Selling primary homes is something that most real estate agents do — if for no other reason than because primary homes are the biggest chunk of the residential market in the U.S. in most markets. But what about the “unique” home market with cabins, lakehouses and vacation homes? 

Those who begin by selling primary homes are trained, or quickly discover, that they need to get their buyers to focus on:

• Location
• Size
• Amenities
• Urgency

As a brand-new agent, the very first house I sold was to a young couple expecting their second child. They were living with a toddler in a two-bedroom, second floor walk-up apartment. They wanted my town because of its proximity to two good job markets; they wanted a three bedroom house; there were not a lot of amenities available in their price range; and their urgency was literally growing every day. The wife was eight and a half months pregnant at closing, which was cutting it pretty close! I was pretty much an “order taker” in that sale — they gave me their parameters, I found what they wanted, or close enough to satisfy them, and they bought it. I later found out that the wife had told the husband, “I’m not coming home from the hospital with a new baby to that apartment!” 

However, my market, because of geography — I’m in the mountains of Pennsylvania near streams, state land, bike trails, and hunting and fishing grounds — also serves and caters to second-home buyers. Also as a brand-new agent, I discovered some characteristics fairly quickly about those buyers:

• Location: Is tantamount. You can’t move the state game land or the salmon stream. In your market, the unique features might be the lakes, or the ski or snowmobile trails. The feature has to be there, or the property doesn’t suit. Those location attributes are the sum and substance of why these buyers are looking in your area. Other than asking how the taxes are, they don’t care about your school district or your local government — unless it gets too intrusive. 
• Size: Is flexible. You wouldn’t believe how many guys can fit into a hunting camp until you’ve seen the bunkroom! If the size isn’t right, they’ll fix it. In the past few years, my market has seen a marked number of “teardowns” — buyers completely demolishing the improvements and building new. 
• Amenities: Flexible again. Some of my second-home buyers specify that they don’t need inside plumbing. Some have been honest enough to admit that if they get a place “too nice”, then the “wives will want to come along”. They will buy with amenities, and if they want the wives to come along, and the wives want inside plumbing — they will put it in. Because they don’t intend to live there year round, these buyers can “rough it” with only one bathroom or a small kitchen. 
• Urgency: Second-home buyers generally have absolutely no urgency. This is a discretionary purchase. They could buy this house … or not. Maybe it’s between my listing of a log cabin in the mountains that the husband prefers and the beach house that the wife prefers. Or maybe the joker in the deck is that they might buy a travel trailer or a huge boat instead. Because again — this is a discretionary purchase. No one needs a second house! 

So, what does an agent do with listings for second homes? We all usually market homes by talking about the location, size and amenities. We try to insert urgency: “This won’t last!” But what is our best method for our second-home buyers?

Location

First of all, know your market — in terms of how a prospective second-home buyer would see your market. In the RSPS course, we talk about being an “ambassador” for your area. That is so true! Being a good second-home agent in my area includes knowledge of trout streams, lakes, which streams are stocked, state game land and hunting seasons, ATV trail locations and snowmobile trail locations — as well as knowing the tax structure, the nearest hospital, and a variety of other things that buyers will ask. I’ve had second-home buyers ask about everything from where the good restaurants are to who is a good veterinarian. If you don’t love the area you are in enough to be an ambassador for it, either fall in love or move to an area you can love like that! My buyers look regionally, so I have to be able to talk about other areas in Pennsylvania that they might consider — and have talking points about why my area is better. So, if they say they are looking at the Poconos, I’ll point out my area is not nearly as commercialized and built-up. If they mention the counties immediately to my west, I’ll point out that they don’t have the bike/hiking trail. This also involves you knowing the good and bad about your area. Maybe you don’t have all the amenities of a Vail, Col., but you are also a ski resort area, and you are much more reasonably priced — that’s your selling point. 

