Why Would Someone Sell Their House At A Discount?
The simple reality is that 90% of homeowners will not sell their house cheap so before you have to suffer through the frustration of rejection after rejection I’d like to show you what a motivated seller looks like.
First, can I ask you a question?
“Have you ever sold anything on eBay? If so have you ever sold it for less than you wanted?”
If you answered Yes to both of these questions then you are well on the way to understanding why someone would sell their house for less than it’s worth.
So let’s get back to eBay. If you’re anything like me then the amount you want for it, something you no longer use, is calculated like this:
1. How much did I pay for it?
2. Divide that number in two
3. That’s the amount that I want
Sounds simple enough, right?
This is obviously not the best strategy. My 8 year old Mac is obviously not going to sell for half of what I paid for it. So I have two choices:
1. Sell it for less
2. Keep it because at that price it’s not worth selling.
We’ve all done that right, which is why our cupboards are crammed full of things we don’t use any more and that we will never use again.
So what does this mean for selling a house?
It means that most people have no idea what their house is worth. They just know what they want for it.
This is the critical part…
The reason why they want to move will determine if they will accept a lower price.
If we return to the eBay example. We have all sold things for less than what we wanted because we needed the money.
Now on eBay we might have done several auctions before realizing that we need to lower the price.
There’s nothing more frustrating than running a weeks auction, getting lots of watchers and no bids.
This is the market telling you that what you are selling is not worth what you are asking. If you’re anything like me then this process needs to be repeated several times before I finally accept this.
This is exactly the same with homeowners.
They may have tried to sell their house for several months. You won’t know unless you ask them.
They may have a reason for moving that is so powerful or painful that they will accept the first offer that is more than what they need to move.
Again you won’t know unless you ask them.
So if you make polite conversation when you are looking at their house and they tell you that they want to move to a bigger house then you’ll instantly know that the chances are you won’t be able to do a deal.
The only exception is if they have found their ideal or forever house, and they are in a chain. In this instance moving quickly (to secure the deal) could be more important than the asking price.
How will you know this? You will help them calculate what they need to move.
How To Calculate What They Need To Move
You need to know the answers to the following questions:
1. What is remaining on their mortgage?
2. What deposit do they need to buy or rent their new house?
3. What debts do they want to pay off from the sale of their house?
4. What are their moving costs?
The total of these costs is what they need to move.
Here’s what it looks like with numbers:
1. Mortgage = £50,000
2. Deposit = £20,000
3. Debt = £0
4. Moving Costs = £500
What they need to move = £70,500
If their house is worth £130,000 then there’s a large negotiation margin.
What Are Some Other Reasons Why Someone Would Want To Move Quickly?
They may be getting divorced and are selling the house as part of the settlement. In this situation both parties are likely to want to move on with their lives so selling the house quickly could be more important than the asking price.
Especially if the house needs a little (or possibly a lot) of love. They are not going to want to do the work themselves and deciding who is going to pay for the refurb could be the cause of another set of arguments. So selling it right now, when someone is giving them an offer could be a real lifeline.
Another reason is, if someone has lost their job. 80% of households in the UK have less than £5,000 in savings so if you lose your job it’s not going to take long before your finances are on life support.
At this point selling your house fast becomes a necessity rather than a luxury. It’s sell it for what you can, rather than being reposed by the bank.
Finally, if someone is moving because of their job then they need to move quickly because they are either suffering through an exceptionally long commute. Or they are paying both mortgage and rent, something no one can afford to do for very long. Possibly, they have found something that they want to buy and it’s dependent on them selling their current house.
Imagine being in their shoes. You haven’t just found the house of your dreams. You’ve got both the house and job of your dreams and to realize both of them you just need to sell your current house. If you are able to get what you need to move (but less than what you hoped for) then aren’t you going to say yes?
Of course you are. No one wants to lose a new house and a new job.
So how do you uncover all of this information from the seller?
You simply ask them Why they want to move? And then listen carefully to what they have to say.
If there is no urgency on their part then no matter what you say to them they are not going to sell their house for less than what they want for it. So don’t waste your time by trying to persuade them.
If you find that they want to move quickly then once you help them to calculate what they need to move then you’ll know if you can agree a deal.
Remember you are helping people get what they need better than any of their alternatives. So if you want to buy their house for less than what they need to move then you should not offer to buy it.
If they need the same or less than what you want to pay then you owe it to them and yourself to find a win-win solution.
Now that you can see who needs to sell their house quickly I hope that you can use these secrets to find and help motivated sellers to transform the quality of your life.
To your success