Question Details

J R,  in New York, NY

REALTORS...I have noticed a large number of unmotivated sellers lately....

Asked by J R, New York, NY Tue Apr 15, 2008

In the past 4 months I have had 4 offers rejected either with the comment they have decided not to move, or no counter to an overpriced listing. Do you qualify your sellers as carefully as you qualify buyers? A couple of these the spouses were not on the same page as far as desire to sell. I've shown homes where the owner was present and has told me they might change their mind about moving. Others seem not to have done any looking for their next home until the offer came in and are surprised at prices. It makes me wonder how many homes I have shown that are listed by unmotivated sellers.

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I'm more familiar with this situation from the investor side, where the bread and butter comes from motivated sellers. It's the unmotivated ones we leave for Realtors! (I'm a Realtor, too, and became one after running into a lot of people who wanted to sell, but weren't motivated enough to go the investor route.)

JR: I mean this totally as a compliment, but you come across in many of your answers as straightforward, tough, very practical. My suggestion is to apply some of those same techniques, in a gentle way, to sellers and potential sellers.

For instance, as investors, one question we ask to determine motivation (and to get sellers thinking about their options) is: "What will you do if you're not able to sell your house?" If someone says, "I don't know. We just have to sell," they're motivated. If someone says, "Oh, well. I guess we'll just stay here," they're not motivated. Now, the second answer may be OK from a Realtor standpoint, but it does separate the serious sellers from the more casual ones.

One other question investors always ask is: "Where did you come up with the price you're asking?" If someone says, "I had a Realtor run comps," investors figure that (usually) the seller has done some homework and has a basis for the price. They're being realistic, more or less. But if they say, "Well, Joe's down the street sold for $X last year, and my house is nicer," we figure it's probably overpriced. Or, worse, "Well, that's what it appraised for when we got the HELOC in 2006." That's a candidate for a short sale. But they don't realize that...at least not yet.

Investors also ask, "Why are you selling?" But they don't stop at the surface response. ("Oh, I'm just relocating.") It's critical to find out the motivation. Well, they're "just" relocating because their job was eliminated...and they can't afford the mortgage any more.

And some investors use a lot of pre-qualifying questions. And they make sure that, when there are multiple owners, that all owners are present and involved during the offer process. So an investor might use a test offer: "If I were able to give you $200,000 cash for your house, in 5 days, and pay your moving expenses to West Virginia, is there any reason, Mr. and Mrs. Smith, why you wouldn't accept?" Use a similar question as a Realtor: "Mr. and Mrs. Smith. Your house will be listed for $225,000. If you were to receive an offer of $200,000 from a prequalified buyer who could close in 45 days, is there any reason why you wouldn't accept?"

You say some sellers "seem not to have done any looking for their next home until the offer came in." If you're the listing agent for their property, I assume/hope that you've offered to show them properties...and thus pick up commissions both on their sale and their purchase.

I'm sure all of this is taught, in some variation, in Realtor marketing courses. It's drilled into our heads as investors.

The point is: Yes, you should qualify your sellers. Otherwise, you'll be wasting a lot of time. Further, in addition to qualifying them, you've also got to present some scenarios and get their buy-in...you have to prepare them.

Hope that helps.
1 vote Thank Flag Link Wed Apr 16, 2008
Don Tepper, Real Estate Pro in Burke, VA
MVP'08
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Some sellers are living in "yesterday's" market where the bidding wars and escalation clauses were in full force. They have not accepted that the market has declined. I deal with sellers like that on a daily basis. Bottom line is there are listings and there are "saleable" listings. If the house isn't priced to sell, then it will sit there in excess of a year or even 2 (if the seller is not going through a financial hardship and loses the home). Many agents are not educating their sellers accordingly but on the same note, some sellers will just not listen. Good luck to you.
1 vote Thank Flag Link Tue Apr 15, 2008
Don great answer! JR nothing you can do about other agents not taking motivated seller listings... However by posting your thoughts here maybe more agents will learn.. so thanks for posting it!
I would just like to add that if you don't pre-qual sellers just like buyers, you are going to waste a lot of your time and money. Yes it is true that listings are the name of the game in real estate, but not over priced listings.. as I have stated before a motivated seller is willing to start out as the lowest priced property in their area, 10% below is best when ever possible! today I listed a property 15K below others oin the area, hoping to create a quick sale.. as agents we do our clients no good and raise false hopes when we list properties to high, we spend the entire listing time chasing the market, then it will expire and they will list it with another agent for less!! If someone does not have to sell, in this kinda market they probably aren't goiong to meet your motivated seller list!!
good luck out there
Leanne
0 votes Thank Flag Link Wed Apr 16, 2008
JR: I mean this totally as a compliment, but you come across in many of your answers as straightforward, tough, very practical. My suggestion is to apply some of those same techniques, in a gentle way, to sellers and potential sellers.

For instance, as investors, one question we ask to determine motivation (and to get sellers thinking about their options) is: "What will you do if you're not able to sell your house?" If someone says, "I don't know. We just have to sell," they're motivated. If someone says, "Oh, well. I guess we'll just stay here," they're not motivated. Now, the second answer may be OK from a Realtor standpoint, but it does separate the serious sellers from the more casual ones.
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Hi Don! Yep, I got all that! My problem is with OTHER REALTOR'S unmotivated sellers. The ones I bring buyers to. :) My listings sell pretty quickly. I had one sell in 10 days about a month ago.
0 votes Thank Flag Link Wed Apr 16, 2008
You're right, Ginger, too many agents are telling sellers what they want to hear. Unfortunately my customers still want to look at those homes and make offers that are turned down.
0 votes Thank Flag Link Tue Apr 15, 2008
The market is still changing. Sellers will get a dose of it soon enough. Just keep plugging away just like you have been doing. The past three offers I have written for homes have been under contract before I could email the agent. Someone is buying!
0 votes Thank Flag Link Tue Apr 15, 2008
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