21 Aug How not to miss the 'strong' buyer for your property – Mat Steinwede
Mat Steinwede is one of Australasia’s top agents. He has a theory about why many sellers miss the strongest buyer for their property which results in the possibility of underselling.
Kevin: When it comes time to sell your property, one of the things that you’ll hear agents talk about quite often is taking the emotion out of the sale. Not difficult if you’re selling a commercial property because they’re totally different from residential, but when you’re selling a residential property, it’s natural that you have some kind of emotional attachment to it, particularly in terms of its value.
So, what do agents mean when they say, take away the emotion? Let’s talk to one of Australia’s most recognized real estate agents, Mat Steinwede.
Hi, Mat. Thank you for your time.
Mat: Hey, Kevin. Thanks.
Kevin: Now, Mat, when agents talk about taking emotion out of the sale, what do you mean and how do you do it?
Mat: It’s like buyers and sellers start at the opposite ends of the interest wave, and what I mean by that is when an agent says to an owner “You have to take the emotion out of it,” or even people might say “Don’t get so emotional about your house,” it’s really good advice when people say that because a buyer starts logically and then they finish emotionally.
So, when a buyer first sees a home come on the market, they haven’t been there, they haven’t experienced it, they haven’t lived there, but what they do is compare it straight away logically to everything else that’s happening in the market right now, so everything else that’s for sale. They also pull up the data for anything that’s recently sold, so they’re looking at it very clinically.
And if any owner is thinking of selling their house, they have to do the same. So, they almost have to take the criteria of their property, the area their property’s in, maybe what other benefits it offers, and then sit down at a computer or go around to open houses and just get all the information they physically can and compare it clinically.
Forget it’s your house for a minute. Do you know how many houses I go to Kevin? I’ll go to three in the same street sometimes and they all say “This is the best position in the street,” but I just heard that from someone down the road recently.
When you live there, you get very emotionally attached because you understand everything about the house, but a buyer doesn’t see it that way when they first start looking at it logically.
Kevin: It’s so important there for an agent to be really frank with the seller, isn’t it, and say, “Well, look, this is how a buyer is going to see your property.” You really need to hear that, I think, don’t you?
Mat: You do. When I say they start at the opposite ends of the wave, and I said that they start logically and finish emotionally, once the buyer becomes interested in a home, that’s when price is built.
This is why properties sit on the market for an extended period of time. An owner will see it from that perspective first and work backwards, whereas a buyer has got to work upwards. So, an owner quite often says “No, I think it’s worth this,” because it’s worth that much to them. They almost miss the market. So, they start high, the market doesn’t respond because the logical part of the process doesn’t connect, and then they sit on the market, and then they end up dropping their price and dropping their price, most of the time.
Kevin: Is that why the first offer from a buyer could be a low because it’s like a statistical offer, a logical offer?
Mat: It is, yes. Even though it might be emotional to a buyer… And really, that’s the whole equation here. It’s how to emotionally connect an owner’s property with the marketplace, like try and find that middle band.
There’s a saying in real estate: your first offers are the best offers. Even though an owner might see it as low, to the marketplace or the buyer, it might be actually the right offer or the best offer because the buyer has been looking for a while.
Kevin: So, mate, what is your advice to owners if they’re thinking about entering the market?
Mat: After 16 years of seeing owners miss the best offers and end up selling a property for less down the track because they missed that first buyer, I would say that when you do price your home, take your time, research the market, really get a sense of what’s going on out there. Don’t listen to your friends or neighbors because they have no idea, half the time.
But when you do find a buyer, and if it’s in those early stages, the biggest mistake that owners make is say “It’s early days,” and they let the buyer go. What I would be doing is sitting with your agent and I’d want to know a few things: how long the buyer’s been looking for, how much they have to spend, and how much they love the home. What are their reasons for buying this home?
If those three things are all in your favor – for instance, they’ve been looking for a while, they have enough money to buy the home, they have a couple of compelling reasons to actually move there – I would say chances are that’s going to be the strongest buyer you’re going to find along the whole process.
Even though it might be less than what you want, don’t disregard it. Sit down with your agent and work through it and work through the reasons why their interested in the home.
Kevin: Great advice there from Mat Steinwede at McGrath Central Coast. Mat, once again, thanks for your time.
Mat: Pleasure, mate.