For Top Dollar, Home Sellers Need To Work Homebuyer Search Patterns
For years, I've been saying the smart way to market a home for sale has changed due to the internet, and today's post is designed to show you why.
We have created a graphic that explains typical homebuyer search patterns on the internet. With 94% of buyers using online search tools to shop for homes, you had better use every tactic at your disposal if you want to get top dollar for your home.
It Only Takes One
"It only takes one!" is what you'll be told by somebody who does not know how to get you top dollar for your home, referring to the number of buyers they "hope" will be drawn to your home. This is loser-speak.
It takes many! The more people who want your home, the higher we can get your price to go. Have you ever been to an auction where only one party wanted the item for sale? What happened? NOTHING! The bidder and the seller were too far apart (bidder failed to meet minimum bid) and the auction, for that seller, was a failure.
If you want to sell your home, picture yourself in an auction. The best online marketing company will expose your home to a full room of bidders, whereas most single agents are hoping somebody shows up to bid.
We use marketing online to get bidders to attend the auction (meaning we market a home for sale online in order to get them to come see your home offline).
Most real estate companies do not understand how to market to the different stages of the online buyer. If you want to sell your home today, and get top dollar, you have to understand how critical your asking price is going to be in making this happen.
Recognizing Homebuyer Search Patterns
The following graphic depicts the typical $300K homebuyer's pattern of shopping online. The same is true for all price ranges, we just used a $300,000 home for our explanation.
The left side of the graphic shows the range of home prices that the buyer wants to see. The triangle shows the tightening progression of future searches as the buyer gets closer to making a decision to buy a home.
Nine Months Before Buying A Home
Starting about nine months before they actually buy a home, the typical buyers has no clue about the process and doesn't want to miss any gems, so this buyer searches from a VERY LOW price up to above their target. The target is a bit blurry as well, as this buyer really hasn't figured out a budget yet.
So the search from $100K to $340K returns thousands of homes, which is just what this long range buyer wants. THERE IS NO WAY this buyer is going to be buying anytime soon, so it does not matter how good any of the homes for sale appear in this search. The buyer is happy just looking at tons of homes.
Unfortunately for the home seller who has hired the wrong real estate company, he or she is given reports about the number of "views" their property has received. Well, would you really consider an online viewing from somebody not buying for another 9 months a "view?"
Six Months Before Buying A Home
3 months into the homebuying process, the buyer still has a long time to go before he makes a decision. He begins to tighten up his search criteria, but his views remain of no value for people who are trying to sell their home today.
This buyer spends a little less of his shopping time looking at homes, and more time reading about ways to save money on the purchase (you can see our Home Buying For Smart People e-Series HERE if you would like to save money on your next home purchase).
Much like the buyer 9 months out, this buyer is also NOT READY TO BUY A HOME, so marketing to this buyer to gain views of a property online will have zero impact on selling a home. Again, most real estate companies do not have anybody with the background or training to be able to discern the six month-out buyer from one who is ready to purchase today. Their small property marketing budgets are wasted attempting to get the wrong buyers to see a home.
Three Months Before Buying A Home
As the buyer progresses over time, we typically see very tightened ranges when buyers are ready to "pull the trigger."
By this time, our $300,000 home buyer has tightened the search criteria to $280,000 to $320,000 in order to find the home that he is going to buy. He has seen EVERYTHING already on the market and knows his target neighborhoods better than most Realtors. After six months+ of shopping, this buyer is a value expert on the home that he is planning on buying. If you enter the market in his price range, he will immediately know whether you are a good value worth visiting or an over-priced turkey that he will scratch off his list.
Marketing Your Home To The Ready Buyer
If you were thinking about selling your $300,000 home, consider these following questions.
- How well would you do with the "price it high and let them make an offer" approach with an asking price of $330,000? Would this buyer even see your home when it hit the market? (remember, by the time he is serious, he only wants to see the best buys so his search range goes from $280K to $320K)
- Does "pricing to the nines" fool this buyer into thinking your home is a steal? We know his range, so do you think $299,999 will get him to your house offline any quicker than $300,000? What if you priced your home at $279,999, would he even see it? Pricing to the nines is a stupid marketing strategy in real estate. Most property searches (like our example) are rounded dollar searches, so pricing to the nines eliminates prospective buyers.
- If you were to price your home at $280,000, would you get enough visitors and offers to bid up the final contract, to perhaps even above $300,000? The answer is not always "yes" or "no," that is why the real estate company that you employ needs to be very sharp in market valuations, not just superb marketers of homes online.
SELL FAST TO GET TOP DOLLAR
With the rare exception for homes that must be marketed in a low-liquidity environment, homes that take longer than 4 to 14 days will likely yield less money for the home seller than a home sold within the proper time frame.
Give us a try, talk to us about the "why" of this, and we'll start by taking a look at the current inventory of homes like yours that are listed for sale in Tallahassee. Whether you want to sell your home now or sometime in the future, our meeting will help you prepare to get top dollar for your home.
I hope this discussion about homebuyer shopping patterns helps you understand the critical importance in setting an initial asking price that will gain you top dollar in the sale of your home.
Obviously, there is so much more to this conversation than what we have addressed in our daily article, but the key is to understand that patterned shopping is something that we have been able to study, identify, and exploit for our home sellers.
Finding the best buyer for a home is very similar to fishing for the biggest fish. You have to understand bait and tackle, but more importantly, you have to know where the fish are and what they are doing. An ignorant angler who buys the nicest boat and the best fishing tackle is not likely to catch the biggest fish.
The experience to put the right bait, in the right place, at the right time makes the experienced angler the one with the biggest (and most) fish most often.
If you would like to know more about landing the biggest buyer for your home, just drop me a note and we'll be in contact right away to help get your started. Even if you are not planning to move right away, a meeting now will give us extra time to help you schedule and prepare to ensure that you get top dollar for your home.