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http://www.680homes.com/blog/2008/04/18/what-buyers-care-about/What Buyers Care AboutPost on Friday, April 18th, 2008 | Permalink It is always amusing when Realtors meet with potential sellers, and the conversationaround pricing is often filled with comments from the seller such as “I want X amount for my house” and “my house is worth X because the house around the corner sold for Y,and mine is nicer”. And Realtors, sometimes under pressure to tell the seller what theywant to hear, chime in with “yeah, I think you can get X for your home! It ismagnificent!” or “yeah, the market is slow, but looking at your home, I’m thinking it isworth Y”. Often, Realtors and sellers get into a kind of “groupthink” situation where eachone reinforces the other, and before you know it, they have worked each other up into afrenzy. The only problem is that there is one party who is a huge part of the equationregarding the value of the home, and their point of view is usually not represented inthese meetings of the mutual admiration society… I am speaking of course about buyers.And guess what? Surprise… they usually have a totally different opinion about the valueof your home.The fact of the matter is that it is the opinion of the buyer that counts the most. They arethe one(s) writing the check, so you must see the market through their eyes if you want tosell your home in this market.Price Vs. Value. You see, all the seller and the realtor can do is set the asking price for the property. They can not set the value. The value is determined by buyers and thestrength of the market in that price segment. So the seller and Realtor might agree to setthe asking price of a given home at $900,000, for example. But if they receive no offersand very little interest after 30 -60 - 90 days, then the value of the house is not $900,000.So if buyers ultimately hold the power in determining the value of a home, it makes senseto try and understand how buyers view the market. What is the mood of buyers today?What is important to them? What are their concerns? So here are some things that buyersthink about when evaluating a house in this market.How Long has it been on the market? This is the first question buyers ask about a homewithout fail. Why? Buyers want to gauge how much “room” there might be in the asking price, and how desirable the house is to the market in general. If the answer is “90 days”,then the buyer will generally assume it is overpriced, and mentally discount the value of the house. Or worse yet, buyers will ask themselves “what is wrong with this house thatno one else is interested in it?”. Either way, it is not good. Of course, if the price hasrecently been reduced, it helps reduce the impact of this question. If the answer to thequestion is “3 days”, then the buyer knows that there is likely not as much room in theasking price, and will need to be fairly aggressive in terms of the offering price if theywant to make an offer. The fact is the seller’s position weakens the longer the house stays
 
on the market.I don’t want to be a fool. Buyers, whether they verbalize it or not, are afraid of making amistake. No one wants to buy a house for $900,000, only to find out it is worth $800,000six months or a year later. In a soft market like this, buyers need to feel somewhatinsulated against future price erosion. Translation: buyers want to buy your home at agood enough price that the market can slide some more, and they will still feel okayabout it.It needs to be as close to move-in condition as possible.. To have success in this market, buyers have to be able to move in without having to do a lot of updating or work. Buyers just don’t seem to be in the mood to buy homes that need a lot of work, unless it is at asubstantial discount. So carpeting should be new or newer, paint should be fresh, andthere should not be any repairs or touch up items needed. Sellers in this market need toeliminate as many possible buyer objections as possible before the home goes on themarket.The value has to be justified. Buyers have to be convinced that the price is justified byhard data. Comps or comparable sales are great. The only problem is that sellers tend togravitate towards the sales at the higher end of the spectrum, and guess which sales the buyers tend to give most importance to? The lowest ones, of course. It takes a seasoned professional to explain both the high comps and the low comps to the buyer so that theycan be reasonably certain that the value is there for that home.If it’s not near perfect, I am better off waiting You can’t blame buyers. There has been anonslaught of negative media attention on the real estate market, and the economy. Thisleads to insecurity and uncertainty on the part of buyers today. So if the house is notexceptional in terms of value, or close to perfect in terms of condition, buyers often revertto waiting.It takes strong value in today’s market to get buyers to act. Your home has to stand out inyour price segment in order to attract the attention of serious buyers. Smart sellers knowthat they have to leave some money on the table if they want to sell today. Now that we talked about what buyers care about, here are some examples of what buyers don’t care about:* How much the seller “needs” in terms of the sales price. Adding the phrase “becausethe seller really needs the money” to an ad will have zero impact with buyers. They don’tcare.* How much potential there is. Buyers buy what they can see, and they buy what the property has now. Buyers don’t generally assign much value to the fact that you couldadd a guest house, pool, sports court, or family room addition for example.* The seller is offering a credit of $50,000 to remodel the kitchen, or baths, or flooring,
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