If you haven’t bought or sold real estate in the last 7 years, you may be in for a surprise. If you bought a home on the Outer Banks 20 plus years ago, you’ll find that your buying process then is vastly different than you will experience today. The basics are the same, down payment, getting a loan, rental income, home inspection. It’s the psychology of the sale and what buyers value more that’s going to surprise you.
The 3 main reasons why Outer Banks buyers have changed:
1. The Introduction of Real Estate Buying Shows
These shows are not realistic at all in the actual process of what truly happens. Of course not, it’s a television show. Don’t let the name “Reality TV” fool you. Very few buyers walk into 3 houses, pick one and take the agent’s recommendation bing, bang, boom it’s done. These shows also depict the features and amenities the buyers want in most cases. The homes are staged and usually move-in ready, so buyers expect that same condition when they buy. It sets up potentially unrealistic expectations.
2. Smart Phones
With everyone sporting a mobile device and access online to every listing available, buyers don’t actually have to come visit your home in person to decide if it will be a contender. You have about 10 seconds to capture their interest or they are moving on. On the Outer Banks, most buyers will spend 12 to 24 months before actually buying a second home. They don’t have to rush it because they aren’t going to physically live there, so they will take their time and wait for the “right one”. Once they have bypassed your listing, the only way to get re-introduced is through a price adjustment. Since browsing homes for sale is such a favorite past time these days, buyers are well informed on what they perceive to be a good value. If your photos and price don’t capture their interest on the first go around, it’s highly unlikely they will go back to it, much less visit the home in person.
3. Unwillingness to Do Major Renovations
The third change buyers have made is the inability or unwillingness to do major renovations. For many reasons there has been a societal shift out of hands-on DIYers and into techno-savvy up and coming buyers. They want the move-in ready project. Especially with a property that can be anywhere from 2 to 12 hours away. This is a beach home, most buyers today don’t want to start their experience with a major remodeling project. This has caused a shift in mindset…buyers now value condition over location. It’s true! I’ve seen it transition over the last decade. They will bypass a home closer to the ocean for one that’s already been completely updated.
How do these changes affect your home? If you consider there used to be three main tiers of buyers:
Tier 1 – The group who will buy exactly what they want and aren’t afraid to pay a little more for it. This group often times come in with one price range in mind, then end up spending more to get what they truly desire.
Tier 2 – This group doesn’t mind homes in their original condition because they want to put in the sweat equity over time to make the home more in line with their desires. They are looking for fair market value, but don’t necessarily need the greatest deal in the world. The home size, floor plan, and location will ultimately determine what they purchase.
Tier 3 – These are your investors and more short term buyers. They see the opportunity to get a home at an amazing discount and will do some fixing/updating to turn a profit. They are looking for deep discounts!
What has transpired over the last decade is practically the elimination of Tier 2. This group has gotten smaller and smaller, so homes still in their original condition are sitting longer and longer waiting for that right buyer. On the Outer Banks, since we have an oversupply of inventory and a greatly reduced Middle Tier buying group, it’s causing a literal back up of original condition homes for sale. The two consequences of that are longer listing time and more challenging home inspection negotiations. As the homes get older and deferred maintenance adds up, it’s turning into bigger projects for sellers.
All this being said, if you have an agent that understands this buying shift, we can help you navigate the process with ease. The right strategy is critical to netting you the most money in the right amount of time. Hiring a seasoned Listing Agent with Beach Realty is one of the smartest moves you can make!