"This is a great house, in the right neighborhood but I don't want to miss out if something better comes along later. I'm not sold on the granite and I don't love the dining room color" Can't you just hear John Cusack's character in High Fidelity repeating these words….
This spring will be the perfect storm of market conditions. Gen Y and the Millenials have saved enough for down payments to get out of Mom's basement, Gen X has come to terms with the fact that their first houses aren't going to payoff the way they had hoped and they need to sell to buy most likely. Downsizers dreaming of warmer climates have waited all year to list during the busy season and are cleaning out their basements this weekend, and they'll want you to pay a pretty penny for their new carpet that they installed a few years ago. The 2016 spring time market will be impacted by all of the above. Knowing what types of home buyers you are competing with will help you get ahead of the competition.
If you see 40 buyers at a house in the Andovers in the $400,000 to $500,000 range 20 - 25 are casual, 10 are serious and 5 are years from the casual buyer role.
There three drastically different types of buyers out there.
The Savvy Buyer: They are friendly, take lots of photos casually and ask smart questions. They sign in with their real name and number so that they don't miss a call for offers. They are confident, calm and not overly vocal about their love for the house. This is the type to fear, they know the market, know the inventory and have done their homework. They may even bring a contractor or inspector with them to view the house. They won't miss out when the right home comes around. They didn't wake up a savvy buyer, they most likely started as a casual buyer and over time realized they needed to get serious. Having learned their lesson being beaten out they use escalation clauses, waive or shorten contingencies and use the list price as their base. They are your toughest competition. Their lender is on speed dial and they have copies of their love letter to the seller saved in evernote ready to be distributed. Think Brad Pitt in World War Z when he walks out of the room with the pathogens - serious, calm, appropriately nervous but ready and a bit charming.
The Casual Buyer : This is the type you see most frequently when you go to open houses. Even if they come across a perfect house they take a few days to think about it. You'll hear them say things like " It's perfect for us and they'll suggest they are ready to buy" Days go by and they remember they were interested and call to say they are *considering* the house. The savvy buyer saw the house the same day as the casual buyer but they recognized it's value and weren't willing to risk losing it. The casual buyer will most likely be overbid a few times before becoming a home owner. They may even back out of a sale when it feels too real or after the inspector tells them that homes require maintenance. These buyers believe that everyone else is overpaying for houses. Think of John Cusack in High Fidelity. Charming, fun, wants to be a good boyfriend but not yet husband material…. Just as John's character evolved into a great guy this buyer will evolve into a Savvy buyer over time. Today this buyer is your best ally as their offer if they choose to submit one will have lengthy contingencies, low down payments and a low offer amount.
The Day Dreamer: They want a house, can qualify for a house but it will be years before they take the step to the Casual buyer role. These people are no threat to you as a buyer but they do take up space and seem to hang around forever in the kitchen, taking up as much space as possible without meaning to. They ask a ton of two part questions that have more follow up questions. They are nice, polite and pleasant but for one reason or another just not ready to move. Though they want the best for everyone get visibly frustrated when their friends buy homes and feel uncomfortable with change just like Ben Stiller's character in the first Night at the Museum. Eventually through the trilogy Larry Daley evolves too just like this buyer type will. Eventually they will become Casual and then as scary as it is they will get serious and buy.
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Example : I brought this adorable cape on the market in North Andover on January 15th. The open house brought all 3 buyer types out. Within 30 minutes of our first viewing I had about 30 guests through and multiple offers being submitted by savvy buyers. There were strong, serious offers quickly. By the end of the day about 10 buyers expressed their love for the house and that they were going to think about it. A few were clear that they were afraid to act because of the the idea that they were going to miss something if they moved on it - the casual buyer. Two called me last week to ask if it was still available and mentioned they would like to go back sometime in March - the day dreamer. One month later there hasn't been anything as nice come along in my opinion and we are well into the spring market.
Click on the photo to see what high $400's in North Andover looks like, listed for $469,000.