Wasilla Real Estate News, Valley Market Real Estate

I am often asked by a buyer about seller motivation. What the buyer wants to know is how much less than the asking price might the seller be willing to take. But the reality is sometimes quite different than just being willing to take a lower price on the home.

Motivation is governed by many different things, here are some of them:

1. Income drop. The seller may have lost a job or received a reduction in income for some reason. This is beginning to make it difficult to pay the bills. This seller may be highly motivated to sell, but the limiting factor on his motivation is the outstanding amount of his mortgage. If the offer is for less than is owed he cannot sell unless he either pays the difference in cash or sells with a short sale.

2. Short Sales. This is often caused by the same reason as number one above where the seller can no longer pay his mortgage. But that is combined with the situation that the house is worth less than is owed. Often a seller will be willing to take any reasonable offer that he thinks the lender might agree with…the seller is not making anything in the sale anyway. If you make an offer on a short sale be ready for the long haul. Sometimes these take six months to close.

3. Transfer. If the seller is moving out of town or out of state they are often very motivated. They may have a set time when they are leaving and the option of leaving the house vacant is not attractive. This seller may take a lower offer. The exception is when the seller has a buy back agreement from his company, in which case all bets are off, he may not be motivated at all even though he is moving because his company will buy his house from him if he can’t sell it. However, after the relocation company buys the house…they ARE going to sell it. They will look at all reasonable offers. They do not want to own that house in six months.

4. Divorce. In this case one of the two sellers may be highly motivated and one may not be very motivated at all. It depends on who is paying the mortgage and who is staying in the house. Often a house like this does not sell until a judge orders the sale in order to divide the assets. But sometimes both parties are very motivated to get it done and will take a lower offer as long as it fulfills the goals of both parties.

5. Foreclosures. Obviously, the owner of a foreclosed property is motivated. This house is going to sell, it’s not going to sit on the market forever. However, usually the asset manager has a system. They will not normally accept an offer far below their asking price…maybe 10% is the best you can hope for. Instead, they will systematically lower the price of the house over time until it reaches a point that someone buys it. There are always exceptions and occasionally someone picks up a foreclosure for 25% below the asking price.

6. Estate Sale. Sometimes the house is being sold because of a death. The heirs need to sell the property in order to settle the estate. These are sometimes very motivated sellers, and sometimes they are very unmotivated sellers. Every estate sale is different and it really depends on the amount of heirs and how independent from the heirs is the person settling the estate. I once represented a property that had more than 30 heirs and one executor. The executor was very cautious and very nervous because he felt that all 30 of the heirs were looking over his shoulder. He was not going to be able to please them all. It took a long time to sell that property.

Here are some important links:

Senator Murkowski was speaking on the economy. She did not paint a pretty picture. She basically said that if there are not immediate and substantial cuts and revenue increases the US Economy will be in BIG TROUBLE. That’s the short version.

She explained the difference between mandatory spending and discretionary spending. Mandatory spending is everything spent on medicare, medicaid, social security, and the interest on our debt. More than 1/2 the budget is spent on these items. At the current level of spending, mandatory spending will eat up all the available funds by 2025. We won’t reach 2025 of course because at the current level of spending the whole thing will implode before then.

Discretionary spending is everything else.

Basically the total budget is somewhere around $3.8 Trillion dollars while the total revenue is only about $2.2 Trillion. In other words, we are still spending ourself into a hole. That hole is somewhere in the neighborhood of $15 Trillion right now. The only encouraging thing is that Murkowski at least can see the light at the end of the tunnel…AND IT’S A TRAIN. There are many people still in congress who don’t recognise that.

Murkowski thinks we need to cut the budget over 10 years to the tune of at least $3 Trillion. That’s all well and good, but we are currently going into the hole at a rate of more than one trillion dollars a year. All that will do is delay the train wreck…but it’s still coming. I think she hopes that the remaining amount will be made up with increased revenue to the federal government…as in taxes.

The positive thing is that she said she is in favor of a balanced budget amendment to the constitution which would be helpful in the long run. She also understands the need to get government out of business. However, it isn’t going to happen short of a small revolution.

She emphasized that next election is very important to change the direction of the government, but I’m not sure she agrees on the amount we need to cut government regulations. In order to turn this large ship we call the US economy as quickly as possible you need to turn the wheel all the way to the right…you can make the minor corrections later. I’m afraid she doesn’t see that yet.

I appreciated her candor, she did not sugar coat the situation. I also understand that she is only one person in congress and cannot fix things on her own. I think she was totally off base in her knee-jerk reactions to Herman Cain’s and Rick Perry’s proposals of tax reform even though she did support tax reform. She had the typical liberal response saying how she is worried about their tax policies hurting the poor and rewarding the rich.

Basically, we have to get over worrying about how much the rich have in this country and free things up so that all of us can make a living. So what if the rich get more of the pie, as long as there is enough freedom left to let us all have a slice at it.

Looking for some room? Here is a 2005 home on more than 4 acres just outside of Palmer.

Courtney Brook Smith is working with ITS Alaska which is a local web development firm that helped Alaska Association of Realtors with their page yournewalaskahome.org. I have used them myself and can attest to their professionalism.