Many homebuyers assume that the only ways to reduce the final cost of what’s likely to be the largest single purchase they ever make are to drive a hard bargain at the negotiating table or find an optimal loan deal from mortgage lenders that operate in their area.
Those aren’t bad strategies, but they aren’t the only options either. No matter how much house you can afford to buy or where you’re looking to plant your flag, you can significantly reduce your purchase price (and monthly cost) by seeking out motivated sellers—homeowners who, for one reason or another, need to offload their houses sooner rather than later.
Finding motivated sellers is easier said than done, though. These are a few of the tells you can look for to determine who’s motivated and who’s merely interested, plus a handful of strategies you can employ to ferret out hidden pockets of motivation.
How To Tell When a Seller Is Motivated
No list of tells is ever foolproof, but these signs generally point to seller flexibility:
- They’re Working Without a Broker: A “for sale by owner” sign usually reveals motivation. DIY sellers aim to avoid paying broker commission, perhaps reasoning that they can find buyers and negotiate effectively without professional help. Perhaps it works, but DIY sellers very often find themselves accepting below-market offers with buyer-friendly terms simply to be done with the whole process. That’s great news for bargain-hunting buyers.
- They Need to Move Quickly: Sellers generally don’t include phrases like “We’re moving next week and need to sell immediately” in property listings, but it’s also not too hard to tell when someone needs to get out of Dodge. Even if the home is professionally staged, look for signs that the sellers are on the move: empty closets, boxes in the basement or garage, shipping containers or dumpsters in the driveway, and the like.
- They’ve Already Purchased Another Home: For most sellers, it’s simply not financially sustainable to carry two homes for very long. Many sellers begin looking for a new home to buy as soon as they list their old property. In some cases, they find and close on the right place more quickly than they expect, while their old home takes longer than anticipated to sell. The tells are similar to “fast mover” tells—the listed home might appear normal at first glance, but it soon becomes clear that (literally) nobody’s home.
- They’re Going Through an Unexpected Life Change: Many motivated sellers are facing unexpected life changes or challenges, such as an elderly relative who requires regular care, a serious illness in the family or a sudden job loss. In such situations, sellers need to raise money or move quickly, increasing their urgency.
- They’re Downsizing: Homeowners downsize for many reasons, but the common thread is that they need less space. And, all other things being equal, that means they’re going to pay less for their next home, whether it’s a rented apartment or pint-size owner-occupied property. With less financial pressure looming for the foreseeable future, they’re more likely to accept a lower price.
- They Inherited The Property From a Deceased Relative: Homeowners who’ve recently inherited property have lots on their minds. In many cases, they’re willing to sell quickly and reap a slightly smaller windfall, rather than hold out for the best possible price and prolong the complex, emotionally trying process of winding up their loved one’s estate.
- They Don’t Live in the Area: Absentee owners are often motivated sellers, as the burden of maintaining a property from afar can be tiresome. Moreover, absentee landlords may have been earning passive income from their properties for years or even decades, so they’re already well ahead on their investments and may not mind selling for less.
Finding Motivated Sellers in Your Neck of the Woods
If motivated sellers aren’t jumping out at you in the regular course of your homebuying journey, take matters into your own hands and use these tactics to find motivated sellers who might not be visible through other means:
- Post Craigslist Ads: RETipsterencourages enterprising homebuyers to post Craigslist ads announcing that they’re in the market for new homes. This is a tried-and-true strategy for landlords looking to accrue new property at below market value, but it works well for prospective owner-occupants as well.
- Put Up Signs Around Town: The same logic applies here: By posting signs announcing that you’re actively seeking a new place to live, you’ll attract interest from sellers who don’t want to wait for you to come knocking on their doors (or even go through the traditional listing process at all).
- Use Door Hangers: Door hangers are even more direct, though of course you have to spend some money upfront to design and print them.
- Find Free-and-Clear Owners: Scan your local property records to find folks who own their homes free and clear. Homeowners who don’t have to worry about zeroing out their mortgages may be willing to accept a discount, since they’re likely to have quite a windfall on their hands.
- Look for Distressed Properties: Since the owners of distressed properties literally can’t afford to remain in their homes much longer, they are often highly motivated to sell. Use county property records and signs of disrepair to find potential candidates.
- Patronize Garage and Yard Sales: A garage or yard sale is often the first sign that the homeowner is looking to sell. Don’t be shy about sidling up to garage sale holders and asking if they’re looking to move, even if you don’t see a “for sale” sign in the yard.
Motivation Isn’t Everything
Finding a motivated seller isn’t a cure-all for home-buying woes. Humanity’s weird and wonderful complexity shines through in high-pressure situations like real estate closings. And barring a truly fortunate confluence of events, even the most enthusiastic sellers aren’t keen to give their homes away for nothing.
As a buyer, it’s up to you not to let up, to continue to seek the best possible bargain, no matter how easy the negotiating process appears to be. Anything less, and you’re likely to leave money on the table.