How to Negotiate With Motivated Sellers

How to Negotiate With Motivated Sellers
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Regardless of whether it's a buyer's market or a seller's market, individual circumstances can affect how motivated home sellers are. Getting a job in another city or state, having to sell the home of parents who have passed away or trying to beat the bank to avoid foreclosure are all reasons that might motivate a seller. Just because the homeowner has reason to sell quickly doesn't mean that you'll get the house for a pittance. You will have to negotiate with him to arrive at a fair price that will benefit you both.

Do some research. Find out what similar homes in and around the seller's neighborhood are selling for. You can even contact an appraiser to find out what comparable homes have been appraising for over the recent months.

Offer the seller a price that is on the lower end of the scale of home prices you found in your research. This shouldn't be more than 10 percent less than the asking price. For example, if the listing price of the home is $250,000 and the comparable houses you've researched have sold in the $220,000 to $240,000 range, your offer should be around $225,000. Although it isn't at the bottom of the scale, $225,000 is 10 percent less than the asking price.

Set a maximum amount to bid on the home. This will keep you from getting caught in a bidding war if there are other parties interested in the same home. It will also serve as a ceiling if the seller won't negotiate below a certain price. In those circumstances you'll know when it's time to move on.

Be open to the seller's counteroffer. Even a motivated seller may not accept the first offer you present, especially if it's significantly lower than the listed price. Consider paying more for the home, but ask the seller to make concessions like paying a portion of the closing costs, paying for the appraisal and/or home inspection and providing a home warranty to cover the repair or replacement of items if they fail, like the refrigerator, the stove or the water heater. Real estate agent Gilbert Salazar points out that not having to pay for items like these could allow you to get into the home with no out-of-pocket expenses -- aside from the down payment.


  • Include a clause in the purchase and sale agreement stipulating that the home must appraise for at least the sales price. That way you won't be locked into paying more for the house than it's worth -- unless you want to and have the resources to do so. It opens the door for renegotiation, too.