Why on earth would you want to know more about who’s looking at homes? Simply put, to help you sell it! The more you know about the types of buyers in the market, the better prepared you and your Realtor will be to package your house for sale.
In real estate there are some commonly used classifications that cover the bulk of home buyers. They are First-Time Home Buyers, Trade-Up Buyers, Trade-Down Buyers, and Empty Nesters.
First-Time Home Buyers:
More than one-third of all home buyers fit into this category. The homes they look for are modestly priced, often just enough to get them out of an apartment or other rental. This first home will hold them until their family or finances begin to grow and stabilize.
Coming from a rental situation, their requirements are privacy and storage space, although the true motivation is pride of ownership and getting away from paying rent.
Because this is a new experience for them, they’re more nervous about buying than someone who’s done it before. A special effort has to be made to assure them that they’re considering a sound investment, which they’ll have no trouble selling in later years.
Usually when you work with a first-time home buyer, financing is the biggest obstacle to getting the house sold. The key to this transaction is a great mortgage lender. Many people in this group who actually could buy your property don’t believe that they have enough money or good enough credit to own a home.
Trade-up Buyers:
This group is typically well-established in their careers and has stability in both their professional and personal lives.
With today’s economy and the influx of Internet entrepreneurs, many of these families are getting to this stage in their early 30s. Bearing in mind the shrinking family size, the trade-up buyer is motivated by prestige; therefore curb appeal and nice neighborhoods are high on their priority list.
Their principal goal is to find a larger home. Specific features that this group considers important include a formal living room with a separate family room, a formal dining room, extra closet and pantry space, and an impressive entry.
Price is not as important to this segment as the size of monthly payments, a motive that provides the opportunity for creative financing.
Trade-Down Buyers:
As the baby boomers head toward retirement and life span lengthens, there’s a growing category of buyers who are moving from large homes to smaller ones. This group includes those who because of divorce or financial difficulty have decided to move into a more manageable space. The other component is the people whose children have grown up and left a home that has become too large for two people – the Empty Nesters.
With the prevalence of divorce, there’s been an increase in single-parent households. Trade-down buyers often have the emotionally difficult task of facing a cut in their standard of living. These buyers want to have the shock minimized by being offered similar lifestyle statements provided to the trade-up buyers.
Empty Nesters:
Nearly 60% of people 55 and older who plan to move, do so to smaller homes. They want lower cost and maintenance, better security and more convenience.
They also prefer a more casual living space. They would opt for a great room over a formal living room and they prefer a combined kitchen and eating areas.
By emphasizing different features of your home, you can appeal to the special needs or desires of each market segment.
The unique skill of the Realtor is to match a home buyer with a home seller, so they both get what they need and desire out of a home. Chances are, as a seller, you’re also in one of these categories. What are you going to do after you sell? Move into a larger home, or move into a smaller one?
