Every home for sale in LA has a story behind it. Likewise, every homeowner has specific reasons for selling. Guess what? If a buyer can find out why a homeowner has chosen to sell, the information could prove helpful to writing the best possible offer for both parties.
This is not to say that finding out is always possible. Sometimes you know up front; other times you need to ask. And in the latter case, asking may or may not result in an answer. But it’s still worth a try.
Foreclosures and Short Sales
Two examples of seller motivations buyers would know up front are foreclosures and short sales. Buyers know up front because both scenarios are normally part of real estate listings. Agents want foreclosures and short sales known from the very start.
In the case of a foreclosure, the particular home for sale is now owned by the mortgage lender that repossessed it. That mortgage lender has probably been working on getting things settled for quite some time. This gives you an advantage in that the lender might be willing to take significantly less just to be rid of the property.
On the other hand, a foreclosure may not be in the best condition. It is not unusual for foreclosure properties to need a lot of work. As for short sales, they are a different animal altogether.
A short sale usually occurs when a homeowner is facing foreclosure. He wants to sell as quickly as possible so that the home isn’t taken by the bank. That way, he keeps the foreclosure off his credit record. Short sales are designed to be fast, so buyers can generally get good deals. But forget the contingencies. Shorts sales are generally as-is transactions.
Relocating for a New Job
Sometimes homeowners decide to sell because they are relocating for a new job. Their situations are not as dire as someone facing foreclosure, but they are motivated to get a deal done as quickly as possible. This is a scenario in which the buyer does have some leverage on price. But once again, adding contingencies may scuttle the deal.
Certain relocation scenarios open the door for lease-buy offers. In other words, the buyer would offer to lease the home for a given amount of time before outright buying it. A portion of the monthly lease payments would be applied to the eventual purchase transaction. It may be attractive to the homeowner because it allows him some additional income that could help cover relocation costs.
A Death in the Family
Unfortunately, a home for sale may be on the market because its owner has died. No one in the family wants to keep the house, so it is being sold instead. This could be both good and bad for buyers. It is good when family members just want a quick sale so they can move on. But it can be bad if the family is determined to hold on until they get exactly what they want.
The good news is that these types of scenarios are usually open to negotiations. It never hurts to make an offer and see if a counter comes back. Furthermore, counteroffers tell you a lot about what sellers are thinking. The right information can help move negotiations along.
It is true that buyers don’t always know why sellers have chosen to put their homes on the market. But when that information is freely offered, it can be a tremendous help to buyers. Knowing a seller’s motivation gives buyers a good idea of what it will take to secure a winning deal.