Home shoppers outnumber home sellers in many places. If you’re a home buyer, you need every competitive advantage you can get. That’s why it pays to know how to find motivated sellers and persuade them to choose you.
The definition of “motivated seller” has changed since the depths of the economic crisis about a decade ago, when many motivated sellers were trying to avoid foreclosure. There are fewer of these desperate sellers now, but you can still find motivated sellers if you know where to look.
What is a motivated seller?
“A motivated seller is someone that needs to move out quickly,” explains Sonia Figueroa. Figueroa, a real estate agent with Century 21 Affiliated in Chicago, lists common motivators:
Identifying a motivated seller
Here are telltale signs that the seller is motivated: The home is priced to sell quickly, it has been fixed up and staged, and the listing photos were taken by a professional photographer.
Another sign is when the seller is willing to negotiate.
And sometimes a home’s listing contains the phrase “motivated seller,” or the seller’s agent says the seller is motivated.
Tips for buying from a motivated seller
Offer to solve the seller’s problem. “From the very beginning, having your agent tell the listing agent that you will be flexible and you want to help them out” can give you the competitive edge, Hennessey says.
Get preapproved for a mortgage. With a mortgage preapproval, you can close faster and the seller is assured that the deal won’t fall apart because of problems getting financing.
Offer flexibility on the closing date. Your offer is more competitive if you can adjust your timing to the seller’s timing, Hennessey says. One seller might want to close as quickly as possible, and another might want to wait until the end of the school year.
Offer a larger-than-usual earnest money deposit. Offering more than your area’s customary deposit is a signal that you’re serious. “My sellers always ask me what the deposit is,” says Creig Northrop, president and CEO of Northrop Realty in Clarksville, Maryland. A 1% deposit is standard in Northrop’s market. More than that is “showing sincere interest. So if you can get in the 2% to 5% range of deposits, you’re in really good shape,” he says.
Pay your closing costs instead of asking the seller to pay. Depending on where you are, it might be customary for the seller to pay certain closing costs. Offer to pay them yourself.
Offer to rent the house to the seller for a limited time. Sometimes sellers want to close the sale of their home a few days or weeks before moving into their next home. You can offer to let the seller rent the home for a few days or weeks. Customarily, buyers charge a daily rate of the mortgage payment divided by the number of days in the month. Your offer will stand out if you don’t charge rent.