KNOWING THE SELLERS MOTIVATION IS KEY TO MAKING AN ACCEPTABLE OFFER
Finding the sellers motivation is key to making an acceptable offer. Loosely deﬁned, motivation is “a force or inﬂuence that causes someone to do something”. Some days I’m highly “motivated” to wake up and get right to the gym for an intense workout comprised of equal parts cardio exercise and strength training. Other days that “force” is missing from my being and I may decide to “phone it in” at the gym with a shorter session (or perhaps not make the trip at all).
Motivation is a critical component of real estate sales affecting both buyers and sellers. A seller who’s accepted a job transfer and needs to be in a distant city by month’s end may be motivated very differently than one who’s decided that they simply wish to downsize now that retirement is close at hand.
The coastal communities of eastern North Carolina have a heavy concentration of homes used by their owners as second or “vacation” properties. Other property owners in the area may have purchased real estate speculatively as an investment, or with a plan to use it in some way that never materialized. When these owners make a decision to bring a property to market their motivation can be extremely different than would be the case if they were selling their primary residence.
Preconceived Buyer Notions; Some buyers with whom I’ve worked have come to the area with preconceived notions of their bargaining power when ﬁnding and negotiating to purchase a property. Perhaps they got a great deal on another home in a different market or they’ve heard (sometimes from unrelated sources) that they should expect sellers to accept just about anything thrown their way. The truth of the matter is that each market is different and what may be happening in one market isn’t necessarily what you’ll ﬁnd in another.
Seller Concessions; While market conditions may still favor buyers in certain segments of real estate sales within Dare and Currituck Counties the scale may not be tipped as far to one side as you think. A review of Outer Banks Association of REALTORS MLS statistics tells an interesting story. For the period between January 1, 2014 and August 31, 2014, sales of single family homes (all dual county areas/all sizes) indicates that the sellers of those properties achieved 93.95% to 95.92% of their asking price on average. Would you have expected larger concessions from sellers? I often refer to this list vs. sale price ratio as Numerical Motivation.
Seller Motivation; These moderate seller concessions of list price (or numerical motivation) ﬁgures in Dare and Currituck Counties could be attributed to several things. The ﬁrst of those may likely be that sellers and their agents are carefully studying the market to determine an initial list price that is based on high quality comparable sales. As a result, buyers are generally agreeing with those values and ﬁnding comfort that the price they’ve negotiated is fair. Another reason for the close margins is most surely attributed to the motivation of many sellers in these coastal communities. More often than not, I encounter sellers who want to sell but do not necessarily need to sell. As a result, they enjoy the luxury of time and can scrutinize each offer as it’s presented. These sellers are less likely to jump on the ﬁrst horse that comes down the trail. Instead they may patiently negotiate with the buyer until both parties achieve a meeting of the minds or step away from the table.
Numerical Motivation; If you’re a buyer seeking a home in this marketplace ask your real estate professional to provide you with Numerical Motivation ﬁgures for both the community in which you’re looking as well as the type/size of home you hope to buy in that same community. Understanding nuances of a marketplace will help you prepare for the day when you say to your agent “I’m ready to make an offer”!
–blog provided by Wm. Allan Rodgers, Jr GRI, SRS – Broker Associate – CENTURY 21 Nachman Realty and Ocean to Sky Realty