Numerous reports have been written about the effect an abundance of choice can have on a buyer. It overwhelms them, often to the point of not being able to make a decision at all.
Logic would have you think that a large and varied list of options would lead to a happy buyer (of anything, from ketchup to cars), but researchers have found otherwise. Too many choices can lead to overwhelmed and confused buyers who just throw in the towel and then either delay purchasing or end up buying nothing at all.
This effect is heightened even more in the current buyer’s market where there is such a selection of good homes at great prices that buyers become panicked that they haven’t seen “everything” yet and don’t want to miss a great opportunity. After awhile, they become so confused about all of the homes (seen and not yet seen) on the market, they shut down, unable to make any definitive decision.
I’d bet that most of us have worked with at least one buyer who was well qualified and started their home search with good intentions, but became so obsessed with not missing “the one” that they let many great homes pass them by. I know we have in our office.
Qualifying and consulting with your clients is the only way to deal with this dilemma. Meet with them in the front end and assess not only their ability to buy, but their motivation as well. Life changing events such a marriage, job changes or new children could be the signs of a truly motivated buyer. Ones currently in a home which “fits” them who more just want to see what’s out there, might be less serious. Really try to hash out in the beginning just how serious and committed they are to buying.
When you start to see the train derailing and the list of “must sees” just keeps going on and on, it might be time to start talking to your buyers to see if you can narrow down their search criteria and regain focus.
What do you think? Have you experienced overwhelmed buyers? Any suggestions on how to avoid that in the future? I’d love to see your comments below….
Steven Hedquist
July 9, 2010 at 4:54 pm
Janie you could not be more right. I service a market of only 150K people with nearly 3,000 SFR listings. I just had a couple of buyers stop looking for a couple of months to see what better opportunities are coming. I tried everything from explaining mortgage rates may rise, inventory may actually shrink, and the tried and true “envision yourself in this home” method trying to get them to focus on what here now for them. What did I get for the effort…bupkis. Oh well, at least there are buyers to work with now.
Cheers!
Steven Hedquist
Future Home Realty
Spring Hill, FL
Ray Schmitz
July 10, 2010 at 7:41 am
Here are some tips:
Of course, you have to really listen to your buyer, and ask a lot of questions. The enables you to let your buyer has to know it ok to buy the first place they see, because you have picked the handful of best choices based on exactly what they want. I have had more than one buyer go with that first place after this preparation. Now, I tell people stories based on these instances.
Explain the typical number of homes seen before buying. NAR once said the national average is about 17. This can be a reality check for someone who is trying to psyche themselves for a forced march through 200+ places over the next several months.
Some people don’t consider how they are going to shape the place into what they want with their own style and personality. I tell people about the buyer who looked at 40 then surprised me by saying he really wanted the 40th one, which he reacted to about the same as most of the rest. “What was it about this one?” “Nothing, I just realized that several of them I had seen would have been good enough, and so is this one.”
Ray Schmitz
Corcoran Group
New York, NY
Janie Coffey
July 10, 2010 at 12:14 pm
that is really a great idea Ray, I have found most things with buyers and sellers, if you prep them that they may feel that way or that X might come up, and they know beforehand, it goes much smoother. Thanks for making me remember this is a good approach to the choice issue as well, I hand’t seen it in that light before.
Janie Coffey
July 10, 2010 at 10:04 am
Hey Steven, you aren’t too far from me (well, at least in FL). I can imagine with 3K homes available, it’s even worse here Miami where there is maybe 30K! They just start to melt down from choice and become paralyzed, fear of missing the next big thing. I have found the ones who NEED to move for one reason or another are the best and most serious.
Thanks for stopping by!
Augusta Real Estate
July 10, 2010 at 11:39 am
In Augusta there are 4,381 homes on the market, 815 New Construction, 3,566 Resale, 86 Short Sales, 238 Bank-Owned or REO properties. What I’m seeing is a reluctance to purchase resales and buyers going strictly for new construction. The price per sq ft is hard for them to resist.