When chatting with a prospective Buyer, I’ve found just about everyone lands in one of four unofficial groups. And recognizing these groups is helpful when determining the advice and guidance I provide them with. These groups are:
1. First-time buyers (or others who are not with the sale of another property). Timing of the purchase is usually determined primarily by readiness to buy. They can also be influenced by how the market is trending, but motivation to get into the market is a driving factor. Usually in a flexible living situation (living with parents, renting, etc.) where there’s less urgency to buy if it’s not a good time personally or economically to do so.
2. Buyers who are upsizing, pricewise. Usually, this group ranges from first-time sellers to families (25-50 years old). Often, those in this group will upsize more than once and, although everyone wants to sell for as much as possible, timing of each move is usually determined by the right ‘next place’ being affordable and available. The next place will usually be occupied for longer than the previous one was and securing it for a comfortable price point the priority. This move is almost always a family-oriented move determined by families growing, career opportunity, schools, hobbies and interests, etc.
3. Buyers downsizing. This usually occurs amongst older demographics and involves a varying blend of moving to simplify lifestyle (eliminate stairs, less square footage, etc.), to simply financial burden in preparation for retirement or other priority shifts, or to access equity. Important to recognize is if the move is voluntary and relatively low-urgency or being dictated by life circumstances.
4. Secondary property purchases. Investment and vacation properties. This is the group who are expanding their portfolio. Usually, a buyer who is in a home they plan to remain at long-term and are looking either purely to invest in real estate with speculative and/or cash-flow upside, invest in a property they’ll get personal use or enjoyment out of, or find a property that offers both. Timing here is dictated purely by financial capability, and the urgency is determined by a combination of market conditions, priorities and capability of the purchaser and availability of what’s being searched for.