How to Market Your Home to the Right Buyers

Estimated reading time: 8 minutes

When you’re deciding on an initial listing price for your home, it’s important to understand how buyers think and act, and the pricing of your home will be one indication that you do. While your goal is to attract as many buyers as possible to your home, an experienced agent will recommend that you attract the right kind of buyer based on a number of different factors. Continue reading to learn what those factors are and how they affect the pricing and presentation of your home on the market.

In broad terms, a group of ready and able buyers is called a “Buyer Pool,” and although it may vary during the year due to holidays or weather, the number of buyers in a buyer pool remains relatively constant. When buyers notice a home with a price close to their budget that meets their needs, they will check it out and be motivated to make an offer when they see value in purchasing that property. But who is in that buyer pool varies based on many factors. Let’s take a look at some major groups within the pool of potential buyers and their characteristics.

HOMEBUYER TYPES
The table below highlights the main characteristics of major groups within the buyer pool. The Experienced Buyer makes up almost 60% of the total buyer pool, while 34% are new or first-time buyers. The remaining buyers are either downsizing, investing, or looking to purchase a second home.

EXPERIENCED BUYER
Represents about 59% of the home buyer pool;
Acts quickly when a new home that meets their needs becomes available;
Is pre-qualified or pre-approved for a mortgage;
Has reviewed most, if not all, properties on the market;
Generally looks for larger homes for a growing family;
Is very familiar with the current market prices;
Often requires a contingency to sell current property.
NEW
BUYER
Represents about 34% of the home buyer pool;
Has smaller down payment & limited knowledge of the financing process;
Has a harder time compromising on features;
Has a limited understanding of market values;
Needs time to thoroughly evaluate properties on the market;
Generally purchases smaller sized homes;
Is reluctant to make offers quickly even when the house meets their needs.
DOWNSIZING BUYER
Represents about 7% of the home buyer pool;
Looking for smaller homes with minimal maintenance requirements;
Reluctant to compromise on key required features;
Is very experienced in the purchase and sale processes;
Usually requires a contingency to sell current property;
Usually wants a low or no monthly payment;
Takes their time to find the right home & neighborhood.

Sources: NAR Profile of Home Buyers and Sellers, 2022 Home Buyers and Sellers Generational Trends, Bank Rate

Knowing the types of buyers who are in the market at any given time is important, as is understanding what properties those buyers are hoping to buy. Besides specific property features, many other factors, such as affordability, livability, proximity, and motivations, will influence how much interest your property will attract.

PROPERTY FEATURES

Features: Do you know what’s trending today? While it may not be possible to make large changes to your home, there are plenty of smaller, less expensive upgrades that will make a big difference. Upgrades suggested in this article, How to Make a Big Impact on a Low Budget, can be worth the effort to make your home stand out. Try to highlight the most important features in your home and downplay the rest. For example, if you have a great view out of a patio window, leave the window coverings open. If you have a smaller bedroom, reduce the number of items or the size of the bed. For more information about what buyers are looking for, read “The Eye of the Buyer – What Today’s Homebuyers Want. “

Sources: St. Louis Fed, Macrotrends, Multpl

Affordability: As you can see from the table above, home prices, interest rates, and monthly payments have increased considerably in the past few years. Average monthly income, however, has not. As a result, it is becoming increasingly difficult to afford a home, and the overall buyer pool may be shrinking. Try to be flexible with buyer offers that include a percentage paid toward closing costs or points, and expect some offers to fall through as the loan underwriting process is finalized.

Livability: How livable your home is, is relatively subjective and ultimately depends on the person looking at it. What may be a charming office area up those narrow stairs could be a hazard for an older buyer looking to downsize. Your meticulously manicured lawn & landscaping might look like too much work for someone who travels a lot for work. Regardless of these types of personal preferences, your home should not be in disrepair or so cluttered or dirty that buyers can’t picture themselves living there. To help you better understand how to prepare your home for the market, read “Staging Your Home to Impress Buyers”.

Proximity: Are you close to shopping, schools, services, and other activities? As of 2021, 56% of buyers report that this is a continued high priority. If your home is not close to local amenities, consider marketing terms such as “private,” “relaxing,” or “hidden” in your listing to attract those buyers who may not value proximity as much as other buyers.

HOMEBUYER PSYCHOLOGY
How a homebuyer prioritizes and acts on emotion are key components in the purchase of a home.  According to RealtyBizNews.com, a study found that:

About 33% of buyers cried at some point in the process.
Half of all buyers experienced significant anxiety.
At least 44% felt nervous throughout the entire process.
And 20% thought it was the most stressful life experience they had up to that point.

Keep this in mind as you try to position your home for the right kind of buyer and read about additional factors that play into their home purchase.

Motivations: 72% of buyers reported a need to move because of a life change. The breakdown of that is as follows:

Expectations: Buyer Expectations of the housing market can change quickly, creating problems for a seller who is waiting for the right buyer. Markets can quickly shift from a seller’s market to a buyer’s market and vice versa. In addition, uncontrollable factors such as interest rates, job security, and savings will play a role in what buyers expect to be able to purchase.

Timing: As noted above, the majority of buyers have gone through the home purchase process before, meaning this won’t be their first purchase. As a result, they tend to know what they want, have a fairly good grasp on what fair market prices are, and are usually ready to make an offer when they see a property that matches closely enough what they want.

Waiting for “just the right buyer” to come along or starting with a higher price to try to get more than the property’s market value most likely will result in eventually settling for a lower price. For every day a home is on the market after the first three weeks, potential buyers start to make lower offers. That’s why the first few days on the market (DOM) are critical. For more information on how a longer DOM may result in lower offers, this article explains it in more detail.

SUMMARY
With so many variations, how do you know which group of buyers you should consider in marketing your home? The answer is surprisingly simple – as many as you can! Your home will likely be purchased by the same type of buyer you were when you bought it, but that’s not a certainty. There is, however, a 59% chance that it will be purchased by somebody who has purchased a home before. Therefore, it’s in your best interest and to your advantage to focus on the experienced buyer group when positioning the initial listing price for your home. 

NEXT STEPS
The best way to know what that initial price should be is to request a no-obligation Comparable Market Analysis (CMA) from a broker. This is where I can help you start without wasting valuable time. A Comparable Market Analysis (CMA) provides a great context and starting point for a reasonable listing price for a home such as yours in your specific market. Understanding the supply-and-demand aspects of the market will also help you price it appropriately.

I am ready to discuss with you these lesser-known facts that many sellers and agents may not be aware of until the opportunity for a sale has passed.  Working with me can result in higher offers in the first days that your home is on the market and less worry on your part. My extensive knowledge of the home selling process and experience with these various tools will help you understand the steps that will bring you the best results on the sale of your home!

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