Get real! 3 tips for helping buyers stop chasing shiny objects
Because they’re often distracted by shiny objects, homebuyers might be missing out on opportunities to purchase with little or no competition. Here are a few things agents can do to help clients adapt their behaviors and increase their chances of success
It’s no secret that crows are attracted to shiny objects. Interestingly, humans are, too. It explains why magazines use glossy paper, automotive paint sparkles, and lipsticks glisten.
It’s not just an attraction to things that are pretty. There is real science behind our desire for things that shimmer and sparkle. Studies have linked our attraction to shininess to our basic need for water and survival. Water, viewed from a distance — sparkles.
Motivated by genetics, humans instinctively move from one shiny object to the next. Consequently, advertisers design new product advertisements to be as “shiny” as possible.
When done effectively, people will be attracted to the product. Add in crowd psychology, and, if the advertising is shiny enough, it may go viral, inducing large groups to migrate en masse to the new “thing.”
Having worked with hundreds of buyers over the years, I’ve seen this principle at work. Buyers look at new listings like bright, shiny objects and rush toward them in hordes. In a hot market with limited inventory, this behavior can be the single largest obstacle a buyer must overcome to secure a home.
When preparing homes for the market, we educate sellers on the “Golden Window” — the period when the opportunity to get the highest price is at its peak (typically the first 14 days). It’s easy to see this in action. The moment a nice listing hits the market, buyers descend in droves. If a home sits there a while, the flood slows to a trickle.
The larger the initial group of buyers, the higher the opportunity for the seller to get a quick sale and superb terms. This is the primary rationale behind effective property prep and why we encourage sellers to make their property as “sparkly” as possible.
While great for sellers, this principle is bad for buyers
If 50 buyers visit a new listing and, from that group, five write offers, only one wins. It’s “survival of the fittest” at its most basic — the strongest buyer succeeds while the remainder lick their wounds in disappointment. Then, as a group, they shuffle off to the next shiny object, adding new buyers as they go. Lather, rinse, repeat.
The irony is that, as they head to the next new listing, they pass homes that have sat on the market a while and “lost their shine.” Instead of considering these properties, buyers who are captivated by the next shiny object, drive by and miss their best opportunity to purchase with little or no competition.
Here are three recommendations agents can give buyers:
1. Take a realistic look at their ability to write a winning offer in the face of intense competition
While every market is different, we frequently see offers written over asking, as-is and with all contingencies removed. Writing offers like this assumes you have additional cash should it appraise low.
In this environment, FHA, VA or buyers with limited down payments have little chance of success. If you can’t compete at the highest level, do not play the game. Focus on other properties instead.
2. Take a serious look at homes that have been on the market for a while
Buyers often assume something is wrong with a home that has not garnered immediate offers. That’s simply not true. There are many reasons properties might not get snapped up. As a bonus, sellers with longer market times are more likely to cut a deal.
3. Monitor properties coming back on the market
Set up auto-feeds to be notified the minute a transaction fails and the listing resurfaces. There is often a brief window of opportunity where a seller is desperate to get back into escrow and the rest of the buyer pool is not yet aware the home is once again available.
While not it’s not rocket science, science is definitely involved, and buyers who understand the underlying motivations are the ones who can adapt their behaviors and increase their chances of success.
Carl Medford is the CEO of The Medford Team.