Thanks to Jim Valentine for this great post!
Seller Motivation Today ... Understanding It For Success
It takes a willing Buyer and a willing Seller to make a sound real estate transaction. Understanding a Seller's motivation is essential for Buyers to negotiate the best transaction for the home of their choice. There are three distinct categories of Sellers today: Bank Owned (REO), Short Sale, and Private Party (regular). Each is motivated differently.
The easiest to assess is the REO owner, the lender. They are numbers and risk driven. They want the most money in the shortest amount of time with the least amount of risk to the transaction. They are not emotionally involved, will make a decision based on price and terms alone. They want a clean offer with minimal conditions. You can usually make a good buy when buying a REO, but there are contractual restrictions and often property deficiencies that must be dealt with.
The Short Sale Seller is motivated to minimize the impact on their credit. They will get nothing from the sale other than the ability to repair their credit sooner than if they are foreclosed on, and the forgiveness of their debt. They also can save face in their neighborhood by living in their property and maintaining it until the close of escrow. There can be difficulty motivating the third party decision maker, their lender, to work to accept your short sale offer, but that situation is improving. Motivation in a Short Sale situation is usually high on the part of the Seller - your agent can help you determine the anticipated motivation of the lender based on his/her short sale experiences.
The regular Seller is still out there, and many are sufficiently motivated to compete in the market place. It would seem like these Sellers would also be price driven, but often there are other factors that are important to them that can impact the dynamics of the negotiations. These can include a rent back opportunity, a Buyer that will be a good fit for the neighborhood, minimal conditions, a long escrow period, a short escrow period, etc. Other motivating factors can be health, moving for family, moving for work, buying down, buying up, etc.
Our Advice: It doesn't matter what a Seller paid or didn't pay for their property ... what matters is their motivation to actually sell. Understand what the Seller wants and make your offer accordingly. Not all offers are the same, and your agent should help you craft an offer that will resonate appropriately with the Seller of the home you want to buy. It isn't all about money ... the art is to find the true motivation(s) of the Seller. When your Buyer motivation matches the Seller's motivation on a home that you really like ... you can make a wonderful purchase and enjoy a smooth escrow that all parties are committed to.
Some Sellers have listed their home for sale, but are insufficiently motivated - move on. Unless there is an overwhelming reason for you to buy that specific property, i.e.- your sister lives next door, we suggest that you move on once you determine that the Seller isn't realistic in their expectations. Probe for motivation before you decide you can't buy the house - you might be surprised how easy it will be if you find a motivating factor other than that which is stated by every Seller, "We're not going to give it away!" When it comes to choosing professionals to assist you with your real estate needs... Experience is Priceless! Lisa Wetzel & Jim Valentine, RE/MAX Realty Affiliates, 775-781-5472. firstname.lastname@example.org, www.carsonvalleyland.com
Lisa Wetzel and Jim Valentine are the authors of this blog. Lisa, Jim and Jessie are experts in Carson Valley, Carson City and the tri-county area of Douglas County, Carson City and Lyon County. Call our team anytime at 775-781-5472 or 775-781-3704. To Search for Homes go to: www.findhomesincarsoncity.com of visit our website at www.CarsonValleyLand.com