How do you sell houses in a buyer’s market?
The first rule of all communication is: “Know your audience.” To sell homes in 2008, you need to know…
- who the buyers are
- what buyers want
- how buyers think
- where to find them
Understanding home buyers—in the first down market of the Internet age—is critical to selling well in 2008.
If you don’t understand today's buyers, you win the booby prize -- having your houses languish on the market for 100-200 days with no offers—despite all the “drastic price reductions” along the way.
Here’s what we know about homebuyers in 2008:
- They are all looking for a bargain.
Whether buying a $3 million home or a $300,000 home, all buyers in 2008 are looking for a bargain. Period. After all, isn’t that the point of buying in 2008? Isn’t that why they waited until now? The “correct price” for listing a home cannot be based on recent past sales (“comps”). Home prices are falling from month to month, and you have to be ahead of and below that falling line.
- They are almost all using the Internet.
Over 83% of home buyers are searching online for their next home. The Web is transforming every aspect of buying and selling homes, and thus redefining the role of the Realtor. If you want to sell in today’s market, you better know how to leverage the Internet—how to get your message out to as many people as possible, as fast and as cheaply as possible.
- They are smarter than the average bear.
Today’s qualified buyers deserve a lot of credit (pun intended). They waited patiently for the market to turn—for inventory to go up (so they’d have more choices) and prices to go down (so they’d get more bang for their buck). They kept their credit scores clean, and saved up for a decent down payment. Their old-fashioned fiscal virtues seem like a brilliantly new idea.
- They are ready, willing and eager to buy.
Analysts are talking about “pent-up demand” for housing. Attendance at SFV open houses has been increasing. After patiently waiting on the sidelines for a long time, many buyers are now coming out of the woodwork, finally ready—and eager— to make serious offers. If you price your home correctly, you may be surprised how many buyers there are out there.
- They’re having a hard time qualifying for loans.
The mortgage crisis is getting worse. Banks are requiring a 20% down payment, 700+ credit scores, “full-doc” proof of income…and still it can take 2-6 months to close escrow. On the other hand, interest rates are still incredibly low, and—best of all—the FHA has increased “conforming” loan limits in L.A. from $417k to $730k. Qualifying buyers will get mucho bang for their buck.
The bottom line?
The buyers are out there. If you price your home right, and get the word out quickly via the Web, they will come, and you will sell—and you might find yourself with a bidding war in a buyer’s market.
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