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Motivated Sellers: Why Would a Seller Sell a Home at a Discount?

Cash for home: Motivated Sellers: Why would someone sell a home at a discount?

Many people ask why a seller is motivated or why a seller would sell at a discount. Well if you think about it, there are so many situations and reasons for this. First the seller needs money. Second the seller just doesn’t want to deal with it anymore. Third the seller is losing money. Fourth the seller is losing the opportunity to making money with something else. Fifth the seller sees a chance their credit is being ruined or could be ruined. Sixth that they need a quicker sale and not a long sale that the market may show them. The list is so long, but let me go over the basic situations that sellers have that go hand and hand with a motivated situation where a seller just wants to sell.

Vacant House-A vacant house usually has lawn that needs to be mowed. In certain areas you have vandals that break into the house or property. Also that payment a seller makes on the vacancy is very expensive.

Expired Listing-A seller feels like they listed it for 6-12 months and gave it their best shot with an agent and couldn’t get it sold, so they feel like they are now motivated and out of answers after a lot of marketing.

Problem Tenants-Tenants can cause $10,000-$20,000 damage, it happens. Tenants can not make their payments or make their payments late, it really can hurt a landlord with their cashflow.

Behind on Payments- A seller can always be just barely behind on payments and barely keep up due to an ARM payment or due to negative cash flow or just too high of a payment. Being behind on payments every month with “rolling 30 day lates” adds up in late fees.

Facing Foreclosure-Sellers often realize selling a home when you are only 30-60 days late is a lot better than waiting until you are in foreclosure proceeding or worse yet the bank gets it back, sometimes the seller will just do a mn short sale .

House Needs Repairs-It’s very common that a rehabber runs out of money or that the house needs a lot of money in repairs and the seller simply doesn’t have enough money to fix it. Or they maybe need to fix it before someone can even legally occupy it, which is compounded by vacancy and them making the payments themselves.

Making 2 payments at once- This is one of the most common ones out there. This happened a lot in 2004-2005 when people built a new home and figured they would just sold the home they are moving out of. They had always seen houses sell so fast, and can’t understand why it hadn’t sold in 6-9 months, you can only tread water so long when making 2 mortgage payments, you usually are forced to rent it out or sell.

Builder Discount-Builders give great discounts all the time. Did you know builders will give 15% discounts up to 30%+ discounts. I can tell you the 15% discount is a direct discount to the buyer. If they can save on holding costs on the market, and save on real estate agent fees, etc. they can pass the savings on. Also builders are in the business of turning inventory, so it doesn’t make sense or them to hold onto the property very long.

Code Compliant- City Rules, R & R’s etc. Many people hate dealing with the city and all of the time and rules , not to mention all of the costs involved with repairs and the vacancy costs along the way while the house is not habitable. Especially if someone is not in that business, this is not their cup of tea.

Divorce- When people are getting divorced, they just want to part ways and don’t want anything that reminds them of owning things together, so they just want to get out, sometimes just at a discount just so they can be done with it. Sometimes nasty divorces cause even more motivated sellers.

Relocating-If you were offered a job in another state, do you see why you’d want to get rid of your house ASAP? This happens all of the time, not every employer pays for relocation expenses. Also many people just go and take the new job and are left with the old house trying to get it sold still on the market and make the payments along the way, this is expensive.

Job Loss- I believe this is 1 of the top 2 reasons for foreclosure from what I’ve heard. We believe most homeowners may live paycheck to paycheck, and would you believe on a 30 year mortgage that someone could lose “a job” at least once in 30 years? Sure that’s very believable, so you can see how almost anyone can be motivated at some point in their lives. 3-5 month job loss will usually get you behind in payments you can’t catch up on.

100%+ Over Financed-In today’s market 2007-2008 to present, this is one of the most common sellers I see. Many sellers who purchased 2002 or later with 5% down or less are finding they just don’t have enough equity to get out of their house. In this case you would do a “short sale” with the bank and get out of your situation as soon as you can. This is quite common these days. Email me if you are a seller in this situation or any of the above and below.

Owe certain Liens- What if a seller owes IRS liens, any property tax liens, back child support alimony, etc. People feel crunched they need to sell and get things paid off.

Bankruptcy-Many sellers choose bankruptcy and don’t want to deal with a house. Bankruptcy won’t stop a foreclosure, but it slows it down a bit if it’s before the sheriff sale. When a seller is going through bankruptcy and all of this work, they just want peace of mind.

Out of State-This goes with job relocation, I suppose their are situations that are different, such as owning rental properties in other states. I have tried this, I would say it has to be a good deal to do this, and you must have a good property management company. Otherwise many people soon become sellers as they don’t want to deal with long term rentals and the renters, it’s a little bit out of their control.

Medical Bills-This is possibly the #1 reason for foreclosure. When people get medical bills, they are usually very large and will just wipe someone out. When someone has large bills they can’t pay, they may be forced to just sell quickly therefore they become motivated. Health issues happen to just about everyone.

Condemned-This kind of goes with code compliant above. Condemned homes by the city mean they aren’t habitable by the city. This means the seller is stuck making the vacancy payments and working with the city and getting the repairs done and spending all of the time. Seller’s can get burnt out on this really quickly and lose money very quickly on this also.

Estate Sale(Death)-A death of a family member is enough stress on some people, add a house to that, and it’s a little too much stress and time. Many families also want the equity and cash that a sale of the house will bring. Many heirs don’t just want the money, they “need” the money. Many heirs want their money now and don’t have time to deal with it, and just want to get out fast.

As you can see from above their are so many reasons property owners become sellers and become motivated. Most times it’s because of lack of money or lack of time. If you are a motivated seller or know of any motivated sellers let me know, I find buyers with win-win solutions to help get your properties sold. I will tell you upfront over the last 2 years this part has changed a lot as I have found most seller’s simply owe too much on their house, I ask you then do you have a house in MN for sale?, if so please call me, a “short sale” is needed.

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Motivated Sellers: Why Would a Seller Sell a Home at a Discount?

Cash for home: Motivated Sellers: Why would someone sell a home at a discount?

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