“How long has the home been on the market?” That’s one of the most common questions buyers ask about a property.
If it has lingered for some time they typically want to know why it hasn’t sold. Some common follow-up questions are:
- What’s wrong with it?
- Why is the price so much higher than similar properties?
- Does the seller really want to sell?
- Why are they selling?
- Have they had any offers?
Typically price is the issue or more accurately, overpricing.
So the Buyer Pool Shrinks Dramatically
When a home has been on the market for a long time, naturally, buyer interest and confidence in the home wanes, sometimes dramatically. As a result, buyers typically disregard listings considered to be overpriced. One study suggests that about 62% of buyers said they would not look at a home they consider overpriced. That leaves 38%, a vastly reduced buyer pool.
REALTORS®, as well, tend to downplay homes that are too costly to a buyer they’re working with. They consider it a waste of time, and they have also worked to establish a relationship of trust with the buyer, something they value and don’t want to lose. What’s more, if the Buyer signed a Buyer Representation Agreement, the Realtor has a duty to advise the buyer of home values. Lastly, buyers expect professional counseling. This adds to the shrinking buyer pool that look at homes considered overprice.
Our Information Age and the Educated Consumer
More than ever, buyers today work to establish a basis of knowledge. They take the time to learn what’s on the market and to narrow down their choices. They’ll search the internet, drive by homes and neighbourhoods and attend open houses. At this stage in the buying cycle they often shop and compare on their own, before meeting with the REALTOR®. It’s common at some open houses to hear the phrase, “Too high,” repeated by attendees. In part, comparison shopping gives buyers a good sense of property values.
Yet Buyers Have Their Own Roadblocks to Get Through
With exceptions, even competitively-priced homes can present a buying challenge. In spite of the time and effort in gathering information, human resistance can cause a buyer to frustrate their own attempts to buy a home that represents value, such as:
- A fear of overpaying or making a wrong decision;
- Worry about what others might think;
- A buyer urge to find and acquire a bargain;
- An initial impulse to test the seller with a low offer;
- Anxiety of feeling over-extended with the mortgage.
Such buyer impulses can be overcome with the help of a trusted REALTOR® and Mortgage Agent, who want to help the buyer make a good buying decision and create a customer for life.