Understanding buyer behavior is critical when selling a property
UNDERSTANDING BUYER BEHAVIOUR is critical if you want to achieve the maximum result when selling a property. Understanding buyers will put your property in a better position to attract 100% of your available market, in doing so this can create the competition that can be leveraged to create a higher price.
Different buyers will be attracted to different properties base on individual needs so it is important to understand who is the likely buyer for your property and market it accordingly. For instance, you wouldn’t style a knock down home in need of serious renovations as it will more than likely appeal to a renovator or builder.
Best practice is to attend open inspections in the same area and similar properties to your and check out what types of buyers they are attracting.
With the exception of auctions, a whopping *94% of buyers will disregard a property that has no advertised price. The common feedback from buyers is that when a price isn’t revealed, they feel the owner clearly wants too much or the price is over inflated. Quite simply, if you remove the price, expect much less enquiry and prepare for a longer sale period.
Why are auctions different? The market sees auction differently to other methods probably due to the transparency and the selling process being more public and out in the open. Internal research shows that people are much more comfortable if being guided by a list of comparable sales provided by the agent as opposed to a low price being quoted prior to an auction.
Financial capability of buyers vs asking price
It’s well know that any buyer will not look to spend every cent they have on a home. Most will speak to a bank to find out what they can borrow and seek properties 10-15% below their maximum capability. This is usually to compensate for any future rate rises or works that they wish to undertake on a property.
If a property is positioned too high it may fly under the radar of many potential buyers who although aren’t necessarily looking to spend close to your target price, might and could stretch if they find one that ticks all the boxes.
Contrary to popular belief, buyers will not just go and look at any home and homes do not ‘sell themselves’. Properties that represent good value will always sell faster and attract more interest than those that are pitched too high where the owner is assuming people will low ball offer anyways. Putting the price too high as dangerous to the process as under-quoting.
Buyers tend to go through a process when purchasing which includes three phases and usually over a 12-18 week period. Buyers in the early stages of looking are much more reluctant to commit to a purchase or signing a contract where those that are in the latter stages put a high amount of value in getting their weekends or time back and are much more prepared to pounce when the right home comes along.
Quite often a seller will be reluctant to take an early offer even if it’s at their asking price, as they can feel having just hit the market, early interest may be a sign that a bigger offer or more interest is coming. It’s important to note that although your property might have been on the market for 1 week, they people looking at it have been in the market for months and are ready to go.
*Source – Residential Consumer Omnibus – March 2015 base. Respondents looking to buy residential property.