Size

We do often advertise hunting cabins with the information about how many the cabin can sleep. In my market, it is still common to have groups of people go in together to buy a camp. They are not looking for luxury, just a place to hang out after hunting. Size also means acreage. Many of my buyers are looking for acreage — until they find out how pricey that can be. My part of Pennsylvania is in the middle of the Marcellus Shale Gas Industry, and that has driven up land prices considerably. However, even before that happened, I would always point out to buyers that properties that adjoin state land give the owner all of the benefits of the land, without the burden of taxes. Proximity to state land continues to be the driving force in my market. 

Amenities

If our listings have amenities, of course we play them up! In my market, stream frontage and rail/trail access or frontage is highly desired. And, like lake frontage or ocean frontage, you either have it or you don’t. If you don’t, the price should reflect that. Of course, if the house has added amenities like a cozy fireplace, a sweeping deck or porch, or a master suite, we talk about those features.
For all three of these features — location, size and amenities, I try to frame the house in terms of what it will provide to the buyer. Research from the National Association of REALTORS® shows that many buyers are looking for a family gathering place that will include more than one generation. The same research from NAR reveals that most second-home homebuyers buy a property within 200 miles of their primary home. So, I emphasize how they can get to their second home for a weekend without much difficulty (“just 90 minutes from Harrisburg, Penn.”); how it is large enough to allow the entire family to congregate (“bunk room for the buddies or the grandkids”); and how they’ll enjoy the amenities (“Fish off the deck, walk to the rail/trail, and walk to state game lands”). You are always painting a picture of a lifestyle because that’s what they are buying. So: “Enjoy your morning coffee on the porch overlooking the stream. Later on, take the grandkids on a bike ride on the trail. Some fishing before dinner, and then gather around the fire ring to make ‘smores and tell stories.” 

Financing impacting second-home buyer urgency

Because second-home buyers do not have the urgency first-time buyers have, you have to possess a different mindset when working with these buyers. Rarely, in my experience, do they make one trip and buy a property. They will make several trips. They will look at properties over a long period of time — even years. They will want you to keep in touch with them and continue to supply them with market information. Urgency in some markets has actually been created by the financial meltdown. In places like Florida, cash sales are the norm, not the exception, and are being made by investors who understand that the prices they are seeing will not last. The same phenomenon has been reported by agents along the Eastern Atlantic Coast, from Maine on down. Their prices took a hit, but buyers who’ve been “looking” for years are now realizing that in some areas, the prices are as low as they have ever seen them. 

What we need to couple with this to create urgency on the buyer’s part is an understanding of today’s low interest rates and how unlikely these rates are to last. The math of interest rates is pretty simple: as rates go up, buying power goes down, and the payment amount goes up. What many consumers do not realize is that the gap is much greater than the change in interest rates. Here’s an example: A loan for $100,000 at 3.5% over 30 years will cost $449.04 a month for principal and interest. If the interest rate goes up one percent to 4.5%, the payment goes up to $506.69. The payment has increased by 13%! If the buyer waits around until rates hit 6.5%, which is still lower than the historic average of around 7% to 8%, the payment is now $632.07, or 41% higher than it was at 3.5%. It’s up 25% from the cost of the payment at 4.5%. In other words, time is not on any buyer’s side. It is not a question of if mortgage interest rates will rise, but when. So, the urgency that we are using now is that at no other time in my career, spanning 30 years, have we had this much inventory, and these low rates. They can buy now and lock in the cost of the second home for years to come ... or they can wait and perhaps never be able to realize that dream. So, you market this by telling your buyers that for now — and it won’t last — their dreams are affordable.

Melanie J. McLane is a Pennsylvania-based appraiser, associate broker and real estate educator. A veteran of 34 years in the resort and second-home and real estate industry, she has owned and operated a real estate brokerage and taught everything from pre-licensing through designation courses-. She is the 2012 chair of the Resorts and Second Homes Forum for the National Association of REALTORS^® and continues to practice as both an appraiser and an associate broker. McLane holds 11 designations and/or certifications, was inducted in 2008 into the REBAC Hall of Fame as a trainer, and was awarded the 2012 RSPS of the Year.