Who do you think the best buyer might be for your home?
It might not be who you think!
During my first meeting with a home seller it inevitably comes up that the seller has ideas about the best person to purchase their home. It is important we talk about the target “buyer personas” (or ‘buyer profiles” or “buyer avatars”) for any particular property prior to putting it into the market.
Back when I worked in the tech industry I created written “User Personas” to describe the target customers or users of the software or website we were building. I still create Personas (now for Buyers) today as part of my 7-step Process to Price a Home. The detailed personas include the buyers’ motivations, dreams, financial picture, experience in buying real estate, flexibility, their overall tolerance for risk and expectations of home condition.
When we talk about the target selling price of a home I am looking to match the seller’s goals and motivation with the most likely buyer behaviors. The more closely the 2 are aligned, the more likely the home sale process will meet the seller’s goals! If these are not aligned, we will talk about what could be done to match up the two - for example, what if the home was somewhat updated, priced to sell quickly, systems invested in, start the process for renovation approval with town, and so on.
Example Home Buyer Personas
First time Home Buyers
Move-Up Buyers
Resort-area 2nd home buyers
Flippers or rehab specialists
Downsizers or empty-nesters
Real Estate Investors
Home Seller goals
Sell for the highest possible price
Make the most money
Selling home with making any improvements or repairs (AS-IS)
Fastest Closing
Flexibility on when to close or move
Easiest path between offer and closing
What Buyer behaviors more closely align with the Seller’s Goals?
| Seller Goals | ||||||
|---|---|---|---|---|---|---|
| Buyer Personas | Highest possible price |
Most profit | Sold AS-IS |
Fastest Closing |
Flexible Closing Date |
Easiest btwn offer & sale |
| First time Home Buyers | X | X | maybe | X | ||
| Move-Up Buyers | X | X | ||||
| Resort-area 2nd home buyers | X | X | ||||
| Flippers or rehab specialists | X | X | X | |||
| Downsizers or empty-nesters | X | X | ||||
| Real Estate Investors | X | X | maybe | X | ||
As you see it is usually the person who will live in the home who is willing to pay the highest price - a lot of their motivation is their “new home dream” versus being just another business transaction. However the most can go wrong w/ those buyers - they are most likely financing the home purchase with a mortgage and their expectations of the home might be highest. Depending on their situation more can go wrong between their offer to purchase and closing on the sale.
When a home is dated but still functional, sellers often believe the best buyer will be a Flipper or Rehab Specialist. Yes, those buyers want to buy the home however it is unlikely the Rehab Specialist will pay the possible highest price. The costs of renovating are just so high and the margins on making a profit are thin. The Rehab Buyer also has to consider the cost of tying up the cash while the permitting and work is getting done. Time is money.
However, if you are looking to sell your home as quickly as possible or if the home condition is exceptionally deteriorated, an investor or rehab specialist could be the best choice. Most investors and rehab buyers are purchasing the property with cash (versus a mortgage). In addition to a quick closing, these buyers may offer attractive non-financial incentives (i.e. home doesn’t need to be emptied) or take on expenses or tasks that usually fall to the seller such as Title V (septic) inspections/replacement or updating smoke detectors (because home will be renovated anyway).
Are you thinking about selling your home? Let’s talk sooner rather than later about the most likely buyer for your home … and whether that buyer’s behavior aligns with your home selling goals! Give me a call!
Photo by Mario Purisic on Unsplash
