Stuart Neal's Blog

Before you sell your home in Edmonton or any of the surrounding communities, it might be helpful to learn about the different kinds of home buyers available to you. Together, these different buyer groups form the ‘whole’ market.

You might want to think of the home sale market like a ‘layer cake’. Each layer has particular characteristics & the quality of the buyers you meet & your outcome may be affected by which layer you sell into. 

The layers of the cake might be described as follows:

-          Retail layer,

-          Wholesale layer &

-          Sub Wholesale layer 

Here is a quick description of each layer:

Retail Layer

IF you want to sell your home for top dollar, this is where you need to be.

This is the top layer of the market, where most homes & condos are sold. In this layer, you will meet the highest quality ‘retail’ buyers.

Retail buyers demand, the most professional marketing, Virtual Tours, professional High-Definition photos, floor plans, staging, super clean homes, easy automated showings & professional REALTORS® to guide them through the process. They also expect to feel safe in their decision, their home search, home selection & the overall purchase process.

In return, retail buyers will pay you full market value, that is, the most money.

Retail buyers will avoid ‘for sale by owner’ if possible. Retail buyers most often prefer to work with their own buyer agent REALTOR ^®.

Retail buyers will rely on high quality websites, social media like Facebook & Instagram & their REALTOR® to find their next home.

Open Houses & newspaper advertising is essentially redundant. Retail buyers will not usually consider homes advertised on Facebook Marketplace or Kijijji, but if they do, they will often ask their REALTOR® to call the seller for more information & if needed to set up a showing & handle any subsequent negotiations. Retail buyers value the protection & expertise afforded by the better professional REALTORS® & they will fully utilize them.

Wholesale

This is the middle layer of the market. Often, you will be approached by experienced investor types looking for a deal & some people of the ‘retail’ buyer group mentioned above.

You will find these buyers by purchasing a “for sale by owner” service such as Property Guys, or by listing with one of the discount brokerages.

There are 3 challenges to this approach:

1.     You may set up an expectation that the buyer can get a deal too. Some buyers anticipate that if in theory you have a lower commission to pay for, there is more ‘wiggle’ room & these buyers are going to want a share in the notional savings. 

2.     Because you are open about wanting to save on commissions, some buyers might wonder if you have tried to skimp in other areas like home maintenance or permitting. 

3.     Because companies providing these services are working for very low margins, you must be willing to accept less in the way of marketing tools (no Virtual tour, no professional photos, no floor plans & no social media marketing), less service, less communication, less expertise & perhaps a newer inexperienced REALTOR® working on your file & a simple listing on the MLS^® System.

Sub – Wholesale

This is the bottom layer of the market. If you restrict your marketing to a Canadian Tire ‘for sale’ sign & advertise on free websites like Kijiji, you will most likely meet 2 kinds of buyer.

The first group is predatory investor types. They are looking for desperate home sellers who:

don’t know the market,

don’t know the true value of their homes,

are disinterested in the outcome i.e., estate sales,

These predatory buyers are looking for great ‘under market’ deals. You should expect to receive very low offers.

The second group is a little different. These folks may be challenged by no credit history, poor credit history & in some cases poverty. Expect these buyers to ask about no money down & rent to own options.

Note this blog was first published November 2015 & updated & republished October 2017. It was revised & updated & published for a third time August 2021.

About the author:

You can read more about the author of this blog by clicking this link - Stuart Neal, Broker, REALTOR^® & Team Lead.

We strive to give our home seller clients Better Value & Better Results. To get more information about our affordable full service FLAT FEE home selling program, call our broker owner Stuart Neal at: 780-760-2014 or visit our home sellers page www.FlatFeeRealtyAdvisors.ca