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When it comes to breaking the real estate code, knowing the different types of motivated sellers can help you make smart decisions.

By Laura Agadoni | Mar 30, 2015 5:21PM

Break the “motivated seller” code and explore the best ways to successfully negotiate.

During your house-hunting adventures, you’ve probably seen the phrase “motivated seller” at least once. Your real estate agent might have excitedly told you that a motivated seller owns the house you’re about to see, or the phrase has been touted in the listing details.

But what does “motivated seller” really mean? If the house is for sale, doesn’t that automatically make the seller a motivated one?

When it comes to breaking the real estate code, knowing the different types of motivated sellers can help you make smart decisions as you work with your agent to get the best deal.

1. The desperate seller

Sometimes a motivated seller is truly that — motivated. In this case, “motivated” is just a nice way of saying the seller is desperate to sell quickly.

Maybe the house lingered on the market too long, and the seller is over the whole process and just wants someone to make an offer already. Maybe a divorce is forcing a quick sale, or perhaps a work-related relocation makes a fast transaction more desirable.

What to do: If the seller is truly desperate, you should definitely offer less than asking price. Some agents recommend offering up to 30% or 35% lower than fair market value.

Rhonda Duffy, an Atlanta, GA real estate broker and consumer advocate, says all buyers should start by offering 80% to 90% of list price. “Most sellers can’t afford to sell too much below asking price.”

2. The tricky seller

This seller might have made a bad deal or invested in a less-than-perfect property — and now he wants to get rid of it, pronto.

One way to do that? Entice buyers with the “motivated seller” catchphrase.

Think about it, though: if the property were a true gem, the seller should have no trouble selling for around fair market value.

But if the house does have problems, the seller is probably willing to make some concessions or offer a discount. Be careful. If the house was not a good buy for the seller, it might not be for you either.

What to do: Get a home inspection and city planning report. Don’t hesitate to pass on the house if the inspection shows there are major problems, or if you discover that a new supercenter or gas station is going up next door. Tip from Duffy: “If you see a vacant lot nearby, ask the neighbors what’s going on.”

3. The savvy seller

People sometimes use “motivated seller” as a ruse to trick you into a bidding war. If you think you’ll get a good deal on the house, chances are, others do too.

What to do:

1. Get a mortgage preapproval, not a prequalification, letter. A prequalification letter is only an estimate of how much you might be eligible to borrow and doesn’t guarantee you’ll get the loan; a preapproval document from a lender offers concrete details, including how long the offer is valid.

2. Make a specific offer that mentions only the price. (Adding stipulations might irritate sellers.)

3. Write a love letter opining on your love for the house. Remember, selling a house isn’t always a logical transaction. It’s often an emotional one.

4. The selling seller

Some sellers like to say they’re motivated when they’re really no more motivated than the average seller — they just want to sell their home.

You can’t expect to find out the true story either, because the seller’s agent can’t divulge information to you that the seller wants to keep private, such as how low the seller will go.

What to do: If you don’t want to play games and just want the house, offer asking price if it’s fair market value. If you offer asking price to any seller, motivated or not, chances are, you can expect to get the house as long as you don’t ask for any contingencies, such as asking the seller to pay for closing costs or a home warranty, or asking for a longer-than-normal closing.

The bottom line? Know that “motivated seller” is not always a meaningful phrase. In fact, it often means nothing.

Laura Agadoni is a landlord and a journalist whose articles appear in various publications such as The Houston Chronicle, The Motley Fool, San Francisco Gate, Zacks, The Huffington Post, The Penny Hoarder, and Arizona Central. Visit her website at