If you’re a seller, it helps to understand the mindset of today’s buyer: what they’ve been through and what they’re willing to do — or not do — to get the home they want. Here are six things you should know about today’s home buyers.
1. The ‘crash’ had a big impact
Many home buyers on the open house circuit today may have been out there a few years back. They’re experienced buyers who were searching for a home before the market crash and quickly jumped ship, not wanting to make it into the history books as yet another homeowner whose property was underwater. After the crash, prices seemed like such a good deal. But there was still the fear prices would fall further. Buyers couldn’t bear the thought of signing the papers, only to see the market go down another 10 percent. As a result, they sat on the sidelines for years and are just now beginning to return.
2. New buyers are savvy
Today’s first-time buyers may be recently married, have a stable job or have committed to living in a certain area for the next five years. They have been casually observing real estate from the sidelines. They watch the local news, see real estate stories online, and are in general savvier than first-time buyers were years ago.
3. They’ve regained their confidence
Today’s buyers are confident again about the real estate market. Maybe they’ve been renting the past five years and realize rents have risen too much, that they can actually afford to buy and pay less per month. It’s possible they met with their CPA recently, who suggested they could benefit from the tax savings of being a homeowner.
4. They’re determined
Whatever their background or recent experience, today’s home buyers are coming to the real estate market in a bit of a “herd” mentality. They see reports of markets rising and interest rates still at 20-year-lows. They’ve been pre-approved by their lender. They’re on a mission: get into the market early so they don’t miss the boat.
5. They’ll pay a little more to get in the door
Today’s buyers are forgiving of small flaws in a property and aren’t afraid to pay more to get in the door. Their attitudes, coupled with low interest rates and inventory, are the recipe for the beginning of a sellers’ market.
6. Their blinders are off
Unlike the buyers of 2004 or 2005, today’s buyers have lived through our countries’ economic crisis and market meltdown. They may be serious about buying, but they aren’t going in with blinders.
Advice to sellers
Yes, it’s true the market is shifting back in favor of sellers. But it’s not as easy as throwing your house on the market and waiting for offers to come, as it often was in the boom years.
Buyers, though ready and able, will demand a little more, may negotiate more, or may simply not want to feel they’re being taken for a ride. The slightest feeling of something going sideways can still scare a buyer away. When that happens, you’re left with a property that goes back on the market, which can leave a stain on the listing.
Be open to negotiation and ready to treat the buyer fairly and honestly. Don’t assume you have complete control of the negotiations or the sales process. Be mindful that many sellers have been desperate to get out of their current homes in the past. Many would be grateful just to have a buyer today. And these sellers, for better or worse, could be your competition.