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Narrowing Down Is Now Widening Up Choices

This is truly a crazy market. I am seeing trends that I have never seen before. I know it's a true buyer's market, but the last buyer's market, my cleints didn't seem to act the way they are now. It's not so much MY clients, but the agents who work for me.

I just wrote another post about the feedback we're getting that our listings are the buyer's "second choice", but this is what I've been seeing:

It used to be that we would take a client to see everything that looked to be a good candidate for their needs and wants. If they were REALLY lucky, we could find something within their price range that have everything they needed AND wanted, (because no matter how much a person can spend...they always want just a little bit more). Now it seems we have no shortage of things in a buyer's price range that have what they need and want, but instead of "narrowing down" the candidates as we formerly would, the list of candidates grows as we view property. So much so that the Buyers become as kids in a candy store...not able to make their choice.

There's so much available that is on the wish list!

You would think this would make buyers feel lucky and happy that they are able to finally afford all that they have wanted, but have not been able to obtain in the Seller' market, but not so. The Buyers we are seeing are just browsing around blankly...widening their list of possiblities. Anyone else seeing this? One agent in my office has shown this couple almost 40 houses and their Listing just went under contract this weekend for full price, so they have to pick something, but she's concerned about how to narrow them down.

The dream home doesn't seem enough to entice a decision in this market...

Anyone else experiencing this phenomena? I'd love to hear some "narrow down" techniques from you silver tounged angels out there! :-)

Posted by Lania DeMers, Broker Rocky Mountain Realty Co. on 10/08/2007 02:13 AM

Comments (37)

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37 Comments on Narrowing Down Is Now Widening Up Choices

OCT

2007

I think the problem is confusion. When buyers are confused they do nothing.

If a buyer has seen 40 houses, that 35 too many in my book. They all start looking alike and then the buyer gets burned out. I have a email program that I set up for my buyers so they can take ownership of the homes they want to see.

No silver tongue here- sorry- I'm too busy remaining open-mouthed. You are exactly right. Case in point: seeing 7 homes in a price range; one CLEARLY head and shoulders above the rest, but the buyer says, "of COURSE we wouldn't offer full price." HUH? As a buyers agent on occasion (preferring listings) this is just...silver tongues, please comment!

Thanks Laurie...I'm a tried and true BA, too. Only we can feel the pain!

Anyway, Karen...I have an e-mail program, too, but buyers around here are savvy and they don't want to see 5 houses if there are 55 in their price range. They want to MAKE SURE they are getting the best deal, but meanwhile confusing themselves as Brett said...it's a vicious circle!

I have noticed this in Seattle as well...the sense of urgency is not there as much....

Urgency comes when the market for money is unstable - and despite what we hear, money has been costing about the same for some considerable period of time now. In other words, that pressure has gone - so what pressure remains? If they have a house to sell themselves they probably know they are in it for the long haul. I do agree however, with the previous comment. 40 homes is 35 too many.

Buyers have such an assortment to choose from in this market, that it's nearly impossible to make a decision. When they are more serious, (ex. time restrictions) they still take too long to make a move. It's really hard to look at everything in the price range when there is sooooo much out there, and then they all start to run together. I am experiencing the same dilemma with my buyers.

Thanks, Simon. I don't know what the market is like there, but here EVERYONE has MLS access and everyone wants to see what they want to see. They save homes in their portfolio and I am not going to tell them, "Yo, I'm a delicate genius, here...these are the 5 I'm willing to show you..." Avg. days on market is over 90 here... It's not pretty.

Of course, there are the faithful, (my clients that I am so grateful for). If I tell them they won't like 35 out of the 40, they will believe me because of our relationship...but that comes with time.

Yes, Diane...seems like you and I are in simialr markets. Did you ever bring a child to Toys R Us? They just CAN'T choose! You have to put a time restriction on them and finally say, "We're leaving in 5 minutes, so hurry up and pick..."

I agree that there's no pressure on buyers to buy. Mortgage rates are stable, inventories are high and price changes are frequent and sometimes large.

For the people who looked at 40 homes, and are having trouble narrowing the list now that they have an offer, they JUST became buyers. They have different eyes now because they do have a deadline. I can't tell you how many times I've 'casually' shown a house here and another there while their house is on the market, and there was nothing that rang their chimes.

But the minute we had an offer and they were buyers rather than lookers, we found the perfect house the 1st trip out.

Good post.

I saw this same type of market in the early 90s. Now that the buyers have the advantage, they cannot be rushed and they know it. Do your best to be on the same page as the buyer so that you can potentially reduce the amount of time spent "shopping". If your buyer sees something they like, find out from the seller's agent how much activity there's been on the house and do your best to create a sense of urgency. There aren't too many things to say or do when the buyers have this advantage.

I once knew an agent who showed a buyer ~100 houses over the span of nearly a year. Her approach was that she knew he'd eventually buy and that when he did, she was the one who would be there to sell it to him. I guess that's better than not having a client - hang in there.

