The ongoing buyer’s market in NYC is making times tough, and bringing out motivated sellers. So much so that many potential sellers have chosen to put the brakes on any sale until the market looks more in their favor. But even then, there are still those sellers who can’t afford to wait and need to find a buyer now. If you’ve got your eyes set on scouring a bargain, then it helps to identify these kinds of sellers. Work with your buyer’s agent to help identify any of these signs in a seller.
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What is a Motivated Seller?
First off, let’s get a working definition of what we mean by a motivated seller. The definition has changed since the worst days of the housing crisis over a decade ago. Back then it usually meant someone who wanted to avoid foreclosure. There are fewer of these desperate sellers now. But there are still other more common reasons for a seller to be motivated. These include:
- Someone who is relocating for a new job
- Two sellers who are going through a divorce and want to get rid of their assets as quickly as possible
- Sellers who inherited the property after the owner died and want the proceeds from the sale as soon as possible
- The seller may be stretched carrying two mortgages
Identifying a Motivated Seller
Multiple Recent Price Drops
When reviewing real estate listings, keep a lookout for properties that have gone through multiple price drops. Suggesting the prices were not enough to garner interest. That’s not to say their initial price wasn’t justified. It just means that they couldn’t find a buyer for that price. In this situation, sellers who can afford to wait will usually take their listing down and wait for an improvement in the market. But if they keep it up, and continue reducing the price, then that’s a clear sign that they want to unload it sooner rather than later.
Just keep in mind that even though the seller is motivated, that doesn’t mean they will accept unrealistic lowball offers. Work with your agent to find out why they went through multiple price drops. Also, check how those prices match up against comparable properties in the neighborhood.
Frequent open Houses
If you see a property that has multiple open houses scheduled back to back for a week or more; that could mean one of two things. First, it could be a new development with a sales office that wants to signal that buyers and brokers are free to show up. A sales office at new development will usually do this when there are multiple units for sale at once.
Or, it could be from a single apartment. If that’s the case, then that indicates a highly motivated seller and a listing agent who is doing everything they can to generate interest. It can also be nothing more than a highly dedicated listing agent, but it’s unusual to see multiple open houses in a single week if there is strong buyer interest.
Concessions on Offer
When you are buying a New York City co-op or condo, there are various ways a seller can negotiate with the buyer. A seller’s willingness to offer prospective buyers concessions indicates his or her motivation. For example, a seller that is willing to pay the first year’s taxes or common charges. These could add up significantly and wouldn’t be offered from the get-go if there wasn’t a strong desire; verging on desperate to sell.
Aside from the price, he or she can offer to pay a portion of your closing costs. Your attorney can work out how to set aside the payments.
Listing Disappears Only to reappear
Any listing that goes off the market only to pop back in a few months is a good sign of someone who needs to sell now. Perhaps on the first round, the timing wasn’t right, or maybe they weren’t happy with the listing agent. Either way, if you see a listing go offline only to come back again in a short time that could signal that they are motivated to sell. However, it could also be that they had a signed offer, but for whatever reason, the deal fell through.
Don’t get carried away
A motivated seller is a good sign. While the seller may show more flexibility; it does not mean he or she is desperate enough and willing to stake a significant loss on their property. You should carefully construct your offer, keeping in mind if it is too low, your risk getting turned away. It always helps to explain your rationale.
Your agent can help
It is important to remember that working with an exclusive buyer’s agent means he or she is obligated to pass along any information that can help you. A buyer’s agent is well versed for signs to look for to give you the upper hand. Moreover, the agent owes you a fiduciary duty.
In short, this means your agent will pass along stuff that will help you right even if the seller and his or her agent do not want you to know it.
None of these signs is a clear-cut indication that the seller is highly motivated to sell. There are other explanations, but they do serve as a clue that they want to sell as soon as possible. Also, just because they’re motivated doesn’t mean they’ll accept any price. The important thing is to work with your buyer’s agent to find out what the seller’s reasons are for wanting to sell quickly. If you know this then you’ll have a significant advantage when it comes to negotiating.