Getting inside a buyer's head!

By
Real Estate Agent with Coldwell Banker Residential

Many agents, when working up a CMA (Comparative Market Analysis) on a property, will go directly to the MLS, and punch in the specifications of the property that they're trying to 'comp'.

In other words, if you're working with a three bedroom, two bath single family home, in the Willard School district in Evanston... they'll look to see what other 3br/2ba SFH's are currently for sale in the Willard District, and what other 3br/2ba SFH's are under contract, and which 3br2ba have closed in the last 3, or maybe 6 months.

This is a good plan, and will tell you exactly how you fare, against another 3br/2ba SFH in Willard.  And many agents stop right there.

BUT.. oddly enough, that's not necessarily how buyers think.  In order to get into their heads, you have to try thinking like a buyer.  (I have tried this Jedi-warrior mind trick, successfully, in other situations... like when my car keys are missing: "If I were a set of car keys, where would I be.....?")

So... just how does a buyer think?  While many buyers may be looking for exactly what you've got... some don't need that precise home.  Many would be willing to accept a one-and-a-half bath... they don't need two FULL baths, they just want the added advantage of an extra toilet.  Others might be willing to look at a nice two bedroom with a small den, since all they want is a place to put an itty-bitty office with their computer.

The next buyer might not care if it's a single-family house, they might be willing to take a townhome with a nice yard, 'cause they have a dog or a child and want some outside space... or maybe they just want to be able to barbecue, but don't want to stand on a two-and-a-half-foot balcony to do it.

And others, might not care if they're in Willard School District, they might be willing to accept Lincolnwood or Orrington.

So you need to open up your search, and see what those homes are selling for with the other parameters that your buyers might be searching for.  Think like a buyer... "All I need is 3bedrooms... what are my options?"

Now, that doesn't mean you have to price your three bedroom, 2 bath like a 2 bedroom 1.1 bath.  But you need to be aware of all of the options that are available to the buyers, when they're househunting, and position your new listing accordingly.

Be smart, don't box yourself in! Look at all the options. You sure don't want the buyer's agents to be the ones telling you why their clients bought that townhouse down the street, instead of your Single Family Home.

(265  -19)
phew, I broke through that plateau!

Posted by

 ALAN MAY, Realtor®
Specializing in Evanston Real Estate and North Shore Real Estate

Coldwell Banker Residential Real Estate, 2929 Central Street, Evanston, IL 60201
847.425.3779      Cell: 847.924.3313      Email: Almay@aol.com

Evanston Real Estate & North Shore Real Estate
Licensed in Illinois

   

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Rainer
18,676
Wade Mattingly
WEICHERT Realtors--Bluegrass Living - Lexington, KY

Ok, I'll admit it.  I don't get the Plateau remark or the (265-19).  Darn newbie.

Feb 09, 2011 11:54 AM #18
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Alan May
Coldwell Banker Residential - Evanston, IL
Evanston & Northshore of Chicago real estate

Christine - true, valuable from the other side, too.

Melissa - you're being kind in saying "sometimes".

Judy - thank you.

Wade - Welcome to Active Rain (and to my blog)... the plateau comment and the (265 19) both refer to this post.

Feb 09, 2011 01:55 PM #19
Rainmaker
600,430
Nancy Conner
Managing Broker - City Realty Inc - Olympia, WA
Olympia/Thurston County WA

Good stuff to consider Alan!  I notice this willingness of buyers to trade off  especially when they have to choose between a newer home on a small lot versus a 70's vintage on a larger lot.  (not that they all trade off in the same direction!).  But for the seller of a 70's house who thinks the larger lot will capture all buyers - disappointment ahead.

Feb 09, 2011 04:01 PM #20
Rainmaker
151,807
Denise Roberts
New Colony Properties, LLC - Pinehurst, NC
e-PRO, REALTOR - Specializing in Pinehurst, NC Area

Alan - I agree with your posts most of the time...AND, this is another one of those times.  You never really know what the Buyer is 'open' to, until you show them something that wasn't on their list ;-)
Different neighborhoods within my town play only a small part in the 'location' game.  So, most of my CMA's/Research is done throughout my entire town.  Cheers to the -19!

Feb 09, 2011 04:04 PM #21
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Karen Fiddler, Broker/Realtor
HOM Sotheby's Intl Realty, 949-510-2395 - Laguna Beach, CA
Laguna Beach & Lake Arrowhead, CA (949)510-2395

So true....it takes a lot of questioning to really understand what the buyer truly wants. Congrats on the plateau

Feb 09, 2011 08:16 PM #22
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Alan May
Coldwell Banker Residential - Evanston, IL
Evanston & Northshore of Chicago real estate

Nancy - plenty of disappointment for all.

