What are home buyers thinking?
They say that if you really want to understand someone, you should walk a mile in their moccasins. The only problem with that is now you are a mile away and wearing someone else’s shoes. But I digress. Hold on–I promise to connect this random thought with a few others and hopefully you walk away enlightened.
Everyday sellers want us to look at their ad, their pictures, and their prices to weigh in. Every day, those same sellers are hoping to find the perfect ad to make sure their house sells right away. One of the first lessons that stuck with me as a rookie salesperson is that you have to get into the mind of your buyer.
Too often, a seller looks at their home and focuses entirely on why people should buy it. Some sellers are so convinced they are right they can become blind to all other possibilities. What’s worse, the seller’s friends and family agree with them, which only pushes them further into fantasy land.
Sellers put so much time and energy into the tiniest details. We’ve witnessed the carnage of a seller discovering a typo in the ad or deciding one of their pictures is out of order. These grown mature adults freak out like a bride on her wedding day. Other than the undue stress, this passion for detail and overthinking is not bad–it’s just not particularly effective.
When you obsess over details and “sell yourself” that your home is worth more than it actually is, you have overlooked one teeny tiny problem–the buyer gets a vote too. Without the buyer’s vote, we get nowhere.
…you overlooked one teeny tiny problem–the buyer gets a vote too
This is why it is so important to put on your buyer goggles when you start making decisions about your marketing. For our purposes, marketing includes everything from your price to your description and photos. If you think like a buyer—you will win. If you think like a seller—you will lose. It really is that simple.
First, let’s take a quick look through your seller goggles.
Picture it—you are getting ready to sell the house. You get all worked up because you look around your place after you’ve done all the fix-ups and decide that you are worth $xxxx. Worse, you decide the amount you “need” to get out of the house and work backward from there to come up with a list price (plus some room for negotiations). When viewed through your seller goggles, this makes absolutely perfect sense.
After you land on what you think is a great price, you write a novel-length ad telling the world about every detail of the house. Then you take 900 pictures to make sure that you cover everything. I mean everything. No stone unturned. “Honey, did you get some good pictures of the crawl space?”
Finally, it’s time to put the ad out there and the sign in the yard and wait for the many many offers to show up. You imagine dozens of buyers lining up—foaming at the mouth, fighting in line, money falling out of their pockets—to buy your house…(insert dreamy sigh here).
Not so fast, amigo.
Put down the seller goggles and let’s see what the buyers are seeing.
First things first: buyers do not care about you or your house. They probably don’t care about the improvements or repairs you’ve done. They can’t even conceive of how much attention you’ve paid to this incredible chateau. They don’t care about your gold-plated toilet handles. They don’t care about the time spent lovingly nurturing your grass. They don’t care that you installed top-of-the-line light switches. They don’t even care that your mailbox is made of stainless steel.
They just don’t care.
Well, if buyers don’t care about all of those arguably important details, what DO they care about? Glad you asked…
Buyers care about…wait for it…themselves. I’ll wait here while the shock wears off.
Now that you have your buyer goggles on, it’s time to think about what’s important. What do you care about? How do you get started? How do you choose between the hundreds of homes for sale?
Like most buyers, you will generally take the “last house standing” approach. You start with all possibilities and then slowly whittle down the choices until there are only a few left—then you decide.
With that in mind, here is a list of questions you will need to answer so you can start the search for the perfect home.
- Where should you live?
- City, suburb, or country?
- How much can you spend?
- Ready to move in or “unique fixer-upper”?
- House or condo?
- How many bedrooms?
- How many bathrooms?
- One story, two, or more?
- How much yard/land?
- Pool or no pool?
OK—you’ve got a much more manageable list. Next, you do a drive-by to decide which homes to tour. You set up your showings and begin the task of narrowing the choices even further. The entire approach, from start to finish, is all about that process—narrowing the choices. Please notice that up to this point, you haven’t really been choosing a house—you’ve been eliminating houses.
Most buyers we’ve met do not paint a mental picture of their perfect house and then patiently wait for that house to show up. Most buyers look and look until they figure out which house has the fewest reasons NOT to buy—and then they go for it. This concept is the foundation of another one of our office laws:
Buyers look for reasons not to buy.
Oh sure—sometimes a buyer walks into a house and falls in love. It happens, but usually only after an exhaustive process of refining the mental image of the perfect house. Once the buyer has a strong mental image, the job of finding the house becomes more of a matching game at that point. In short, there are a whole lot of hurdles between “for sale” and “sold”.
