Jumping into the real estate market, you have basically become a business owner, trying to sell a product - in this case, your home. Like all small business owners, you need to know about supply and demand, what the current market conditions are, who your target customers are, what the competition is doing and how to properly advertise your product. Without taking a crash course in economics, here are a few tips to help you move your "product" during a slowing market.
Target Your Customers
Who is your target customer? This all depends on the product (house) that you are selling and your target buyer may actually be a combination of different types. No 2 buyers are the same, but most can be summed up as (1) first time home buyers, (2) move up buyers (looking for a larger home), (3) down sizing buyers (looking for a smaller home), (4) relocating buyers and (5) investors.
- A house in an up and coming or trendy neighborhood may appeal to home buyers that are willing to see beyond the updates that need to be made or the community services that may not have made it to your neighborhood yet. It may not appeal to buyers ready to downsize or that have already improved a home in the past and don't want to deal with renovating or updating another property.
- A house in need of extensive repairs and updates may appeal to an investor who is willing and able to do renovations and then resell or rent the property, but may not appeal to first time home buyers looking for that perfect, move in ready first home.
- A condominium or townhouse may be ideal for down sizing buyers but not for move up buyers.
- A house in an area with large lots may not appeal to people who do not want to take the time to maintain a yard or an existing garden.
Knowing who is most likely to be interested in your home can help keep you from taking it personally when it is not the right fit for a potential buyer.
Competition
In any business, you need to be aware of what competition you are facing for your target customers. If you plan to go into business and sell the same product that several other businesses are already marketing, you need to do a little research. As a home seller, you need to consider:
- How many similar homes are for sale in your area? If you live in a subdivision with a limited number of floorplans and a large number of homes for sale, remember that the buyer has many choices - your home is not the only product on the market. Consider how you can make yours stand out from the others, whether it is price or condition.
- What price range is the competition in? This will give you a starting point to ensure you can be competitive in the market. It is always better to be the best value in a neighborhood.
- What condition is the competition in? Homes that have been well maintained and updated will always be the first to sell.
- Are your competitors offering discounts? Consider offering assistance with closing costs or paying the first year of home owners insurance for the buyer.
- Is your competition giving better customer service? Make it easy for potential buyers to see your home! If you only allow showings every other Thursday when the moon is full, you can count on being in business (on the market) for a looooong time.
Advertising
What are the best methods of advertising to reach your target customers? This is not a multiple choice question. In today's Web 2.0 world, the very best method to reach the largest number of buyers is, hands down, virtual advertising. When making any major purchase, most buyers begin their search on the internet, weeding through what they like and don't like based on the quality of information and pictures provided online. Your agent should have an internet marketing plan that goes beyond the tired, old company website and includes virtual tours, virtual advertising, multiple photos and placement in the top search engines.
Supply and Demand/Current Market Conditions
You need to realize as a business owner (home seller) is that market conditions are out of your control. You have no control over the number of competitors (other homes for sale) that you are facing in the marketplace.
The things you DO have control over are:
- PRICE. If you live in a JC Penney neighborhood, you cannot price like Saks Fifth Avenue. The buyers who are looking for Saks are not looking in your area. The JC Penney buyers will quickly pass you by based on your price alone. Pricing your product correctly is the most critical part of your business! Let me say that again...pricing is the most critical part of your business! Too low and you have left money on the table...too high and you will never get to the table.
- CONDITION. Take the time to make your product shine. Clean, paint, clean some more, declutter, clean some more, spruce up the garden and then clean some more. When buyers are choosing between two similar properties with similar prices, homes in better condition will win every time.
- TERMS OF SALE. This goes back to customer service. Are you willing to provide assistance (if needed) to the purchaser? Be flexible in closing dates, if possible. Don't let something small in the overall scheme of things, like a refrigerator, derail your entire sale.
- CUSTOMER SERVICE. Your product cannot sell if your store is not open. Make your house easy to show. Keep beds made, dishes out of the sink and be "on alert" for showings at all times.
When you treat home selling like a "business" and start to think like a "customer", you'll be having that Going Out of Business Sale sooner than you think.
Don't be a sole proprietor...for more information on buying or selling a home on the West Bank of New Orleans, please contact Lisa Heindel, REALTOR®.
Copyright 2007. Lisa Heindel. All Rights Reserved.
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