A motivated seller is a person who is looking to sell their home quickly, and usually is less concerned with the sale price.A motivated seller is more likely to work with you on not only the sales price but possible seller concessions to help pay for your closing costs. A motivated seller may also be more apt to assist with creative financing such as carrying a seller second mortgage in order to help with the sale of his home. A seller second mortgage is when the seller offers to hold a second mortgage where you make payments to him/her in addition to your first mortgage with a lender, in order to assist you in qualifying for a home loan.
A motivated seller may be willing to contribute toward your closing costs up to the maximum the lender allows. Many lenders allow up to 6% total seller contribution which goes towards your closing costs. This can help you pay your loan officers fees as well as other fees associated with closing a loan. This option is often used in cases where you are obtaining 100% financing.
Sellers become motivated for various reasons. A seller may need to sell fast because they lost their job and do not have the cash reserves to pay their mortgage for more than one or two months. This can place pressures on the home buyer to sell and sell fast, at a price under market if need be.
A home buyer can motivate a seller to accept an offer by including a mortgage pre-approval with the offer. One of the worst situation a seller could face is to be informed months after signing the purchase contract that the buyer is unable to secure financing, thereby wasting the seller's time and disrupting plans. Sellers are likely to be more motivated to work with buyers armed with lender pre-approval certificates.
Sellers may be motivated to sell there current home before trying to purchase a new home and eliminate the need for bridge financing.
Another reason a seller may be motivated is that they have decided to buy another home and they need the money from the equity in their current home to buy the new home.
Be sure to consider why the seller is motivated: the property may have defects or may be over priced. If you are in doubt be sure to check the appraisal carefully and consider ordering a home inspection.
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