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Buyers? Sellers? It’s a numbers-driven game

January 30, 2011

The Orange County real estate market has changed from home prices going up $5,000 per day five or six years ago, to a year ago, when buyers were making offers over the list price, sight unseen, five minutes after the home hit the MLS.  Our current leading character is the Spreadsheet Buyer.

Yep, that’s right.  These buyers are numbers driven.  They are armed with access to countless Internet sources for data on recent home sales, projected values and exactly what you owe the bank.  Yes, this is all public knowledge and they know where to get it and how to use it to their benefit!   They can build a spreadsheet to analyze anything, and right now their focus is laser-beam tight on determining the exact right price they will pay for your home.  They’ve emerged from the “I’m looking for a great deal” buyers of yesteryear.  No response a seller comes up with can penetrate their resolute conviction that the numbers don’t lie. 

The Spreadsheet buyer is just as picky as all buyers when it comes to location, floor plan and upgrades.  The difference is, today’s buyer is devouring the numbers to come up with the objective value of each home.  They recalculate the average price per square foot every day.  By scrutinizing the recent sales, the current competition and by making their own carefully considered adjustments of greater or less value, they arrive at “The Number” for each home they pursue.  Once they figure out exactly what your home is worth this minute, they’ll put in an offer up to 10% below that number – and sometimes 20% since “they” know the market will still head down and they want to beat the seller now.  They’re still looking for a good deal, and want to see how desperate you are.  they refuse to leave anything on the table.  They can counter offer until the your pens or printers are out of ink. 

What’s the End Result? 

Do some Spreadsheet Buyers come up to the full price of their view of the objective value?  Sure.  Is their target number often close to the list price?  Absolutely.  Especially if you priced your home correctly.  Will they walk away if they don’t end up with the price they want?  Without a doubt, and without remorse or regret.   They just open up their spreadsheet, find the next likely candidate, and start the calculations all over again.  Until they get what they want for the exact price they figure it’s worth.

What does this mean to the Homeseller? 

1)  Make sure you stay on top of the market while your home is on the market.  Your agent should update you weekly on new competition, new open escrows and closed comparable sales.  See where your home price factors into these numbers.  Be willing to change to keep up with the market trends.

2)  Don’t take low ball offers personally.  Look at the date and counter where you are comfortable.

3)  Be realistic, be patient and be aware.

The market will change again – that’s for sure.  But for now, make your list price reflect reality.  Or be ready for these Spreadsheet Buyers to show you the numbers. 

I know this one for a fact since I have 2 buyers exactly like this. They have analyzed, studied the charts, studied the market and they know what they know!  They think they know more than the leading analysts, or at least more than the real estate agents and the sellers out there.

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