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Tuesday, October 19, 2010

How to Identify a "Motivated Seller"

Keys: Price -- and Price Reductions

How do you identify a motivated seller?

No, it's not because they scream on MLS that they're "motivated," "priced to sell," "won't last," etc.

Rather, the home is priced aggressively -- and, if it doesn't sell, is reduced at regular intervals thereafter.

A good example of a home meeting the foregoing description is 6xx Drillane in Hopkins (pictured above).

Pricing Pain & "Fence Sitters"

Since debuting on the market in July at $259,900, here is its price history:

Aug. 24: reduced to $249,900
Aug. 27: reduced to $239,900
Sept. 1: reduced to $234,900
Sept. 15: reduced to $224,900
Oct. 1: reduced to $214,900
Oct. 15: reduced to $209,900

Detect a pattern??

And yes, it's certainly possible that prospective Buyers, watching the relentless price cutting, are holding back, waiting for still more.

But eventually the value will be so irresistible that someone will bite, rather than risk losing out on a great deal to another Buyer not as patient.

In fact, as I've previously blogged, one not uncommon scenario is that, once one "fence sitter" monitoring the property jumps in with an offer, others follow.

The result is multiple offers that produce a price "bounce."


So, why hasn't it sold yet?

The home needs substantial updating, which can be a hurdle for Buyers at this price point.

Plus, it's a California rambler, which means there's no basement.

Minnesotans -- especially Minnesotans with kids -- prefer basements for their storage and "rec rooms" (perhaps more accurately named "wreck room").

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