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

[daughtersrus]

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?

 

[Happy Snowman]

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 .

 

[Kellydelly]

To me it means that the seller would accept up to 15% off listing price. I would assume that the sale price reflects the current condition of the home, so I would not expect the seller to want to pony up for any repairs or updates the inspection would reveal are necessary. We just bought a cottage and offered about 18% less than asking price (based on need for new roof, windows, and water hook up assessment). The sellers countered at about 11% off the asking price and we accepted. The cottage was only on the market for about 2.5 months when we put an offer on it, so I don't think the sellers were desperate yet.

 

[jrmasm]

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?

$1000 under and $2500 at closing does not seem very motivated to me.

 

[tina.tina]

In this case, it sounds like they have someone potentially on the line and are afraid no one else is interested but they don't want to come down in price. They are willing to give a little to keep your DD interested. Is she really sure she wants a house? A condo would be much less work.

Having bought a house (got a good deal for about $50,000 under what the house was worth- our total renos will be about $25,000, there were competing offers, and this is our ideal neighborhood) that has needed lots of repairs, your daughter needs to make sure she is willing to pay full price for repairs or live with it in its current condition. If I had known that my dad (an electrician and plumber) was going to immediately become seriously ill and disabled, I probably wouldn't have bought my house. We have been here 7 years and put in a heat pump, gas fireplace, new plumbing, new water lines, a metal roof, new vinyl siding, resurfaced our deck, hardwood floors, new stairs, and completely renovated a bathroom and a bedroom (down to studs and wiring). We've completely taken out a 2nd bathroom and are getting ready to tackle it.

We still have to do the kitchen, more stairs, refinish some flooring, replace interior doors, the back porch, 2 sets of front porch stairs, and a ton of landscaping!

 

[Luvchefmic]

$1000 under and $2500 at closing does not seem very motivated to me.

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

 

[powellrj]

It also depends on how much they are asking. Around here, you can get a nice house for under $100,000. We just closed on the sale of my parents condo a couple of weeks ago and we were very motivated and it sold in less than 2 weeks, but we had a few offers that we're ridiculous and we didn't even consider. We ended up getting more than asking price so we were very happy. One offer was 25 0/0 under asking, we pay closing and they wanted the furnishings. We just said no and didn't bother with a counter.

 

[morgan98]

Having purchased a home on 12/30/2014 and sold one yesterday, I urge your daughter to proceed very cautiously. If she really does like the house and thinks it is the one for her, investing in an inspection is the right thing to do. If upon inspection (at least in Georgia) if they find something major wrong (and these items seem to be fairly major) I believe your daughter can still walk away (during a due diligence period).

On the other hand, I do believe this is your daughter that is a single teacher. If this is her first home, I would be very careful about one that needs major improvements. While it may be an opportunity to gain some equity, it also has the potential to be a royal pain and VERY expensive. Now, if someone can help her with repairs on the side, that is another story.

Lastly, $1,000 off the listing price is not very motivated. That is basically a full price offer.

edited to add: I do not mean this to sound sexist, I am female myself. I am not handy with leaks or electricity so I am just offering an opinion based upon my view of how I would feel.

 

[Lisa loves Pooh]

It means the seller needs to sell.

While the home she saw needs repairs, that *might* have already been factored into the list price.

We were motivated to sell our home. We were not so desperate that it warranted not being paid a fair price for it. I hope that makes sense. We actually listed in the low end and then reduce our price to pick up traffic. We had a line we could not cross in terms of price out the door.

It is unfortunate she cannot get the home regardless.

Without knowing what was factored into the list price, I don't think anyone of us can question the merits of the negotiation.

That said, we almost bought a new home. It was a foreclosure and it was bank owned and bank pleaded ignorance. We discovered a number of things wrong which made the home something we could not go forward with. We opted to walk. What burns me is the the bank had zero legal obligation to disclose this to any seller. We were the second contract to walk. But knowing that appliances were broken and that the roof was failing would have been nice disclosures.

That said, the home was decently priced actually. The greater issue was our lack if capital to face an immediate $20K repair.

 

[Happy Snowman]

It means the seller needs to sell.

While the home she saw needs repairs, that *might* have already been factored into the list price.

