Real estate question. What does "sellers are very motivated" mean to you?

[tzolkin]

I just found it odd that they say they're motivated but don't really want to budge that much.

The house is now priced at $121,000. Based on comps for sales in the same area, it should be priced no higher than $110,000 without factoring the repairs. It's a 2 bed/1 bath that is just short of 900 sq ft.

So, if I'm understanding correctly, they won't go any lower than $120 on a house that should only be worth $110 (but is actually worth even less since it's in need of repairs)?

I'm sure the reason they are thinking of themselves as "motivated sellers" is because they are delusional about what their house is worth. You mentioned before that they paid too much for it, so perhaps they believe their home is worth $180 or $200 (or more) and they are "giving it away" for $120 because they have other factors pressuring them to sell at what they perceive to be a loss.

 

[undertheradar]

I don't believe that "motivated" should equal "lowball" offer. Motivated could mean quick occupancy, reasonable negotiation.

As for making an offer on a perceived overpriced home, why bother? Home is in need of repairs and updates, making an offer doesn't make sense unless it is the only property within price-point.

 

[Earstou]

I know someone who bought a house with water and chimney problems. It ended up costing them way more to solve all the problems they found than they were quoted at the time of purchase. There were hidden problems caused by the water that came to the surface during the repairs.
Personally, I would run as fast as I could from the house you are describing, at the price your daughter offered. The price the sellers want is ridiculous.

 

[Darcy03231]

The sellers don't sound motivated to me. Motivated to me means that they're wiling to entertain 10-15% below their list price.

As far as the house being a "fixer upper" goes, if you know it going in and the home is priced right, I wouldn't run away. DH and I bought a "fixer upper" last fall. It was in the location we wanted, the size we wanted, and the style of home we wanted. It checked pretty much all of our boxes. However, both chimneys (furnace and fireplace) needed repair, it needed a new drilled well, new heating system, all new electrical, and serious updating. There were also a lot of trees that needed to be removed.

The seller, to us, priced it aggressively. It was priced to take all of the work that needed to be done into consideration. We looked at homes that had been "done" and they were all at least $100,000 more than the one we bought. So, while we had to fix a lot, we didn't mind. This way we got what we wanted versus what the seller may have chosen.

 

[APiratesLifeForMe2]

I consider a motivated seller is someone who really wants to sell the home and usually is willing to take an offer decently below asking. That being said, when my DH and I were trying to sell our rental property, we were motivated but didn't have much wiggle room in the price. We priced it for essentially what we owed on it and were offering to include closing costs. (meaning a net loss after realtor fees and closing costs) I'm sure our realtor advertised us as motivated because we wanted to sell it ASAP as it was empty. We could have done repairs ourselves if needed/requested but we wouldn't have been able to take 10% off asking because we simply didn't have the money to do so.

 

[tvguy]

If the seller is "very motivated" to me that means they will take just about any offer---and to me, that would be 25% or so below asking depending on the initial price but also taking into consideration how much all of those necessary repairs would cost. If the house is listed at $100,000 and the repairs were going to be $20,000, I'd offer $75,000 to start (I'm assuming that the house is priced right for the cosmetic condition and location--but not the repairs since those were not disclosed). If they were not willing to accept that there were some major repairs needed and were not willing to deal. I would walk away as well. I would also make the offer contingent on an inspection and financing and if the house did not pass inspection or did not appraise out that the sellers would refund the costs of those. Chances are the bank would not finance a house with those issues anyway.

Now, if the house is worth, in present condition, $200,000 and they were listing it at $100,000, I'd offer the $100,000 .

IMHO anyone who has their house listed at 25% more than they are willing to take isn't very smart.
Motivated to me means they are willing to do things like kick money back at closing for new carpet, or make some specific repairs that are not required by the building code, privately finance the sale, or repaint the outside in a color of the buyers selection.
The house next door was on the market for 9 months. It was vacant because the owners moved out and after 9 months the sellers were very motivated. The final sales price was 10% below the original asking price, and about 2% below the listed price at the time of the sale. They sweetened the deal by painting the house, and paying for the first 6 months of pool service.

 

[aaarcher86]

Motivated seller to me means willing to negotiate. Maybe throw in closing costs, add some kind of repair allowance, or go a decent amount below asking.

These sellers down sound motivated to me. When you decline the counter the real estate agent can tell their agent why. I wouldn't be surprised if they're upside down on the house and that's why they won't budge much.

I'm kind of surprised their real estate agent isn't telling them that they don't have much of a chance on selling like this.

 

[Jeff in BigD]

It means the agent is trying to get this one off of their books & the commission bump isn't worth the extra time.

It could also mean that the sellers are antsy & are bugging the agent, but it's probably more the first one.

 

[canadiandisneynut]

I am in real estate. Seller is motivated does not mean they will knock 25% off their list price. It means they are ready to move and negotiate. A good realtor worth their salt would have listed the home at market value (not factoring in damage) and then told their client what their true value is based on repairs needed. That new price is the wiggle room. Your DD should ask their trusted realtor to pull neighbourhood statistics and sales and use them as direct comparables to the property in question. The seller already knows what is wrong with the property. DDS realtor needs to highlight that there is a maximum price for it and if they cant move on.

 

[sookie]

Whoever said 25% off - that is pretty laughable.

