I think I mentioned in an earlier blog that when buying a home "it takes two to tango." Successful real estate deals usually require a motivated buyer and a motivated seller. Take either the buyer or seller out of the equation and pulling a deal together gets a whole lot more difficult.
To be a motivated seller the vendor is usually under some form of pressure be it time, financial or emotional. The degrees of pressure do vary from slight pressure to sell through to extremely urgent pressure to sell. If the buyer is able to accurately determine the type of pressure and level of pressure this can put the vendor at a disadvantage in terms of getting the best price or terms for the property sale.
Sometimes it is as simple as seller having already set his/her heart on buying a property they have seen elsewhere. The seller may have even put an offer on the other property with a settlement date already decided. The seller might be relocating to a new town to take up a new job. If this is the case, then he or she might need to start work on a particular date or miss out on the job.
Either way, the seller will be under some pressure to sell the property by a certain date or have to face the prospect of taking on two mortgage payments at the same time. The seller might not be in a financial position to do this or may not want to take on the extra financial commitment.
Having two mortgages or temporary finance can be hugely expensive and can deplete a bank account relatively quickly. The seller will often reluctantly come to the conclusion that he or she is better to accept a lower offer to avoid over extending themselves financially. An offer with few if any conditions attached is strong bargaining point for buyers in this type of situation.
Emotion situations or family changes can also help motivate a vendor to sell quickly and at a realistic (or bargain) price. There could be a family crises such as a death in the family, divorce, illness or any one of many personal reasons that could force a quick sale.
The main thing from the buyers point of view is to understand that a crisis can, but does not alway, result in the vendor being motived to sell. Although the facts may be true, the vendor might not be prepared accept a quick sale at a discounted price. Beware of real estate ads that say things like "Deceased Estate", "Vendor Says SELL!", "Vendor Moving Abroad!". Just because there has been a death in the family or that someone is relocating overseas does not automatically mean that the vendor is motivated to sell, or that they are under any financial or time pressure. The ad headline might just be an attention grabber designed to generate phone calls and leads rather than sell the home.
However, there are times when a vendor is prepared to genuinely accept a big drop in the selling price to secure a quick sale. The listing agent will seek permission from the seller and will post this information along with the listing in a Multiple Listing Service. The listing agent may also inform other agents of the situation. When the seller's intentions become 'common knowledge' to Realtors, the agent will know when a seller is truly motivated to sell quickly as opposed to 'hype' designed to elicit interest in a property.
In a situation where the agent may be acting as an agent for the seller, or as a "dual agent," representing both the buyer and the seller, they cannot legally provide the buyer with information that would give the buyer an advantage over the seller.
So, if you are looking to buy a property it always pays to find out something about the seller's circumstances. Find out why the vendor is selling and how urgent the sale needs to be. If you are able to help the seller by putting in a cash unconditional offer with a quick settlement time frame, then you could be in a strong position to get a excellent deal.
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