Two Words Realtors Hate


The Two Words Realtors Hate

In the world of retail property sales (also known locally as the Multiple Listing Service or MLS), Realtors can write in a field called “Remarks” on their listing sheets.  You won’t find this on public access sites like Zillow.  It remains a private field, and only active agents can access it via their local MLS.  It is a powerful field and a few short years ago, the two words listing agents hate:  “motivated seller”, could be found on nearly every listing on the MLS.

Back then, the housing market was swamped in underwater properties, market times lagged, and the key words bottomed out. “Motivated Seller” lost its mojo.  Homeowners stuck in underwater mortgages were in bad shape.  Investors thick in cash were heavy hitters, driving prices down and reaping the rewards.  They didn’t need to look far or wide or drive for dollars.  Indeed, distressed homeowners were often throwing keys at them before the ink dried on contracts, so desperate were they to escape a failing mortgage and a trip to bankruptcy court.

Go Away, Serious Buyers Only! 

But today, the housing market has shifted.   Placing a property on For Sale By Owner frequently causes a huge wave of low ball offers and Realtors knocking on your door, because you’ve opened the floodgates to the non-retail housing market.  You’ve just put yourself on the wrong radar.  Property investors and licensed Realtors understand the market place and they can sense desperation when an owner gambles on the non-retail end of selling property.  If a homeowner doesn’t trust the fair market value of their home to list it on the MLS, why should anyone else?

Listing a property on the MLS is like an indirect endorsement: the listing agent first has to believe in the property in order to justify listing it at “X” price point.  Then again, if you’re not found through the MLS, most retail buyers (who are usually pre-approved) won’t ever find you.  Realtors prefer to show homes to pre-approved buyers.  They don’t like to waste time on clients “just looking” or window shopping.  So, unless you are in serious distress as a home seller, why advertise you’re motivated?  It is enough to have an active property listing to show you’re ready to sell.  No homeowner enjoys low ball offers unless they are truly distressed.

Why Motivated Sellers get the Kiss of Death on the MLS

Over the past few years, the housing market has shifted back to the seller’s domain.  Deals for investors are tricky, lack built in equity and afford slimmer margins.  Old, reliable techniques such as door knocking, yellow legal pad letters and driving around neighborhoods are returning.  Keywords are hot again on the MLS such as “fixer upper” and “needs work”.   But “motivated seller” remains the kiss of death for the average MLS property listing.

Why? When the MLS listing has “motivated seller” in the Remarks section, it knocks the seller out of top negotiating spot in the sale.  The seller has revealed his cards and sits exposed on the open marketplace.  As soon as the listing agent published the words “motivated seller” on the MLS listing sheet, it is too late.   Consider too, that hundreds of agents run automated daily property searches under those key word terms.  The searches get emailed to buyers and the offers will roll in, but they won’t always be good offers.  Keep in mind that for regular, full price retail homeowners (who are motivated, but not desperate):

  • 5%-10% below list price is a reasonable offer
  • 10%-15% below list price is unlikely, but possible
  • 15%-20% and below list price is insulting. **

(**unless the situation is desperate, then a truly motivated seller will be relieved of the financial burden)

Is any offer better than no offer?

I am often asked is any offer better than no offer?  That depends.  Each seller is unique and what works for them may not work for the next person.  Advertising on behalf of a client that the seller is “motivated” opens the floodgates, just like a For Sale By Owner listing.  Keep in mind that fair price and property value are not tied together.  The seller takes what the buyer offers and that becomes the market value.

Key words like “motivated seller” still have a purpose in the MLS.  Distressed property sales are often coded now as “short sales” or “pre-foreclosure” to the same effect.  If you’re a property owner in serious distress, use the MLS to get the burden off your shoulders and move on.  If you’re not in distress, and are just testing the market, clue your Realtor in to your plans.  Then, put it in writing.  If you put it in writing that you don’t want to see any offers that are 10% or more off list price, you can save a lot of time and hassle.


Interested in navigating the housing market in the Fox Valley area?  Find out more about how it works and contact me today at 630-854-4360 for a no-obligation marketing consultation.




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