Is the Second-Home Niche Right for Your Business?
You’ve likely worked with second-home buyers from time to time. Living in Arizona, we are fortunate to attract buyers with our appealing weather and resort lifestyle. But have you considered investing energy into developing that niche for your business? The timing may be right. In a real estate market bumping along at the bottom of a bust, the second-home niche is seeing growth. NAR reports that in 2009, sales of vacation homes increased by 7.9%, and the median vacation home price grew by 12.7%.
Veronica Barragan with Sueno Realty Group in Avondale began to target the second-home niche when she noticed that many buyers in her market were coming from out of state. “Arizona is a really good second-home market,” she says. “I wanted to help buyers coming out here, whether for retirement or for nice weather.”
Is the second home specialty right for you? Let’s take a look at some of the characteristics you might need to succeed in this niche.
Do you love where you live?
One of the most important factors for success in the second-home market is knowing your community well and communicating your love for it. Debbie Wyrsch-Williams with Coldwell Banker Residential Realty in Green Valley sees it as her job to sell buyers on Green Valley as opposed to other areas they may be considering. She takes clients to view not only homes but the different amenities in the area, such as a beautiful ceramics studio or a great woodworking facility. “You want it imprinted on their minds,” she says.
Sharing common interests can be a good way to connect with vacation-home buyers. “I am an avid golfer, so I can give them first-hand information about different golf courses,” says Judy Brickman with Russ Lyon/Sotheby’s in Scottsdale. “It definitely helps to create a rapport, an instant communication from one golfer to the next.” Consider subgroups within the second-home niche that match your own interests. Live in the city where you went to college? Reach out to alumni looking to retire in the area or parents who want to purchase an investment home for their child to live in while going to school. Love birding, water sports or hiking? Cater to buyers who share your passion.
As you drive clients around to show homes, reinforce the positives of the area, advises Pam Wachter with Russ Lyon/Sotheby’s in the White Mountains. Your enthusiasm for the area should be infectious. You are selling not just a home, but a lifestyle.
Resort & Second-Home Property Specialist
If you’re ready to develop the second-home niche, consider NAR’s Resort & Second-Home Property Specialist (RSPS) certification. Launched in 2006, RSPS now has over 1,000 members who focus on this particular real estate market.
The education-based certification helps you understand the specifics of the second-home transaction, from appropriate marketing to information about financing and tax implications. Barragan, who serves on NAR’s Resort and Second Home Committee, recommends the courses. “You learn to develop your target market area and how to deal with this market niche,” she says. “There are also great networking opportunities.”
- NAR Resort and Second-Home Specialty
- NAR Field Guide to Vacation, Resort and Second Homes
- Resort Life — an NAR Blog
Is your website worth visiting?
The Internet is where most buyers today start their home search. Because second-home buyers are shopping from a distance, a website is especially important. Brickman, who does no print advertising at all, emphasizes the importance of developing a good website and spending the money necessary to promote it. Even if you invest marketing dollars offline—on ads in a Canadian golf magazine or a billboard near a spring training ballpark, for example—a potential client’s first step will likely be a visit to your website.
Make sure the site speaks to the interests of the second-home buyers you are targeting. “You need to understand who the buyer is and what they’re looking for in order to shape your message,” says Barragan. One of the things Barragan discovered in researching the second-home market is that buyers usually come from within a 365-mile radius. She targets her marketing appropriately.
Your website should communicate the joys of living in the area. Wyrsch-Williams’ website includes virtual tours of Green Valley and several neighborhoods, photos of golf courses and recreation centers, and links to local websites. This allows website visitors to get a sense of the community from afar.
Do you like getting to know people?
It’s important for REALTORS® in this niche to be comfortable with all types of people, reports Brickman. Second-home buyers may be affluent or of modest means. They may come from the Midwest or the Middle East. They may crave adventure or peace and quiet. Put in the time getting to know the buyers, coaxing relevant information out of them and identifying their needs.
One thing you’ll want to determine is how well they know the area. “Vacation home buyers [in the White Mountains] span a huge spectrum as far as familiarity with the area goes. Some have heard about it, some have childhood memories of vacationing here, some have stayed at a friend’s cabin,” says Wachter. “Depending on how much the buyer knows about the area, your work is either a huge education process or a validation and reinforcement of what they like.”
Next, help them spell out their goals for this home. Do they want to host large family gatherings or have a private retreat? Do they want to enjoy the view from their porch or partake in a host of recreation activities? Do they want to socialize with neighbors or not see another person for days at a time? Get beyond the basics of square footage and number of bedrooms and help them create a “wish list.” This will help you both evaluate the homes you see.
Once you’re in the showing stage, a post-showing debrief in the car or back at the office is very important with second-home buyers. “Elicit what they liked about the property, then reiterate those positives back to them,” advises Wachter. “This helps fix properties in their minds.”
Are you patient?
Developing relationships with second-home buyers takes time and patience. The buyer development phase is generally your biggest time investment. “Today much of this is done electronically via emails,” Wachter says. “It can take weeks or months to meet the buyer face-to-face.” Because this is a purchase of choice, not of necessity, the second-home buyer is in no rush. You could work with a client intensely for several days while they are in town, only to have them disappear for a year or more. Rather than giving up on that lead, cultivate the client slowly with regular but low-pressure contact. “If you’ve done a stellar job with these buyers from development to engaged and proactive showings, they’ll be back to look some more with you,” says Wachter. “And the next time around, or the time after the next time around, they’ll reward you with a contract.”
Continue to nurture past clients as well. Once one member of a friend or family group makes a move, others often follow. Beyond referrals, past second-home clients may buy again in the area. “Oftentimes a person buys a second home and initially uses it just as a winter vacation place. Then their stay becomes longer and longer, and they end up selling their home in a colder climate to purchase a larger home here,” says Wyrsch-Williams. “It’s never the last transaction.”