I know of a house in Richmond that’s listed for 50K less than the owner paid 2 years ago. In his case, he was transferred to the US and NEEDS to sell. He’s got 2 mortgages now.

Like a lot of people here have already said – there’s lots of reasons. You just have to find the place that you like with the best opportunity.

I’m not sure I follow you entirely, but again, you clearly understand the basics. Buyers often think they bring everything they need to the table simply by being willing to buy something for themselves. A smarter buyer will understand that giving more (to the seller and to the agent) can result in receiving more.

Because buyers determine the sale price of a property. If you want to sell, you have to take the best offer from among the prospective buyers. They only care about how much they’re willing to pay, not how much you paid for it.

Example:
I sold a place (I was the listing agent) where the seller told me how much she “needed” as she could afford a particular amount of loss. After we got an accepted offer that was quite fantastic she told me that she was prepared to go $85k lower if she had to. She would have incurred $100k loss at that level but that is how low she thought she’d have to go. If she still had that property today it’d be down at least the $85k… I’m happy for her that we got it sold! But the point is… the buyer could have got a much better deal.

That’s somthing I would never do nor recommend. Its a terrible move in my opinion. I can’t explain why anyone would do it, and if I was presented with it I’d probably consider making the buyer pay more (sit the buyer down, with the buyer’s agent, across the table from me and the seller and start having some fun).

“So begs the question where do I get the info…”

See, you do understand. That is the question. Uncovering motivation isn’t easy, but its very valuable. Its personal info that belongs to the seller (or the buyer); both parties have to allow their agents to disclose it, and should be careful about what they disclose and what they keep hidden. That’s why I’ve started with the agency brochure and the agency relationship. It starts (but certainly doesn’t end) there.

Let me see if this makes sense to you. When I say that you’re not seeing the forest for the trees I mean that you sort of understand but aren’t connecting all the parts in the right order. As a buyer you bring the sellers benefits – you’re serious, you’ll complete, you have hard earned cash, etc. But, with a lowball your price is not attractive (at least at first glance).

Think about when you go married. Did you propose to your wife with a fax saying “I offer to marry you, the benefits are obvious, if you’re serious you’ll accept this offer and move on, consider the ring as a deposit” or did you think “Maybe a nice box with a ribbon would help”?

What I’m suggesting is that you make your offer a win for the seller and sell that to him on the basis of the positives, not the negatives. I think you can see the merit there. Jeff says, for example “Take $200 because I’m afraid of what might happen”. I say, instead, “Take $200 because I really want your place, I can only afford $200, but with the $200 you can start enjoying your golden years on the beach in Mexico. The ecomonic downturn in the US has kicked the crap out of the Mexican beachside real estate market and there are lots of Americans being forced to liquidate. My $200 in your hands turns into much more where you’re going, so its really a benefit to you, plus you know that your house is left in good hands”.

That approach assumes that I’ve learned something about the guy’s motivation, and that in this case its retirment in Mexico. What the particular motivation is isn’t important. What’s important is that I sell him on his motivation, not on mine. Let’s face it – he doesn’t care too much about me but he cares a lot about himself. Approaching it that way, doing the extra work and understanding what the other guy wants doesn’t ensure we get the deal, but it increase the chances of it. In a market with record low volumes it seems obvious to me that someone has to do something extra to make the deal work. If we don’t want to use extra money to get us over the hump we need to use something else.