No one wants to be #2.
I had to scratch my head on this one for a minute. Who needs a liquid pencil?
Then, the more I thought about it, the more sense it made. I recalled the time, a couple of months ago, when I was assembling some of my daughters’ old school treasures for scanning and preservation only to find that the pencil writings and drawings had faded into the land of undecipherable over time. A temporarily erasable yet ultimately permanent pencil would have avoided this domestic crisis of enormous proportions. And, suddenly I found myself looking for an excuse to visit the office supply store.
This is what you call latent demand. I didn’t think I needed a liquid pencil – didn’t know I would ever want one, in fact, until the opportunity was presented to me.
In my old traffic engineering days, we spoke of latent demand in the context of building new thoroughfares. You take the same freeway to work every day, and it works. Suddenly a new road is available and wham! All the little cars redistribute. You take the new road, which frees up room on the old route; now that less-congested route is suddenly more attractive to others who in turn change their paths.
I like this definition from Business.com best: “(Latent demand is the) Desire or preference which a consumer is unable to satisfy due to lack of information about the product’s availability.”
Latent demand is an important factor in the real estate market as well. Every time a home hits the market, in fact, it is this demand that the seller should primarily be out to satisfy, because it is the folks in this category that represent the biggest segment of the buyer pool. They exist today; repel them, and you will likely not enjoy do-over. Instead, you will now find your home in the category of the “known” versus “previously unknown.” After a couple of weeks, your home is no longer a new must-have, but the well-traveled road, that same old ball point pen we’ve seen a thousand times before.
The whole latent demand concept is the single biggest reason why the first days and weeks of marketing your home for sale are critical. And the two biggest mistakes we see are improper pricing and ineffective or essentially non-existent advertising.
You’ve heard it before. This is a favorite subject for real estate agents to beat to death. Allow me to grab my stick.
If your home is priced close to or within a reasonably expected range of market value, you will have the best chance of attracting a buyer willing to pay what it is worth. If you are priced too high at your coming out party, you will find yourself, weeks or months down the road, in a defensive negotiating position.
This is because the shine will be off the rose. The initial crowd you drew will rarely come back for a second look; they are off to the next new thing. Meanwhile, for the new buyers in the market, gone will be the sense of urgency to grab it while supplies last. Instead, they are in full-contact negotiating mode now. Consequently, the seller’s bottom line almost always suffers.
This is the one, pardon the pretty visual, that really makes my face turn red and the veins in my neck stand out. If you agree you have one shot at the majority of the buyers, the ones in the present, the ones who are going to be most inclined to come to the negotiating table with money guns blazing, then why would you hit the market with any less fervor than you (and your agent) can muster?
Bad photos or no photos, no brochures or grainy third-generation gems pulled from the home office copy machine, and not even a feigned attempt at sprucing things up around the home front for the incoming herd: How are these things going to help you appeal to the buyers? How does this differentiate you from the competition? As for the latter, you will differentiate, all right, but not in the way you had hoped.
The same argument for level of attention and detail to quantity and quality advertising applies to the online space. Consider the birth of a listing. In the old days, your agent would order a yard sign, add your vitals to the MLS, and voila! All of the other agents would be put on notice so that they might tell their clients about your home.
Today, things start out the same, but that’s where the similarities end. The MLS is no longer just for agents. When the active status toggle is flipped, all form fields (save the showing instructions and offer of compensation) are magically transported to countless destinations throughout cyber-space.
In some cases, your listing is shuttled off to points beyond through no action on the part of your agent. This happens because of IDX, or Internet Data Exchange, agreements between various sites and our MLS. In other cases, your agent has to actually do something proactive – “feed” their listings to the various sites to ensure maximum exposure (and you should be sure that they are doing just that). Either way, when that switch is flipped, if you haven’t donned your fancy shoes in order to put your best foot forward — if you don’t have a lot of stellar photos or if your agent forgot to run their spell check — it’s too late, at least if you want to appeal to the latent demand.
In short, gone are the days when homes just sold themselves. (For the record, that was 2005). No longer can you just list it and know they will come. Well, they may, but striking a chord with the first waive – the latent demand – is critical to maximizing sale price. They’re a fickle crowd. You get one chance. Do it right. You can be a liquid pencil, an exciting new opportunity, or you can be the same old #2.