We were motivated to sell our home. We were not so desperate that it warranted not being paid a fair price for it. I hope that makes sense. We actually listed in the low end and then reduce our price to pick up traffic. We had a line we could not cross in terms of price out the door.

It is unfortunate she cannot get the home regardless.

Without knowing what was factored into the list price, I don't think anyone of us can question the merits of the negotiation.

That said, we almost bought a new home. It was a foreclosure and it was bank owned and bank pleaded ignorance. We discovered a number of things wrong which made the home something we could not go forward with. We opted to walk. What burns me is the the bank had zero legal obligation to disclose this to any seller. We were the second contract to walk. But knowing that appliances were broken and that the roof was failing would have been nice disclosures.

That said, the home was decently priced actually. The greater issue was our lack if capital to face an immediate $20K repair.

That happened to our son. The furnace was not usable and was emitting lethal amounts of CO2. The program he was buying under specifically required the furnace to be in good working order. They didn't care. He walked away....and as a result, they could no longer sell the house under that program. It had to sit on the market for 3 months or something before they could start accepting offers from flippers, etc. We still can't figure out why they just didn't put in a new furnace and call it good. The rest of the house was fine.

 

[Lisa loves Pooh]

That happened to our son. The furnace was not usable and was emitting lethal amounts of CO2. The program he was buying under specifically required the furnace to be in good working order. They didn't care. He walked away....and as a result, they could no longer sell the house under that program. It had to sit on the market for 3 months or something before they could start accepting offers from flippers, etc. We still can't figure out why they just didn't put in a new furnace and call it good. The rest of the house was fine.

I don't know. I think they still want to profit above paying off the loan balance. But still. Better we just rent for now anyway.

 

[JanaDee]

Advise your daughter to find a different house.

 

[Skywalker]

Its hard to judge how reasonable they are being without knowing the value of the house and how it was priced. if the value is 200,000 and priced at 190,000...then only going 1000 below would not be such a great deal lol. If the house is worth 200,000 and is priced at 100,000 then it hard to blame them for not wanting to go much lower.

"Seller is very motivated" does not mean "seller is a sucker" lol.

I have also found that "very motivated" can also refer to closing date, as in quick closing.

 

[daughtersrus]

Having purchased a home on 12/30/2014 and sold one yesterday, I urge your daughter to proceed very cautiously. If she really does like the house and thinks it is the one for her, investing in an inspection is the right thing to do. If upon inspection (at least in Georgia) if they find something major wrong (and these items seem to be fairly major) I believe your daughter can still walk away (during a due diligence period).

On the other hand, I do believe this is your daughter that is a single teacher. If this is her first home, I would be very careful about one that needs major improvements. While it may be an opportunity to gain some equity, it also has the potential to be a royal pain and VERY expensive. Now, if someone can help her with repairs on the side, that is another story.

Lastly, $1,000 off the listing price is not very motivated. That is basically a full price offer.

edited to add: I do not mean this to sound sexist, I am female myself. I am not handy with leaks or electricity so I am just offering an opinion based upon my view of how I would feel.

In IL, you can walk away within the first 5 days after a fully signed contract. She knows that the house needs repairs and at first the list agent said they would make them. Of course she probably said this without consulting her client. If she walks away, she'd get her earnest money back but would still be out the $1,200+ for the inspection, tests and lawyer fees. If she thought that the seller would compromise on the price after the inspection, she said she'd consider giving a counter offer. That doesn't seem likely so DD is walking away now.

DH is very handy and doesn't mind helping but doesn't want it to be an every weekend thing.

She's looked at condo/townhouses also but doesn't like the idea of paying so much money every month in HOA fees.

The house is priced on the high side of comp houses that sold in the area recently. Since the list agent acted surprised, it doesn't sound like they took the cost of the repairs into consideration. Its been on the market for about s year and was WAY overpriced to start. They purchaed it when prices were much higher so I'm sure that is coming into play to although it's not a short sale.

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.

 

[eliza61]

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.


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 could mean many things.

I was interested in a house that was very old (110 year old Victorian) and need some major work. In nj though some issues have to be done before you can even get a COO (certificate of occupancy). anyway the sale price was already 100K under what the area called for so while she was motivated to sell, she knew what the house was worth and what the area was bringing in. Basically it was a house she inherited from her parents and she just wanted to sell it and go back home.
The only reason why we didn't purchase was the house was on a historical registry which brings a lot of regulations we didn't want to be bothered with.

regardless to what the sellers do your daughter should always get a home inspection.
when I sold my house I put in a brand new roof (30 year leak proof guarantee transferable) and a brand new a/c. so after that I told the buyers that I did not care what their inspection brought up. I was not making any other repairs.
They were cool with that.

