MLS-2, a real estate information and listings search service, says their most recent study of Bay Area MLS listings suggests that using the term "motivated seller" is more common, but is it effective?
According to the study's findings from REInfolink, which serves five counties in the Northern California Bay Area:
- "Motivated Seller" Listings peaked in November '06 at over 8.24 percent of the total inventory of listings. The previous record was December '05 with 7 percent. (December '04 was less than 2.5 percent).
- For the spring of 2007, the number of "Motivated Seller" listings has rapidly retreated to same month 2006 levels, but is still over double 2005 levels.
- A cyclical cycle is emerging, with data being smoother for the most recent twelve months, suggesting using "Motivated" may become a common tactic for marketing some listings.
MLS-2 CEO Patrick Boyle said in a release that he believes the listings marketing world has changed. "The genie is out of the bottle, and 'Motivated Seller' may now become an accepted marketing strategy," says Boyle, with the baseline level of these listings appearing to level out at 4-5 percent, double the historical level recorded by the company.
The reason the company tracks terms like "motivated seller" is that home buyers choose such keywords when searching for listings in databases. They're also searching terms such as "short sale," and "trust/trustee sales," which suggests two things -- buyer sophistication and bargain-hunting.
That's something for listing agents to think about.
Investor, trainer, and attorney Bob Bronchik writes in an Internet article that "a motivated seller is one with a very good and pressing reason to sell below market."
He suggests a few reasons why a seller might sell below market are:
- Divorce
- Lack of concern
- Inexperience with real estate repairs
- Time constraints
- Death of a loved one
- Job transfer
- Landlording headaches
- Impending foreclosure & other financial problems
That's why it's questionable whether it's to the seller's benefit to advertise motivation over the benefits and/or features of the property.
Bronchik goes on to share information on how to find properties where sellers might be motivated to sell:
- look for ugly homes
- look for signs of vacancy: "overgrown grass, no window shades, boarded windows, newspapers, garbage, mail piled up, etc"
- look for code violations from the city or county; ask the city for a list of properties with code violations
These tips should tell listing agents what to do to counter the impression that their listings might be fire sales.
- Vacant homes suggest pressure on the seller, stage the home with furniture to give the appearance of occupancy
- Make sure the listing has drive-up appeal: no trash, obscuring plants or trees, naked windows. Paint and repair where needed.
- Price aggressively to keep home from lingering on the market
With sites like MLS-2.com creating keyword searches for buyers based on bargain-hunting, and investors combing neighborhoods looking for bargains, it's clear that sellers would do better to stage and price their homes attractively than to signal distress.