I sold my house in ready to go condition. We did put seller motivated. That meant we paid closing costs and we also paid for them to paint (they didn't like blue paint in the baby's nursery - so whatever). We got a cash offer and things moved very quickly. I was happy about that.

I would advise your DD to find another house.

 

[Disneylover99]

To me, "Sellers are very motivated" means the seller has already purchased another house and doesn't want to get stuck with two mortgages. The problem is, it doesn't really mean anything to purchasers, if the sellers don't want to budge on price. But if the seller already purchased something anyways, they will be ready to negotiate soon enough if the house is just sitting on the market. It could also mean a quick closing, if that is important to the purchaser.

 

[The Mystery Machine]

DD has been looking for quite awhile. She found a small house she's intersted. She's looked at it twice. The list agent has been calling DD's agent saying that the seller is very motivated and is offering $2,500 at closing.

There are some major repairs that are obvious. Water in the basement most likely coming from a problem with the chimney. Plaster problems with a wall in the kitchen(again related to the chimney). All wood floors need to be refinsihed. Cloth electric wires not in conduit are the major ones. DD's agent pointed out the problems to the list agent and of course she acted like she knew nothing about them. The disclosure sheet has nothing checked by the seller. The house has been a rental for 2 years.

Anyway, DD put an offer in about 10% under list price but well in line with recent valid sales. The selling agent replied that they are only willing to go $1,000 under list price.

DD said no thanks and dosnt even want to counter because she's afraid that they seller will refuse to make any repairs a home inspection uncovers. DD would be out $1,3,000 + for the inpesctor, radon testing and lawyer.

Anyway, what does "the seller is very motivated" mean to you?

It means nothing to me. It is just a "buzz statement".

The fact that the seller has NOTHING on the disclosure statement and there is obvious damage means that the seller has no interest in repairing this pile of crap house.

Walking away is the smart thing to do here.

 

[Happy Snowman]

Whoever said 25% off - that is pretty laughable.

I sold my house in ready to go condition. We did put seller motivated. That meant we paid closing costs and we also paid for them to paint (they didn't like blue paint in the baby's nursery - so whatever). We got a cash offer and things moved very quickly. I was happy about that.

I would advise your DD to find another house.

I said I'd offer 25% less and it is not laughable. Typically there is a large swing in prices that the house could be listed at and if they are motivated, lowball an offer and find out what their real selling price is. Just because a house is listed at $100,000 doesn't mean that is their bottom price, it might be, but not usually. It's pretty hard to go down in price after you submit an offer. The house in question just illustrates this point and 25% is just about right for what needs to be done and market conditions according to the OP. If you continued to read, I also said that if the house was priced appropriately, I would have given a full price offer. There is a huge difference between move in ready and a house that needs thousands of dollars of repairs. I would have done my homework, like the IP's DD did, and would have known what the true value of the house was. As for paying for closing costs and painting, we have never had to do that. That is all related to market conditions and quite honestly, I would much rather pay a lower price for a house then have closing costs paid for... but most people do not understand the benefit of that.

 

[Gigi22]

Depends. We looked at a condo where the seller was motivated. Turned out, what that meant was that the seller's representative, her niece, was not going to negotiate the price at all! The condo market was poor, still is, and the starting price was already $20,000 below the price the seller paid for it. So, she wasn't going to accept anything less. It was just a hook she was using to attract potential buyers.

 

[fbb]

The house is on fire.

 

[Cannot_Wait_4Disney]

DD has been looking for quite awhile. She found a small house she's intersted. She's looked at it twice. The list agent has been calling DD's agent saying that the seller is very motivated and is offering $2,500 at closing.

There are some major repairs that are obvious. Water in the basement most likely coming from a problem with the chimney. Plaster problems with a wall in the kitchen(again related to the chimney). All wood floors need to be refinsihed. Cloth electric wires not in conduit are the major ones. DD's agent pointed out the problems to the list agent and of course she acted like she knew nothing about them. The disclosure sheet has nothing checked by the seller. The house has been a rental for 2 years.

Anyway, DD put an offer in about 10% under list price but well in line with recent valid sales. The selling agent replied that they are only willing to go $1,000 under list price.

DD said no thanks and dosnt even want to counter because she's afraid that they seller will refuse to make any repairs a home inspection uncovers. DD would be out $1,3,000 + for the inpesctor, radon testing and lawyer.

Anyway, what does "the seller is very motivated" mean to you?

It means the seller has an agent who is advertising with a stock slogan some other agent gave to him without thinking things through. All it has ever done is cost sellers and their agents time or money or aggravation or some combination of all three.

 

[Mizzoufan]

To me it means they are desperate to sell.

 

[NewRVLady]

I agree with you. In this case especially with those MAJOR repairs ( electrical, water, chimney ) I would run from this house. No way !

Me too- way too many things that could have additional problems

 

[StitchesGr8Fan]

First, if comp houses are only worth $110 without those major issues, then a loan for $120 is not going to get approved.

Second,this sounds like a terrible house for a for first time homebuyer. Especially a young single person who has to rely on her dad for maintenance help. Nothing against your daughter (I was in the same boat at her age) but it sounds like the house has MAJOR issues and probably has more you can't see. I can almost guarantee if she buys this place she will end up having to do thousands in repairs to make the house safely livable.

She should run away from this house.

 

[tcufrog]

I wouldn't buy a house like this unless I could afford to set aside a hefty amount for repairs. I also wouldn't do it without getting multiple bids on the repairs that need to be done.