By Nina Dorion
With spring upon us, the real estate market is just lukewarm. With sellers anxiously wanting to sell their homes and buyers still holding off, it is more important than ever to understand who those buyers are, and how best to market to them.
A house is a product like any other for sale. As a product, it needs to be merchandised and marketed appropriately for it to sell. One of the 4 Ps of marketing is promotion. To effectively promote to potential buyers, we must first understand who they are.
According to Canada Mortgage and Housing Corp.’s Canadian Home Buyers Insight report, here’s what buyers look like:
- 49 per cent of first-time buyers are millennials (25-34 years old).
- 40 per cent are married.
- 80 per cent are employed full-time.
- 61 per cent purchased a single-detached home.
- 26 per cent have a household income of $60,000 to $90,000.
- 22 per cent are newcomers to Canada.
- 31 per cent of repeat buyers are Gen X (35-44 years old).
- 59 per cent are married.
- 65 per cent are employed full-time; seven per cent are self-employed.
- 71 per cent purchased a single-detached home.
- 27 per cent have a household income of $125,000 or more
- 17 per cent are newcomers to Canada.
First-time buyers are comprised mostly of millennials who are just starting out, and possibly starting a family, which is likely why 61 per cent want to purchase a single-detached home. BNN Bloomberg reports that millennials are taking on the greatest amount of debt right now. Some may still have student debt, in addition to car loans and the other costs related to the rising cost of living. They are also sometimes dealing with debts incurred from major life milestones like a wedding or the arrival of a baby.
On the flip side, a large portion (31 per cent) of repeat buyers are Gen X, people between the ages of 35-44. While their household income is greater than that of millennials, they too have growing debts, often with children about to head off to university. This group is also known as the sandwich generation because many are taking care of children under the age or 18 while also looking after aging parents.
What do these two largest groups of buyers have in common? They are often stretched both financially and in terms of time. As the representing agent guiding your clients through a complex and highly emotional transaction, this information is important to know. The cardinal rule of selling a property is to view it as a product through the eyes of your potential buyers. So, what do financially and time-stretched buyers want? Let’s examine that.
Because the largest segment of home buyers are pulled in many different directions, they want a house that is move-in ready. This means that they don’t need to deal with any of the hidden issues that can come with an older, outdated home. These buyers don’t have the time or the money to deal with updates and repairs. This is one key reason the cost per square foot for a new construction home is greater than that of a resale property.
What does all this mean for you and your clients who are competing with an abundance of new spring listings and new-build properties in every major region? You need to merchandise and market the property so that it stands out and remains memorable to buyers. Here are key tips on how to do that.
See what’s out there
Take your clients to visit a handful of competitive listings so that they can see first hand what they’re up against. If competitive listings show well, it means that their house needs to show even better. If competitive listings don’t show well because they haven’t made the effort, it creates a great opportunity for them to take the opposite approach. Make sure that their house and your listing stands out so there’s no question that it is the best in the neighbourhood.
Get expert advice
Offer up a thorough consultation from a professional stager. A comprehensive home staging consultation will equip your clients with the information they need to prepare and stage their house. While it’s most often wise to hire a stager to do the work, a consultation will at least give them the knowledge and tools to do some of the work on their own. An experienced stager will provide them with sound guidance and direction based on her understanding of what buyers are looking for and what’s going to get them to connect with the house. An experienced stager sees things that you and the client don’t. They will gladly share all this valuable information during a consultation.
Help them find the way
Preparing a house to sell is going cost some money. But this is the investment necessary to help clients achieve their overall sales objective. Marketing experts know the essentials: A bottle of Coke or a car doesn’t just sell itself. The makers of these products invest millions of dollars each year to appeal to their customers’ sense of taste and desired lifestyle to help them move their products. A house is also a product, albeit one with a much higher price tag.
When a house is well prepared and shows well with the help of a professional home stager, studies show it will sell faster compared to un-staged houses. Home staging shortens the time between listing date and the day an offer firms-up, especially in a slow real estate market.
If finances are tight, get creative and help your clients find a way to get the needed funds. This is where your partnership with a reputable mortgage specialist can come in handy.