Greetings from the Grand Strand!
I'd like to welcome all the new readers!
We've added quite a few subscribers to my monthly Real Estate News in recent weeks. If this is your first newsletter, please note that,
although the big market-wide statistical reports and the tailored reports for specific resorts and areas are always included each month, I try to look at our real estate market from a resort property perspective instead of lumping all condos and all houses into the same groups.
This month I'd like to take a look at some interesting numbers which shed light on who the resort condo buyers are, where they live, and why they buy. Then, we'll take look at how these factors affect marketing for a seller.
So far in 2017, I've personally had 54 sales
, about half on the listing side and half on the buyer side. Of course I'll add a few more before the end of the year.
All of the properties are resort condos, mostly on the oceanfront but some are on golf courses or the waterway. This group of buyers is probably representative of typical buyers of similar properties throughout the Grand Strand. Here are a few key numbers about the
buyers
in these transactions.
The 54 buyers were from 43 different cities in 13 states and Canada. Here is a chart showing the sales by state.
52 of the 54 purchases were second homes and/or investments. Only 2 purchases were as primary residences.
5 buyers purchased 2 properties each (investors).
Only 5 buyers were from Myrtle Beach or North Myrtle Beach. 4 were investors and 1 sold his local single-family home to move into a waterway condo as a primary residence.
So what does all this mean?
The buyers are from all over the place.
Even the buyers within particular states are from lots of different cities. Granted, most of the states are on the eastern seaboard but there were also buyers from Florida, Arizona, Illinois, Ohio, and Michigan.
Over 140 million people live in these 13 states! There's simply no way to target any particular geographic area to try to find potential buyers.
Almost all of these buyers were purchasing second homes and/or investment properties rather than primary residences, which means these were discretionary purchases that they were not forced to do
(not moving for a new job, making room for a bigger family or buying for any of the typical reasons people purchase primary residences).
The buyers were not dominated by any one profession.
Among the buyers were healthcare professionals (doctors, nurses, pharmacists, etc.) insurance agents, sales executives, business owners of all types, scientists, accountants, IT experts, education professionals (teachers, principals, coaches) skilled tradesmen (repairmen, maintenance and factory workers, etc.) as well as a handful of retirees.
The buyers did not follow any one pattern of timing or motivation.
Some had been dreaming about buying second homes for many years, searching and planning until they were ready.
As mentioned, some were
repeat investor buyers
. Quite a few were buying their
first investment properties
. Several already owned multiple rental properties in our area but decided they wanted
true second homes
as well. Some had recently sold properties and wanted to roll the profits into
1031 exchanges
.
Now let's shift gears and look at this same info from a seller's perspective.
I'm often asked by owners who are considering listing, "How are you going to "sell" my property?" The act of "selling" generally implies convincing a potential buyer to make an offer. Of course this step is important but first you've got to have a potential buyer to sell to! So if you don't know where your potential buyer lives and you don't know what he or she does and you don't know when or why he or she will buy, how will you find this buyer?
The simple answer is that neither you nor I nor anyone can find the buyer- the buyer must find your listing.
For this to happen,
the listing agent must market a property in a way which
maximizes the odds of a suitable buyer finding your listing among the thousands
available and
(important detail) then giving that buyer a reason to focus on yours in particular.
Despite these obstacles,
there are lots of techniques to increase the chances of the right buyer finding a listing
and I will cover some these in future newsletters.
For the moment, l
et's focus on one in particular which is rarely talked about or even considered as important by many sellers -
marketing to other agents
.
Even with all the marketing I personally do
(
newsletters which currently go out to over 6000 subscribers,
the
tens of thousands of postcards
I send out each year,
the
extensive website
which is visited by thousands of visitors each day,..),
my reach is still dwarfed by that of the thousands of other agents in our area, all of whom have their own lists of potential buyers. Why not have all of them work for me and my sellers?
There are two reasons marketing to other agents is especially important in our market.
One is that
most listings really have only one shot with any given buyer
.
I'll explain. In most markets, home buyers may look at a few houses per week for weeks or months before purchasing. Since
most of our buyers live far away
, the process is different.
Once the dreaming is past and the decision to move forward with a purchase is made, almost every buyer chooses to work with one agent to zero in on the final target property.
By the way, it may sound strange but I know from experience that a buyer almost never ends up actually purchasing the property he or she initially calls an agent about. It usually just happens to be the listing (and listing agent) the buyer is considering at the moment he or she switches from dreaming to buying mode.
The selected agent and the buyer systematically narrow the choices to an increasingly targeted list.
The buyer usually plans a trip here to spend a day or two looking at this short list of properties with the agent.
This is generally the one and only time any particular listing has a chance with this buyer. Any listings not on this list are invisible.
This presents a great opportunity to increase the odds for my listings selling and I expend a great deal of time and effort to make sure
my listings are on as many agent's "short lists" as possible.
Of course, convincing another agent to award his or her "short list/shiny penny" status to one of my listings is easier said than done but I feel that I've gotten pretty good at it. As mentioned previously, in future newsletters I will dig into some of the things I do differently to market to other agents and to set my listings apart.
Here's the second reason marketing to agents is important - overwhelming statistical evidence. Take a look at the following chart, which represents almost 13,000 closed sales so far in 2017.
As you can see, in our market, over 85% of the buyers are found by agents other than the listing agent. That's about 7 out of 8 sales.
I researched this for different property types, expecting to find big differences. The results, for YTD 2017, were that for oceanfront condos, non-oceanfront condos and (surprisingly) single-family home resales, over 85% of the sales resulted from agents other than the listing agents procuring the buyers. Even for single-family-home new construction sales, which are often sold from on-site models staffed with agents working for the developers, 74% of the buyers were procured by outside agents.
"Selling" the listing is not the most important part of the process. Bringing the listing to the attention of as many potential buyers as possible is the biggest challenge. One of the most effective ways to do this is to market to other agents!
The next newsletter will be a bit lighter - in keeping with the holiday season.
In the coming months, I plan to tackle meatier topics - improvements in condo financing, ways in which buyer agents and listing agents differ, and of course the big 2017 review of resort condo sales.
That's all for now. All the usual reports and my Best Buy lists are included.
See you at the beach!