PSYCHOLOGY OF HOME BUYERS PART 2

THINK LIKE A BUYER!

The two most important things to remember when selling your house is to think like a buyer and value is a perception. The following pages will guide you step by step through the process of preparing your home for sale to achieve the highest possible sale price in the least amount of time. Our concentration will be in six areas:

(1) Repairing, (2) Cleaning, (3) Neutralizing, (4) Space Management, (5) Atmosphere, and (6) Staging.

Repairing

  • The rule of thumb is, if something needs repair, fix it! There are probably many things in your home that you have simply become used to over time… things that you have been promising yourself that you will attend to. Well, now is the time.
  • Check all walls for peeling paint. Look for stains on walls especially in high traffic areas. “Touching up” paint never works. Most often it makes the wall look like someone put spots of fresh paint on the wall. Older paint gradually takes on a different color from fresh, so if it needs painting, paint it! Don’t touch it up! Two of the best investments you’ll ever make in your life is to paint and re-carpet your house if it needs it. The return on that money invested will be two times the cost (Where else can you get a 100% return on your investment?), even if you hire a professional. By the way, hiring professionals to do any of this preparation is the best decision, unless you are a professional painter/repairman yourself. You will likely cost yourself more money if you do an obviously amateurish job, and it’s always obvious.
  • Large repairs:In today’s climate of open disclosure and vigilant professional home inspections, the rule is “Treat a buyer as you would yourself. ”Repair any problems with major systems, if possible, or as a last resort, offer an allowance for the buyer to make repairs after closing (absolutely NOT the best option). Always disclose anything that you know about the property. Having been a consumer yourself, you know that buyers will more readily make a purchase decision with someone whom they can trust.

(HOW THE BUYER THINKS):

The buyer will mentally add up the cost of repairing all those minor flaws and end up with an amount that is much higher than what it would actually cost you to repair them.The buyer will mentally subtract that higher figure and estimate a lower perceived value for your property.

You might be saying to yourself, “These repairs aren’t any big deal.”But, the buyer is thinking:

(HOW THE BUYER THINKS):

“If the owners didn’t care for these little items, then what about the roof and the furnace? How have the big items been maintained? And, what about all the other things that I can’t see?” In other words, Home Buyers tend to “HORRIBLE-IZE”.
Definition: Horrible-ize— When a home buyer sees seemingly insignificant repairs the seller has left undone and then imagines much, much worse. Then the home buyer mentally subtracts a much larger imaginary number from the perceived value of the house.

(HOW THE BUYER THINKS):

They see a leaking faucet that needs a 50 cent washer and they imagine the entire plumbing system may need replacing. In their mind, fifty cents becomes four thousand dollars (or more!) to subtract from your home’s perceived value.

(HOW THE BUYER THINKS):

They see a stain on the ceiling from an old roof leak that has already been repaired and they think the house needs a whole new roof. A $250 paint job for the whole room, including the ceiling, becomes, in the buyer’s mind, $5,000 (or more!) for a new roof!

Whatever it is, small things make a BIG difference in controlling the buyer’s perception of value. Two or three “small” things may be enough to cause the buyer to look elsewhere for a house with fewer “problems”. It cannot be overemphasized, needed small repairs and perceived owner neglect will lower the perceived value and lengthen the time required to sell, and may cause it to not sell at all.

Cleaning

  • Every area of the home must sparkle and shine! Each hour spent cleaning and organizing will go a long way to attract the buyer who will pay more for your house.
  • Clean all windows, inside and out. This makes the house sparkle.
  • Clean or replace all wall-to-wall carpeting if it shows wear, and clean or remove area rugs. Clean and polish linoleum, tile, and wooden floors. Replacing carpet is a big issue—AND—one where you can make a very large return on your investment. A buyer, if they will accept worn carpet, with the intention of replacing it themselves, will usually look at a much more expensive carpet than you would have to choose if you are replacing it before marketing the house. The buyer will DEDUCT from the perceived value a lot more than your cost to replace the carpet. A medium grade (not the most expensive, but not the cheapest) is sufficient and will make the house look much more appealing to a larger number of potential buyers. For every dollar you spend on new carpet you can expect to receive $1.50 to $2.00 in return. So, any investment that gives you a 50% to 100% return on your investment (compare to the stock market where a 10% return is considered acceptable) is one of the best investments you will ever make. DO NOT SKIP OVER THIS STEP IF YOUR GOAL IS TO MAXIMIZE YOUR NET DOLLARS IN YOUR POCKET AFTER ALL EXPENSES—AND—if you want to have a much easier and LESS STRESSFUL TRANSACTION. (to be continued).