July 21st, 2011
In the article “Buyer’s Guide to Understanding Today’s Seller” Brendon Desimone explains that it’s important to understand the type of person from whom you’re purchasing a home. This way you’ll know what to expect, and how to react to make the negotiation as pleasant as possible.
In exploring the different kinds of sellers, Desimone breaks them up into three categories: Music Facers, Dream Chasers, and Long-Distance Racers.
The Music Facer: These sellers bought when the market was at its peak (around 2006) and they’re now selling due to life changing event, like a job transfer or a new baby.
They tend to be pretty realistic with the current housing market. They know they will probably take a financial hit, but they also know they need to sell their home to move on with their life.
At first they will try to get the highest price possible – but what seller doesn’t? Ultimately they will let the market determine what’s a reasonable offer, and they will accept just that.
Advice to buyer: be patient with the music facer. If you believe they are asking too much, make a reasonable counter offer. If they really need to sell the house, they will.
The Dream Chaser: These sellers also bought during the housing peak, and they are selling for whatever reason – whether it’s due to a life event, or just the desire for a different home or location.
The difference between the dream chaser and the music facer, though, is the dream chaser is in denial. They love their home, and they believe that someone else is willing to pay as much as they paid, if not more, regardless of the market.
Dream chasers typically aren’t in a rush, and they’ll allow their home to sit on the market for a year or more, just waiting for that high offer to come in. When that offer never comes, they’ll either accept the highest offer or make the decision not to sell. Either way, as Desimone says, they will have wasted a lot of peoples’ time and energy in the meantime.
Advice to buyer: Don’t waste your time. If you really love the home, make an offer, but move on and continue looking. Maybe the stars will align, and when the dream chaser finally faces reality they will return to your offer – but don’t let other opportunities pass in the meantime. A good agent should be able to spot a Dream Chaser, so rely on them for guidance.
The Long-Distance Racer: These are sellers who bought a longtime before the market downturn, and their home has enough equity for them to still make some money. In some cases they may no longer have a mortgage, so paying off a loan isn’t a concern.
Long-distance racers are typically realistic from the get-go, and price the property appropriately from the beginning. They don’t have the weight of debt pressing on their shoulders, allowing them some flexibility.
Advice to buyer: Make a serious offer right away if you find your dream home. A seller who prices his or her home appropriately is someone you want to do business with.
How can you tell what type of seller you’re dealing with? Desimone offers this advice:
You can get an idea by searching tax records and price history charts on Zillow. Or ask your real estate agent or the listing agent probing questions: Why is the owner selling? How long has it been on the market? What did they pay for the property and when? I’ve even seen buyers ask the listing agent if the seller is prepared to take a loss if they can’t get their asking price.