Thanks MAX! I think you are correct and the agent had a great attitude. I think I'm spoiled now, (after 12 years) and I don't want to show 100 houses anymore...but I have some newbie agents who wouldn't mind at all. It's a market where we get to see who is in for the long haul! You're correct in saying that there really isn't much we can do or say...I was joking about the silver tongues...but hoping for some insight.

OCT

2007

Buyers have too many choices. Like others said they are confused. Here's what I told my broker:

It's like taking a 10-year-old across the country to Disneyland, for the first time... you tell them they have 2 hours. What would they like to do?

Of course, 99% are overwhelmed, and cannot make ANY choice.

When the inventory is high they are going to want to see them all to make the right choice.

I would sit them down and plan on how many homes you are going to see. The Internet has many nice ways to present the homes and not drive all over looking at everything that moves.

Okay here is my suggestion. If you are showing 40 houses that is too many.

The Gimme Five rule is a good one to follow.

Using e-mail send a customer five choices. Ask them to pick the best one.

If there are 40 homes send in groups of 5.

Do not send them all at once. Send only five at a time.

That narrows it to a handful of homes. Say 10.

I take my customers out to breakfast. I have a pile of 5 listing sheets and 2 red markers I give to them along with a route map which highlights the homes we are going to view on a clipboard.

I usually say something like: "We have done an excellent job of eliminating ones we didn't like before today. Which means "The house" is somewhere in this pile. I do not know which one it is going to be, but YOU Will when we see it. We will be looking at these homes today. You will be grading the homes on a scale of 1-5"

Ask them to write down the good, the bad and the ugly. Rate the house on a scale of 1-5 Five being the highest and best.

Pick the best one. Have them draw a RED line through the listing sheets on the ones they do not want.

Have them crumple up the red line sheets and Throw them away. I provide a complimentary litter bag for the discarded sheets.

Gimme 5 the second time

Pick the best one

Throw the rest away.

Which of the best is best?

That narrows the choice to two.

Your first choice or the last best choice?

By throwing the rest away, the customer is always dealing with just 2. Of the two, one is likely to be better than the other.

Break for lunch.

Go back and Compare A & B.

*I also provide the multi-gallery interior shots with the customer synopsis prepared in advance so they have as many photos of the potential "right house" as possible. As they compare the 2 remaining homes they have the inside photos right in front of them.

Having customers become active role "players" eliminates confusion. As "judges", grading the homes, allows them to be critical, and eliminate ones right off the bat which do not meet their expectations. Once they have drawn a line threw a listing, having them physically crumple the sheets, doing this takes those properties out of play in their minds and allows them to focus on the best of the best of their remaining choices.

The game format has worked extremely well for me. It has narrowed the field instantly. And it has made the home buying process FUN and enjoyable as the selection continues to narrow. We stop after 3 and have a beverage break to discuss the one they liked the best.

As the litter bag fills, they feel they are narrowing down the choices to "The House" it is a visual reminder as well.

You can drag them around all day, or you can make it an interactive experience by allowing them to "judge" competing homes. Customers are usually more verbal when they are participating in an active role.

This method has been highly effective, and the customers have reported that really enjoyed the process of elimination.

It really is effective in eliminating buyer confusion as well. At lunch you can discuss the things you want to include in the offer. It is a mind set.

Good luck and sell well!

WoW, Allison. I am soaking that last blog comment right to my core. It seems like the real estate version of the Ben Franklin technique. It seems I am constantly deliberating over so many issues. i.e., advertising techniques, whether to join a firm or continue as Independent and build my own team.... Sorry, I digress. I have worked with a couple of female executives that took a long time, a lot of patience, but bought when they were ready. I had a family I showed one home and bought that one. Ahhh, the spice of life

I know what you are saying. I have 2 truly great listings, and the feedback is just nasty, things like, the location sucks, OK you knew the location before you went, I cannot move it, the price more than reflects location, or this one I have been getting on another one, to close to the road, well excuse me, but this house is set back further than most of the homes on that road, I go on to ask, how long have you been selling real estate in the area, the response is 25 years, OK so I guess you don't know James Street well, response to me is I know it like the back of my hand, I say so what is the real reason, the Realtor hangs up on me.

but was I out of line, she says she knows the street very well, but yet ...

One question I ask my buyers after we've found what I believe is everything they've been asking for in a home: "How will you feel if someone else buys this home?" That usually narrows them down quickly as to putting in an offer or moving on to the next...

I like the "process of elimination". We see 2 homes. "which did you like better?" Number 2? OK number 1 is now eliminated. Ask this question after every home you show. Also ask "Are you ready to write an offer on this one?" Keep this going until there is nothing left to see.

Cheers,

David Swierczynski

It is hard to narrow down, especially with first time buyers. I do think it helps if you can really probe up front as to what they really want.

The major problem with buyers and feedback right now is as a list agent you have NO idea how qualified those buyers are..that's why I hate calling for feedback.

In working with your own buyers, analyze their needs and take them on an expedition ONCE. Even with 29000 listings out in our region with only 2K selling monthly, there really isn't much that satisfies their needs. If they REALLY know how to communicate you should come up with 2-5 listings that fit their needs and take them to go look. They should make a decision.