I liked another house that the seller was motivated. He worked for Ikea and was being transferred some where else. while they wanted the house sold they were not going to give it away. lol. some times I wish I had brought that house. they were not going to do repairs but was very willing to drop the price.

 

[Lisa loves Pooh]

Smart move for her to walk if she doesn't think they would budge. On the house needing a roof, in the pricing negotiation, we did not mind they the did not come down much at first. We accepted contingent upon inspection. When the inspection revealed quite expensive repairs that would have needed to be addressed sooner rather than later, we also felt that the seller (bank) would not have come down much to make to worth it. Our inspection was only $400, though.

 

[Happy Snowman]

In IL, you can walk away within the first 5 days after a fully signed contract. She knows that the house needs repairs and at first the list agent said they would make them. Of course she probably said this without consulting her client. If she walks away, she'd get her earnest money back but would still be out the $1,200+ for the inspection, tests and lawyer fees. If she thought that the seller would compromise on the price after the inspection, she said she'd consider giving a counter offer. That doesn't seem likely so DD is walking away now.

DH is very handy and doesn't mind helping but doesn't want it to be an every weekend thing.

She's looked at condo/townhouses also but doesn't like the idea of paying so much money every month in HOA fees.

The house is priced on the high side of comp houses that sold in the area recently. Since the list agent acted surprised, it doesn't sound like they took the cost of the repairs into consideration. Its been on the market for about s year and was WAY overpriced to start. They purchaed it when prices were much higher so I'm sure that is coming into play to although it's not a short sale.

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.

Without seeing the house, I would have offered the $110,00- repair costs--so $90,000 or whatever and made it very clear that the lowball offer was to incorporated needed repairs that were not disclosed. I would not counter after that offer probably.

 

[LBIJim]

Off the top of my head, any listing that includes the words "motivated sellers" screams "money pit" to me. While it might not be true, I'd be extremely careful in making an offer on such a house.

 

[ariel71]

I wouldn't call that a "motivated seller". But then, the terminology would be moot to me because I'd most likely be walking away no matter how low they went. Those are already some pretty major issues - god knows what else is lurking. I wouldn't trust them to make quality repairs themselves, and even if a theoretical discount is sufficient for DD to pay for repairs after buying (which it probably wouldn't be), fixing more significant issues like these are stressful, inconvenient, and time-consuming. Sometimes it's worth it to pay more for peace of mind.

 

[Andtototoo]

Real estate is a fascinating psychological game in terms of what sellers have convinced themselves their house is worth. Or what deals buyers think they can get. Either party can be delusional.

Very motivated to most people means, "I am willing to accept lower offers if the sale can move fast or I'm willing to throw in substantial incentives or fix the most egregious problems asap."

Very motivated can mean to the delusional that "I'm willing to throw you a bone."

Seems like these sellers are in the latter category.

We just encountered that ourselves. Realtor called us with a house that met our criteria (if we were willing to do a MAJOR fixer upper) and the sellers were "very motivated". Well, the house is priced 75% over comps. 75% Unbelievable. Their idea of being "very motivated" was to offer the furniture as part of the deal. The furniture they bought when they bought the house in 1977. (Oh and they'd done NOTHING to the house since 1977. It needed to have EVERYTHING re-done. Everything.) But they thought the scratchy, plasticky couch in dark harvest gold and the marked up wood grain laminate dining room table were huge incentives. LOL Totally delusional. My realtor apologized for wasting our time.

If this were my daughter, I'd be advising her to run away from this house. A chimney fix is seldom easy or cheap. It most often is a big hairy mess and the fix uncovers serious rot/mold problems that can quickly add to many thousands of dollars. Run, run away, fast as you can!

(Of course, buyers can be just as delusional. My BIL was selling his house at $88K and was "very motivated". $88K was basically the appraised price. He had quite a few offers at less than 50% of his asking price because they thought "very motivated" meant desperate. He got better offers when he had his realtor remove the "very motivated" wording.)