Denise - nice opening... and thanks on the -19.

Karen - that's true... it takes a great deal of conversation to learn what a buyer truly wants... oftentimes (as you know) even THEY don't know.  and thanks.

Feb 09, 2011 08:46 PM #23
Rainmaker
277,610
Jack Mossman - The Nines Team in Stockton
The Nines Team At Keller Williams - Stockton, CA
The Nines Team at Keller Williams

Alan - You present an excellent opportunity for the listing agent as well.  My job is to sell the house ... and understandingthe search parameters and how to enlarge the response that includes my properties ... so much the better.  Even with REO properties we try and put as much detail in the mL:S as possible ... because I really want every opportunity for a buyer's agent to find my property ... and the buyer when they are "searching" on line ...

Feb 09, 2011 10:12 PM #24
Rainmaker
215,183
Elizabeth Arduain
The Diamond Group @ Keller Williams - Lubbock, TX
Lubbock Texas Real Estate

Good Points to bring up.  Need to know our competition and what it offers in relation to our listings. 

Feb 09, 2011 11:16 PM #25
Rainmaker
1,967,809
Gabe Sanders
the BlueWater Realty team specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

Absolutely Alan.  There's the CMA or current market value, and then there's the reality of the competition that's out there and what is available.

Feb 10, 2011 07:43 AM #26
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Alan May
Coldwell Banker Residential - Evanston, IL
Evanston & Northshore of Chicago real estate

Jack - that's the general idea.

Elizabeth - true that.

Gabe - and today, the competition is critical.

Feb 10, 2011 08:29 AM #27
Rainmaker
28,505
Fritz Barnes
BizProMedia - Lansdale, PA

Everything you have said is right on. I was going to toss in a comment about the house having to appraise, but then I realized what you are really talking about is moving to a lower price to be competitive with more buyers.

 

Feb 10, 2011 08:35 AM #28
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Alan May
Coldwell Banker Residential - Evanston, IL
Evanston & Northshore of Chicago real estate

Fritz - what I'm really talking about is pricing properly.  If you only use the exact same house to comp against, you might be missing the bigger picture.

Feb 10, 2011 09:11 AM #29
Rainmaker
447,867
Malcolm Johnston
Century 21 Lanthorn Real Estate LTD., Trenton, Ontario - Trenton, ON
Trenton Real Estate

This is one of the reasons why CMAs can be a tricky proposition. Sometimes there's a lot of subjectivity involved.

Feb 10, 2011 09:41 AM #30
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Alan May
Coldwell Banker Residential - Evanston, IL
Evanston & Northshore of Chicago real estate

Malcolm - there's a lot of subjectivity involved. That's why the experience level of the agent, and their instinct and track record is so important.

Feb 10, 2011 10:31 AM #31
Anonymous
Anonymous

If I were Alan May, would I be up at 1:42 in the morning commenting on ActiveRain blogs? Hmmm. Good question. Good night!

Feb 11, 2011 04:41 AM #32
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Alan May
Coldwell Banker Residential - Evanston, IL
Evanston & Northshore of Chicago real estate

Russel - I know I sure wouldn't!

Feb 11, 2011 08:36 AM #33
Rainer
370,054
Tish Lloyd
BlueCoast Realty Corporation - Wilmington, NC
Broker - Wilmington NC and Surrounding Beaches

Boy, oh, boy have you ever hit the nail on the head -- I've tried teaching this to so many of my agents in the past and those who actually engage, come away with a very happy Client.  Nice post -- late to the party, but still had to lean . . .

Feb 11, 2011 11:29 AM #34
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Alan May
Coldwell Banker Residential - Evanston, IL
Evanston & Northshore of Chicago real estate

Tish - always welcome to the party.

Feb 11, 2011 11:35 AM #35
Rainmaker
457,556
Wendy Rulnick
Rulnick Realty, Inc. - Destin, FL
Destin FL Real Estate

Alan - A lot of agents miss the "big picture" when pricing.  Another thing to do if you're not sure about your price - instead of checking criteria - see what else is is for sale in the price range you're coming up with. For example, if you're coming up with $150K and it doesn't seem  right, you might see homes with way more square footage and/or newer, that may not have been in your original search criteria.  It's like double-checking yourself.

Feb 11, 2011 07:10 PM #36
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Alan May
Coldwell Banker Residential - Evanston, IL
Evanston & Northshore of Chicago real estate

Wendy - that's another excellent fail-safe.

Feb 11, 2011 07:11 PM #37
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