Here's the deal in our market, if someone is ready willing and able and need something NOW, you can take out short sales and foreclosures. Then you take out tenant occupied properties that are hard to show. Then you look at the tax records and find the listing is entered wrong. Then, really you virtually have almost nothing left to show. Show and sell baby!

I can relate I can relae - This has become my daily dilemna. As soon as we narrow down the search to 2 possible properties more properties become available.

This is why I prefer to work with SELLERS - I don't have to guess at what they want or what is going to MOVE them!

I am having the same problems with the Few buyers I am working with right now! I notice that when I have taken my buyers in open houses, they and I are practically tackled, questioned and mauled by the agent holding the open house. This is really bad for buyers to see - desparate agents!!

Wow! Everyone has great feedback and all sorts of opinions! I know all the "narrowing down" techniques, but the buyers in Colorado Springs are just not that easy to narrow down. If I try to show them 5 houses, they say, "Well...we're in no hurry after all and there are hundreds of homes in our price range..." They are correct. As of today, we have 7,796 active single family residences in our little town of less than 400k...not including FSBO's and builder inventory.

Buyers come equipped with magazines and saved e-mail profiles full of houses they want to see "over the next couple of weeks". I assure you it's not that I don't know HOW to narrow down a buyer, but they want to see what is out there and the amount of what's out there keeps on growing.

I have asked, "how would you feel if we lost this one while we were out there looking at something else?" The general response is "there's plenty of fish in the sea!"

Have a great day!

Great comment, Allison.

I always meet the buyer(s) at my office and we review what their housing criteria is and I really get them focused on what's important to have vs what they'd like to have. I also find out what items would competely rule out a property.

I don't know how someone can make a decision in looking at 2 - 5 homes. Yes, a lot of homes can be eliminated by doing searches on the Internet, but even I would look at more than 5 homes for myself. Photos can often be deceiving and it's hard to get a feel for a home. Yes, 40+ homes I feel can be on the excessive side too, but you have to constantly question the buyers about each property and if something becomes a turn-off, then don't show more of those types of homes.

Great comment, Allison.

Buyers are not "jumping on the best house" because it just doesn't feel right.

What I've noticed is that relocating home buyers who don't know our market are looking at a number of homes and selecting the one they like the best in their price range.

Local buyers, however, know what their friends and relatives got for their money and our buyers are seeing that they can't get into the same neighborhood, the same school district, the same size home, etc.

Until prices come down and folks can get real value for their qualifying price range, they'll keep looking.

Folks don't live in a cocoon. They see the great homes folks bought back in the late 1990s. Now, our buyers can't touch those neighborhoods with the prices today. So, they're just sitting and waiting. I don't blame them.

Our market is not going to improve until home prices come down. Sellers can sit on those prices as long as they wish. A lot of buyers are sitting too. I've got a backlog of about 20 buyers that I'm watching the market for and when I see a break in pricing, I'll get them out to agents.

I agree with Allison, but sometimes the client want to see and see and see. So, do you lose the client or work the client the way Allison does? I would like to try Allison and be confident and not show so many homes.

Then Lenn knows it right the buyers are the problem they do not know what is a good and bad buy right now.

Part of the problem is getting the clients to believe in their own judgement - if a client is not committing part of it is that they wonder why somebody else hasn't bought this home if it is so good. Trying to get them to believe in themselves and helping them to see what is good value might help them to make a decision.

We are seeing that buyers no longer have to compromise - they can get everything on their wish list. And yes, definitely they can get Analysis Paralysis.

I spent over 3 weeks with a client because of this same phenomenon, "I know this is what I said that I wanted, but there are SOOOOO many other choices." We finally made an offer (accepted) but only after spending 4-6 hours 3 times a week. I wouldn't have done this in any other case, except that I'm hearing this as the norm, and not the exception. I'm glad I didn't end up being a glorified taxi driver, but I sure felt like one!

I believe the issue with buyers, at least in my market, is that they hear the media hype and think that the market hasn't bottomed yet and are afraid to make a decision. God forbid they don't buy at rock bottom prices. If by some chance the spring market and prices starts off at a good pace then there are going to be some sorry buyers around.

Everyone is making great points. I tend to agree with Lisa...things are going to be picking up eventually and some will wait too long to pull the trigger.

I'm with ya Lenn...only the relocation clients are jumping on a house the first or second time they go out. I also use the process of elimination with buyers, ending up with one favorite after a day of showing about 7 homes. The problem is they still don't want to make an offer even though it's the best home of the bunch in that price range.

What I'm hearing from other agents on a couple of my listings is that they are the VERY best out there in the price range BUT their buyers are comparing my totally remodeled home to fixers and they want it at the fixer's price.

It seems like a log jam out there to me.

Get your buyers to make choices. I often get my buyers to pick between this and that. After they pick one, they have to stack the next one up against the winner. I do this while we are looking at the sheets (to get them prioritized) and also after seeing a house. We establish a winner, and work towards an offer for that property.

OCT

2007

Many great suggestions. I would say narrow the search each day and have the buyer pick the best one thay have seen on that particular day.

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