If you are actively looking for a home, you've seen them. Probably a lot of them. Overpriced homes for sale. But what if you like that house? Will the seller ever negotiate to a reasonable price on that home you want to buy in Connecticut?
You won't know unless you have the right agent on your side, and unless you try. It's important to have a good understanding of the different types of seller motivations that influence listing prices and the amount of negotiations that seller is willing to consider, in order to arrive at the decision as to whether to place an offer on that particular house or not.
Sellers have their own pricing mentality, or level of motivation, that can pretty much be summed up into three categories:
CLEAR CHOICE SELLERS Have to or Must Sell – This homeowner absolutely must sell the home, and the asking price clearly reflects that. These homes are generally the best deals out there, and have an excellent chance to sell in any type of market. They attract more qualified and realistic buyers, and sell at higher list price to sale price ratios.
THE MAYBE SELLERS Should sell, but want top dollar – This homeowner does have a real need to sell, but has not priced the home correctly for one of many possible reasons. They may feel as if they have to "net" a certain amount, and can be stubborn about it, until enough time passes wher it becomes more urgent. They may also feel that they can test the market at a higher price to try and get more money, and gradually reduce it. They may also try and mask this to their own agent by insisting to put "negotiating room" in the listing price.
SLIM CHANCE SELLERS If I get my price, I'lll Sell – This type of homeowner doesn't really need to sell the home, but if they can get their price, they will. If not, they will just stay in their home, and not be too concerned about their house not selling. There is a strong probabilty that this type of homeowner will not sell their home in today’s market, so home buyers who actually view this type of property are just wasting time. This listing will most likely end up as an "Expired"
So how is a buyer to tell which type of seller is which?
Truly, that's your agents job.Your agent should have the skillsets to "read between the lines" of the listings that are most likely to interest you, and discuss whether the seller appears motivated or not BEFORE you even go look at the house. That could be in the form of getting you prepared to make an offer on a house that looks like a great deal, or preparing you for a house that meets your needs and wants but is priced too high for the market.
Market time, showing availability and prior listing history on the house, including how many times it has been listed, what the price reductions were and when, and also public records search are all useful in determining seller urgency
I am always of a mind to try and negotiate with any type of seller, even if it's a "Slim Chance or a Maybe". Circumstances for that seller could have changed this morning or even yesterday, and that seller might be willing to listen to an offer today that they would not have even dreamed about considering just last week.
The Slim Chances and the Maybe's have egos to contend with, but we would be remiss if we didn't consider their agent's egos as well. So now we have yet another fly in the ointment that has to be handled delicately, if it's going to be at all effective.
I remember one particular negotiation that I knew would be a tough one based upon pricing and the agent's ego. It was an estate property, so the bottom line for the sellers was the money, period. I called a meeting with the sellers agent and sellers, and explained to the agent that we were bringing in an offer that was significantly less than the asking price, and I wanted the opportunity to present it in person, rather than the by the standard back and forth via phone or fax. He agreed.
We met at the house, and I came prepared with about an inch and a half of comparables, statistics, and the like- never once disparaging the listing agent for pricing the home so improperly. The sellers agreed that after going through all of my statistics that my pricing was correct. I took all of the heat off that agent for presenting what was considered a low offer, the agent was grateful for saving face, and we put the deal together. The sales price to list price ratio on that house was 71 percent. I'm proud of that, and that's not the only one. So it can be done. If it's the right mix, the right negotiations and the right house, it doesn't hurt to try. The right agent representing you doesn't hurt, either- and I just happen to know someone..... (me!)
If you have a question about buying or selling Real Estate in Fairfield County, and are in need of representation, I invite you to contact me, and if you have an idea for a topic that you would like to see on The CT Realty Blog, please include it in the "Post a Comment" section link below this post. We appreciate the feedback and look forward to providing you with the best real estate content, advice and service in Fairfield County, Connecticut.