Now that you are beginning to understand the buyer mentality, you are ready for the next phase:
How to get into a buyer’s head and make your house stand out.
Jerry Seinfeld used to say that people don’t care what’s on television – they only care what ELSE is on. Jerry’s right and homebuyers are not much different.
Buyers don’t just care what’s for sale. They are pretty much obsessed with what ELSE is for sale. They are so worried about missing out on the perfect house at the perfect price that even after they buy, they keep on shopping.
Therefore, it’s critical that you also know what else is for sale. What’s your competition? How fast and for how much your house sells depends heavily on what else is for sale around you and how you stack up to your competition. You are not selling in a vacuum.
Sellers and agents, during the pre-listing phase, put so much emphasis on “comps.” A comp is industry talk for a home like yours that has recently sold. So-called “comparables” allegedly serve to help establish the value of similar homes in the area. The main purpose of using comps is to justify a price that is already set. While that’s great for the bank, it does nothing for you, the seller.
A handful of savvy buyers may know and understand the recent sales history of a particular area and price range, but ultimately, those buyers are going to decide on feelings and then use comps to justify that decision. Think back through all your major (and most minor) decisions, and you’ll discover another of our many office laws:
People buy on emotion and back up their decision with logic.
So, instead of only focusing on what has recently sold, I’d advise you to focus on the other “comp”: your competition or what else is for sale. That is the pool of homes that will most affect the time it takes your home to sell and the price you will get.
Put on those buyer goggles, get on the internet, and make a list of homes for sale that are most like yours. Anything within a mile or so (could be more in rural areas) and within 5-10% of your asking price is your competition. If that list is too long, then use the list of questions above to reduce the list by things like bedrooms, bathrooms, square feet, etc., until you have a list of 5-7 homes that are like yours.
Once you have that list, get off your couch and go see them. Open houses are fine, but if that’s not an option, you’ll have to get creative (but within the bounds of the law) to get inside them. At a minimum, you at least need to drive by them, but if you can possibly get inside them, go for it.
The more thoroughly you gather information as a buyer, the more successful you will be as a seller.
If you have your buyer goggles on correctly, you will think like a buyer, which means you are looking for a house, and it’s a huge deal. You don’t plan to do this again for a long time, and unless you are under extreme pressure to move right now, you’re going to be very detailed in your search. At the end of the day, it’s about what a buyer can get for their money. How many of their needs/wants can they satisfy with their current budget? If your house stands even or a little below your competition, you will hear crickets. If your house is slightly above, you will get activity (showings, second showings, etc.)
If you are head and shoulders above your competition, you will get the holy grail-multiple offers- and you will get it right now. Not in a month, but right now.
I don’t care how dead the market is or how hot the market is. The tide raises and lowers all boats. You are never going to escape the fact that “what else” is for sale will always be the driving factor behind your level of success in selling your home.
I say all that to say this – stop trying to sell the house with a flyer or a web page. Your opinion of your house and your asking price does not matter. Bad feedback, no feedback, and weeks with no activity are only signs that you have underestimated your competition. Most sellers get mad and try to blame their agent or the idiot buyers.
If the fish are not biting, do you blame the fish?
If you try to get a $350k buyer with a $300k house, you will be frustrated and buyer-less for a long time. If you try to get a $295k buyer with a $300k house, you will have a stack of offers. None of this is earth-shattering information. If you study economics, you already know about the basics of supply and demand and the invisible hand of market value.
What stuns me is that even the most educated people ignore this information when it comes to selling their own homes. Super smart people decide the rules of economics don’t apply to them and their homes. None of us are exempt.
LeBron James could sell his house, and yes, it would be worth more than the other houses around there, but if Michael Jordan decides to sell his house and it’s in the same neighborhood, the competition of MJ’s house would affect how LeBron’s house is selling. Just saying. Nobody is exempt. Nobody.
This brings me to my favorite law of real estate…
The market never lies—not ever.
Not for you. Not for me. Not even for LeBron.
In the end, it’s still a bit of guesswork. Get close and listen to the market. If you are too high, nothing happens. If you’re at or below market value, you will be fielding offers. It’s just that simple. Now, go polish up those gold toilet handles—we’ve got an open house coming up!!
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Ohio Property Group, LLC
Author: “You Can Sell It”
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