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Understanding the pool of potential home buyers

July 14, 2017
By BOB and GERI QUINN - Homing In , Cape Coral Daily Breeze

One of the topics we have touched on in the past has been the importance of understanding the pool of potential buyers looking to buy homes in Cape Coral. This information is valuable to both homebuyers and sellers, as it will help them develop a clear picture about what to expect in going through the process of buying or selling their home. It provides working information and knowledge, which can help anyone get quickly up to speed about our current market conditions, making it more likely they will have a successful purchase or sale.

One of the advantages we have as Realtors is that we are constantly in communication with a variety of potential buyers from all around the globe who have an interest in buying a home in Cape Coral. This provides us with valuable insights into the pool of potential buyers, which an individual home seller or buyer does not have. We also have the advantage of going in and out of a lot of different homes in any given week, giving us a firsthand look at a number of homes in various price ranges. On top of that, we are always doing research on homes for out-of-town buyers, providing us with a broad knowledge about the homes listed for sale.

Through this process of providing information about the homes listed for sale to a constant flow of potential buyers, we see the behind-the-scenes numbers of our housing market. This is where we find the data to support our market analysis that there are a surprisingly high number of overpriced homes just sitting on the market, and as we track the outcomes for these homes, we find they often end up selling for 10 to 15 percent, or more, below their initial list price. Our research for buyers, along with our actual experiences with them, are where we find much of the data about how quickly a home will sell in our market, when it is "reasonably priced." All of this is directly related to how we utilize our Cape Coral-specific market statistics as a factual tool to help guide a client's decision-making process.

Now that the Internet has become the primary driver for establishing new relationships with potential buyers for our local real estate market, virtually every "cold" or first-time inquiry with a prospective buyer we receive comes to us via this source. To put this into perspective for you, as we sat here writing this article, we received multiple Internet email inquiries from potential buyers who are interested in looking at homes in Cape Coral. And earlier today, at 1 a.m., we received an email inquiry from a potential buyer who lives in Maine. Even when a potential buyer is referred to us from an existing client, virtually every one of them has already been searching for homes on the Internet. This has enabled us to accumulate a lot of meaningful information about the pool of potential buyers from these sources.

Having a clear understanding about the pool of potential buyers can be beneficial to someone trying to sell their home. For example, based upon the feedback provided by a large segment of the buyer pool we have access to, we know that most of them are looking for a clean, uncluttered, well-maintained and updated, move-in ready home. The more you, as a seller, can prepare your home to meet these types of buyer objectives, the more likely it becomes that you will be able to maximize the value of your home when you sell it.

The "structure" of the potential pool of buyers is another important component for sellers to understand. We would estimate that for every 10 buyers who come out to take a look at your home with their agent on a showing appointment, at least half of them have no intention of buying your home. A lot of potential buyers come into town to try to get familiar with the area and to get an idea of what homes are available in their price range, but they still need to sell their home up north before they can buy a home here. Or they may be a year or two away from retiring and making the move to Cape Coral. In some cases, the agent may be showing your home to try to convince their buyer why another home is a better buy. So out of every 10 showings, only one or two of them might be legitimate buyers right now.

Here are some other helpful things to know that can help both buyers and sellers. In Cape Coral there are several very distinct pools of potential buyers broadly defined by price points. The largest overall pool of buyers is for homes priced from around $300,000 and under, which is a price segment that typically makes up between 75 to 80 percent of all homes sold in Cape Coral. Another bigger segment in our market, making up a pool of about 20 percent of the potential buyers, is from around $400,000 and up, with this pool of buyers shrinking dramatically the higher up in price we go.

The buyer pool priced from around $300,000 and under can generally be split into two distinct groups. One group is in the very competitive under $200,000 buyer pool, which usually pits "regular" homebuyers against investors, who are looking for a potential rental home or something they can fix and flip. The inventory in the under $200,000 segment of our market tends to be very tight and the likelihood of finding what would qualify as a "move-in ready" home for most "regular" buyers, is all but non-existent below $200,000.

The other part of this group, priced between $200,000 to $300,000, is more of a transition price range, in that a buyer looking for a dry lot home is moving above the median sales price into what could be considered above average homes. They are also more likely to find some nicer freshwater canal homes as they move up within this price range. However, anyone looking for a gulf access canal home for $300,000 or less will find a limited supply of mostly older, below average quality homes needing a lot of work.

From a buyer's perspective, it is important to have an accurate understanding about the basics of our current market conditions, along with the nuances between the different neighborhoods and sections of the city. The most successful buyers, who find the best available values, invest the time to go out and see the supply of unsold homes so they can learn about the different features and trade-offs with the homes in our market. If they also develop an understanding about the pool of potential buyers against whom they are competing, they are more likely to be comfortable with reacting faster when they see a reasonably priced home come onto the market, giving them an edge over other buyers looking for the same type of home.

(The views and opinions expressed in this article are those of Bob and Geri Quinn. The information provided is believed to be accurate and reliable, however, it could be updated and revised periodically, and it is subject to change without notice. The Quinns are a husband and wife real estate team with Century 21 Birchwood Realty Inc., in Cape Coral. They have lived in Cape Coral for over 37 years. Geri has been a full-time Realtor since 2005, and Bob, who also holds a Certified Financial Planner designation, joined with Geri as a full-time Realtor in 2014. Their real estate practice is mainly focused on Cape Coral residential property and vacant lots.)



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