Home Seller Series - 3 types of buyers you need to know about

This article was originally posted on DothanHomeSearch.com

While I'm not inclined to put people, in this case home buyers, into definite, immovable categories, it is important in our business to look at these things and try to help our seller clients determine how to use the information to their advantage. Sellers need to not only know how we attract buyers (marketing plan), but also what appeals to different types of buyers. I saw a presentation this past week that put all home buyers into one of these three categories, so I thought I would talk a little about each of them.

Type 1 - Ready and prepared to buy

These are by far the favorite type of buyer for both agents and home sellers. These buyers have their financing lined up and ready to go. They don't have to finish a lease or sell another property before they can close. They are ready to move as soon as an acceptable property is located. When the right house is found, their mentality is "What will it take for us to get this home?" Type one buyers respond to pricing but are not necessarily motivated by it. They look closely at the intangibles of a property to see if it fits the needs of their lifestyle, and they are often willing to pay a little extra for things that are important to them. These buyers often create competition with other type one buyers on the same home. Unfortunately for home sellers, there is no one attribute your home can have to make it appeal to all these buyers in your price range. Condition and curb appeal are very important. You've got one shot at these buyers, and that is in the first two weeks your home is listed. If your house doesn't have what they are looking for, they move on.

Type 2 - Want to buy

These are the value buyers. These are the ones looking for a "deal". They do want to buy a home, but will always try to determine what a house is really worth to them. And they won't pull the trigger until they are satisfied that they are purchasing something at or below its real value. They will make offers below the perceived market value. Folks early in the home buying process can be this type of buyer before becoming a type one as they get closer to a target move date. As with the type one buyers above, a home sellers best shot at these buyers is when the listing is new. The difference however is that these buyers are more motivated by pricing, which means that homes with no justification for a premium price (perception of value) are not going to get much of a look. Subsequent price reductions can interest these buyers down the road, but only if they are aware of it and have not moved up to a type one.

Type 3 - Just entering the market

These are the folks that have just decided they want to buy a house. They are typically neither prepared nor ready. Their question is always, "Where do we start?" If they are motivated enough, these buyers will end up being type one buyers in a relatively short amount of time. The rest will end up as a "Want to buy" home buyer. This type buyer is entering the market all the time and are sparked to do so for a variety of reasons, including a for sale sign in the yard of a house that really appeals to them. Once the first two or three weeks of a listing are history, and the ready and prepared buyers and the want to buy buyers have moved on, these are the buyers a home seller is left with. Do all home buyers absolutely fall into one of these three categories? Of course not. But the vast majority will, and a working knowledge of what appeals to and motivates home buyers is essential for home sellers in today's market. We will spend some time in the coming days talking about how home sellers can use this information to their advantage.