If you’re considering selling your home either 1) on your own or 2) with the help of a real estate professional, it’s important to understand the different types of the home buyer you may end up working with. Here we will discuss five of these groups out in the marketplace today. Knowing their characteristics and motivation will help you in determining the best strategy on how to negotiate with them, assess how serious they are, and help you decide if you’d like to work with them towards facilitating an acceptable offer (or counteroffer) and ultimately the sale of your home to them.
These five different types of home buyers include the following:
1. First-Time Home Buyers
Their inexperience necessitates the services of an agent to assist them with the home buying process, financing obligations, offers and contract-to-purchase agreements, and closing procedures.
2. Corporate Relocation Home Buyers
Most are unaware of the area, have limited time to buy, and are often contractually obligated to use a certain real estate company.
3. “No Money Down” Home Buyers
These buyers come with a number of challenges. Most importantly, they can only purchase a property for the offer price as long as the appraised value is at or above this value.
4. Move-Up Home Buyers (typically the best of the bunch)
Up to 95% of these buyers are actually sellers whose homes are currently listed on the MLS. They are working with an agent for the purpose of selling their existing homes. After they sell, they become a move-up buyer and use the same agent to find their next home. Their offers to purchase, often include a contingency that they need to sell their current home first.
5. Bargain-Hunter Home Buyers
They often approach private sellers knowing they are trying to save the real estate commission, so they often demand a price reduction equal to the commission. The private seller nets the same amount of money as if he had listed with an agent. The private seller is no better off financially, plus they took all the risk and did all the work.
Your objective is to identify the type of home buyer you’re dealing in order to better understand their motivation, whether or not they will (or need to) be working with a real estate professional, and how best to negotiate with them.
Try to determine the Home Buyer’s motivation:
Knowing this information, at a minimum, will help improve your position in the negotiation. You will know up front who you are dealing with and what you’ll need to do in order to get the result you want.
You can call, text, or email Russ Pence at The Russ Pence Team, RE/MAX Alliance DTC, to inquire about this post and/or if you’re interested in discussing either buyer/seller representation for any of your current real estate needs.