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investors

How to Attract Bad Buyers

Poor marketing attracts one type of buyer the most: predatory investors. We mentioned in an article on common home showing mistakes some of the negative effects of the timeless showing mistakes sellers can’t seem to stop making. But those house marketing mistakes can have even further reaching effects.

Consider the investor (Know your enemy)

Investors and primary home buyers alike often see For Sale By Owner (FSBO) homes as potential steals. Let me tell you more about that mindset so you can protect yourself. When I walk through a FSBO house as an investor, I see opportunity for getting a deal. When your untrained dog jumps on me and leaves me covered in dirt and saliva, I smile. I know that Spot is doing the same thing to all the other possible buyers.

Common seller showing mistakes have this effect as well. When you gab about your home, the investor pays close attention. You are, of course, required to disclose any problems and traditionally, buyers have a right to home inspected. But your level of detail in going over your home’s history, discussing the in’s and out’s, nooks and crannies, really only gives me more ammo at point of negotiation.

You’ve now given me, the investor, reasons to make a lower offer and chip away at your resolve for the next six months knowing that you are not optimized in your marketing.

Let’s dig a little deeper. When a FSBO points out a home upgrade they’ve made as a selling point, I inspect the quality of the (often) shoddy work done by the “Will work for $5 an hour” sign holding laborer outside the Home Depot or just as likely in the case of you selling your home FSBO, you did the work yourself with a trip to Lowe’s and a YouTube video tutorial.

At the end of the day, your level of detail pointing out the good, the bad, and the ugly, hurts you and helps the investor in two key ways.  It helps me understand you and her perception of the house and I can use that when we negotiate on price. In one way, I get to make mental notes of problems based on my high and stringent standards. Secondly, it gives me opportunities to correct you, to turn something you see as a lovely part of your home into a negative.

The solution (your best defense)

While investors are looking for a deal, calculating and removed from the outcome in negotiations with you, they may be playing the same game on 20 to 100 other properties. In contrast, buyers looking to move are more subject to emotions in their selection process, just like you are in the selling process.

This might all sound obvious but the effects are not. Real estate speculators’ ability to play on seller insecurity and emotion is something you need to be consciously aware of in the moment and at all times. Investor sharks are very good at what they do. Your best bet is to avoid them, ignore their tactics, and keep them in mind only as a last resort.

In this market, it’s extremely common for sellers to go six months without an offer. When that time comes, you want to make good decisions with a clear head. If you are just getting started selling, avoid the cut-throat investor types. Appeal to buyer emotions and sensitivity, because that’s where you have control. Protecting yourself from the potential harmful effects of an emotional marathon or roller coaster in a tough housing market is more important than you can know.

Side note: I just read this NY Times article on decision-making, reminded me of what I was starting to get at in the end of this article. It’s a bit long but it starts providing very useful information a couple pages in on the psychology behind decision making.