buyer profile:  They are usually rather cautious.  Any abnormalities will get their attention.  Because they’ve never owned a home before, they probably don’t know how to distinguish a minor cosmetic issue from a structural problem.  They’re usually strapped for cash, and a thirty-year mortgage feels like a lifetime commitment.  Also, there’s a good chance they’re getting all or part of their down-payment from relatives, which can really make things interesting.  Money from relatives almost always comes with a lot of unsolicited advice, which can easily overwhelm an already stressed-out buyer.

Single professional profile:  These are young go-getters who may travel a lot and make a lot of money.  They don’t need a lot of space and certainly don’t need big yards.  If there’s an extra bedroom they’ll likely convert it into an office.  They want to be able to just shut the door behind them and head out of town without worrying about anything.  On the other hand, some may be looking for “status” homes.

Buyers who have outgrown their house profile:  These are buyers for whom family concerns are paramount.  They’re likely to be experienced buyers, with a bit more financial security that the first-time buyers.  They’re probably looking for a long term house, something that meets the needs of their growing family and will get them through the high school years.  Space is essential.  They’re more interested in fancy details than solid, child-resistant construction.  Storage is also important, as well as a yard.  Location, is a top priority.

Relocators profile:  Primary people who are moving long distances because of work, although they can  also move for family or retirement reasons.  The key factors influencing them are time and unfamiliarity with the new market.  Particularly for job-related re-locations, timing is key.  These folks are usually on a tight schedule and have to sell their current house before buying a new one.  For just about all relocators, there’s little knowledge of the new market.  They’re unfamiliar with the neighbourhoods and often have to overcome significant sticker shock.  Also, they can be looking to buy at any time of the year, since relocations are usually not seasonally dependent.

Lifestyle-change buyer profile:  This category includes parents whose children have just moved away and buyers coming out of a divorce or the death of a spouse.  For the most part these buyers tend to be more mature and require less space.  These folks are obviously looking for less square footage and probably one-level homes for older buyers.  The’re not interested in fixer-uppers.  They want lots of storage for all the stuff they’ve accumulated over the years, plus a spare room for visitors.

Why remodel, just replace buyers profile:  These are folks who have contemplated expanding their current homes and decided they’d rather just buy a new place and save themselves the hassle of pulling permits, dealing with contractors, and so on.  They tend to have lots of equity in the current home.  These people are in the market for a house for all you need to do is move right in.  In some cases they want to buy more square footage rather than expand their current house, or they just want a brand-new version of their current place.  You know the way new construction has a gleam about it, from the perfect painted walls to the shiny new appliances.

Rental property buyers profile:   These buyers are real estate investors, although they may include buyers looking for vacation homes that they’ll rent out for most of the year.  They approach the sale impersonally and are only thinking of the bottom line.  These buyers may or may not want a place that needs work, but ultimately they want a property that will be sufficient for tenants.  They’re looking for clean, basic homes that will be easy.

Buyers who want to fix and sell fast profile:  These are the day traders of real estate, the serious players looking to make a quick profit.  Flippers are usually looking for places that need cosmetic work, so they can quickly dress the place up for resale, although some may be interested in more extensive renovations.  They want to close quickly, so they can get in and start prepping the house for resale.

Vacation home buyer profile:  These folks tend to be older and more financially secure.  They’re definitely experienced buyers.  Obviously, location is most important to these people.  They’re looking for a perfect getaway near the lake, in the mountains, or wherever they want to escape to.  For sellers, it will be pretty obvious if your home would be of interest to these buyers.

If you meet these buyers beware!

The vast majority of prospective buyers are rational, considerate people.  But every once in a while you’ll encounter a buyer who seems intent on making your life miserable – someone you just know will be trouble.  It’s important to recognize these buyers quickly, and be prepared to deal with them.  Protect yourself, your investment, and your sanity.

  • Buyers who have been looking full time for over six months.
  • Bottom feeders.
  • Buyers who have not been pre-qualified.
  • Buyers who won’t show proof of downpayment.
  • Buyers who don’t follow through.
  • Buyers who represent themselves.
  • Buyers who need to sell before they can buy.

The buyer’s cycle

The last aspect of buyer’s motivations that we’ll explore is timing.  You can learn a lot about buyers, and therefore maximize your chances of successful selling, buy understanding the best seasons in which to sell.  Let’s take a stroll through a typical calendar year and see what’s on buyers’ minds as the seasons go by:

January:  While there may not be huge numbers of prospective buyers looking around in the dead of winter, those who are have probably been putting off any serious consideration since October owing to the craziness of the holiday season.  So after the first of the year we do see an increase in activity.

February and March:  This is tax time.  People meet with their accountants and realize they need some tax relief.  RRSP contributions can help people get their down payments together.  This is a really good time to put your house on the market since demand is picking up rapidly, and you can catch these prospective buyers at the peak of their interest.
April to August:  This is high season for just about everyone.  Everyone’s got a little more time to devote to looking for a home.  With school out of session, most families with children are looking to move before the new school year starts.

September to December:  With school starting up again, and the relaxed pace of summer just a memory, the time and interest in real estate slows dramatically.  Once the holidays appear on the horizon, the market can go stone cold.

All buyers are welcome

The key when preparing your house is not to exclude any potential buyers and to keep in mind that your house is likely to appeal to at least two or more of the nine types of buyers!

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