When it comes to buying a home, you need to know who you're up against.
It's no secret that sellers want the price to be as high as possible while buyers want a deal. In 6 Ways to Spot a Desperate Home Seller, Ann Brenoff lists 6 ways to spot a seller who is desperate to unload. Of the 6, none include price. Much as the three most important things in real estate are location, location, location, the 6 most clear ways to spot a desperate seller are price, price, price, price, price and price. Any time you locate a property listed significantly below its market value you can be sure it is being sold by a desperate seller.
I respect the fact that Brenoff did not include price among her 6 signs. Price is just a little too obvious, and instead she decided to dig deeper. Her 6 signs are all good indicators of a desperate seller, so you should head over and check them out.
After reading her article, I thought of another 6 signs I think indicate the seller is in full-on desperation-mode. If you see these signs, make sure you use them as part of your negotiation with the seller.
1. Messiness
I'm always amazed when I see a home listed online with messy interior photos. It says to me that neither the owner nor agent could bother to clean up before taking the pics. That says to me that the property has gotta go - so fast that nobody can spare the time it takes to pick things up.
The downside of messiness in listing photos is that if the owner cannot bother to clean up for an attempt to sell, what else has gone neglected. All homes need some level of maintenance over time. A messy home might allow you some room for negotiation, but you should always include a home inspection as a condition of the sale, because without one, you can't know for sure what other areas of the home need attention.
If you do spot a listing with messiness showing in the listing photos, you should definitely play hardball when it comes to negotiations. Listing agents are paid big bucks to sell homes, and an agent unwilling to roll up their sleeves to make the home look presentable probably realizes they are going to have to take a hit to their commission check. You might find the agent is more receptive to a low-ball offer than you expect.
2. Street Widening
If you have the ability to research the city's 25 year plan, you may be able to identify if the home's street is scheduled for widening.
Widening a street helps commuters travel more easily and makes sense on a larger scale for the whole city. Idling cars stuck in traffic spew out emissions that can be reduced or eliminated with a wider street. The other side effect benefit its that municipalities can bundle in other projects - like plumbing and sewage upgrades - to make their systems more efficient and cost-effective over time.
However, a wider street means the home will have less property. In some cases, the encroachment of the wider street on the property means the home itself is nearly on the road. More traffic means more noise. And properties with mature trees in the front yard will have them removed - like it or not - which may negatively impact future property value.
3. Unfinished Basement
If the property you are viewing has an unfinished basement, the existing owner may be trying to avoid an expensive project.
Finished basements can have a very positive impact on property values. They can provide additional living space or act as a recreational area (a.k.a.man cave). If you work from home, a finished basement can be the ideal place for a home office.
If you see an unfinished basement, you can use it as a negotiating point citing how important a finished basement is to your requirements. Both the owner and listing agent will be fully aware of the costs associated with finishing a basement, and may be receptive to a reduced offer as a means of compensation.
4. Unconventional Fuel Type
Most homes are built with municipal natural gas lines and virtually all have electricity (if you are looking at a home that lacks electricity, maybe that should be part of your negotiation as well). If the home is in a colder climate, the source of heating is an important consideration.
Heating fuel type is one of the key data points used in calculating home insurance premiums. With more and more data emerging of the risks associated with what are now unconventional heating sources, such as heating oil, wood burning stoves and propane, the homeowner may be aware of the need for an upgrade.
Even if you prefer the heating source of the listed home, you should be aware that not only will the result be higher insurance premiums, they will likely continue to increase. Should you ever have a fire due to the heating source, the premiums will go up even more. Because the homeowner will be aware of this fact, you can call out the need to upgrade the heating source as part of your negotiation.
5. Deciduous Treed Landscape
Trees are often very beautiful and can add to a home's property value . Deciduous trees stand out in particular due to their tendency to change colors as the seasons move from summer to autumn. In some cases, such as with maple and fruit trees, the benefits can extend to the food they produce.
However, as deciduous trees mature and grow, their annual shedding of leaves can be a pain. Homeowners with a large lot and multiple deciduous trees face the annual chore of raking. As homeowners age, this task is not only cumbersome, but strenuous enough that it may have negative health effects.
If you spot an aging seller on a large lot with many deciduous trees, you can use that fact in your negotiation. You may be young enough that the chore isn't all that bad. But you may find that the seller is willing to accept a lower offer to walk away from raking.
6. Major Employer Just Left Town
When a major employer either packs up shop and skips town or reduces its local workforce, you will find properties for sale by desperate sellers.
Arguably, you should avoid trying to take advantage of someone in this situation. After all, they're facing a tough time having lost their job. Where's the heart in getting a lower price on a home they need to unload?
But let's face it: a home is probably the most expensive purchase you'll make in your life. Wouldn't it be nice if you could ignore a huge negotiating point to help them out? Sure. But you never know if that won't be you someday, and having been a nice guy will be a problem if you are faced with a house worth less than you paid for it.
Even in a situation where the seller is desperate, they know the deal: a lower offer is not the worst thing in the world if it means the transaction completes sooner.
Summary
So there you have it: 6 more ways to spot a desperate home seller, building on the original 6 ideas put forward by Ann Brenoff. And just like Brenoff's article, price was not included here as one of the 6. If you spot any of these signs, don't miss the opportunity to use them in your negotiation. Each will have an impact on you down the road, so either you will pay for it, or the current owner. Owners know these details - they've lived them, so to speak - so you not only will they be unlikely to storm off in a huff once they hear your offer, you might find them very receptive to it. By explaining your rationale, the owner will know you've done your homework, and be more likely to accept.
Do you have any more signs to spot a desperate home seller? Have you recently purchased a home only to later discover something from this list?