When looking to buy a lake home, buyers need to understand speculative sellers. Glenn Phillips, CEO of Lake Homes Realty, explains what speculative sellers are and why buyers should understand them.
- Two Types of Sellers: Understanding the differences between the two types of sellers affects how you negotiate pricing.
- Motivated: Motivated sellers usually have a sense of timing. This means life circumstances push them to sell their house on time. For instance, this could be a change in family size, a new job, or some other life event.
- Speculative: Speculative sellers appear more in discretionary property markets, such as lake homes. They aren’t motivated by their life circumstances. Instead, they test the market, aiming for a certain price.
- Speculative Sellers:
- Overprice: Speculative sellers usually price above market trends. Because of this, the home stays on the market for extended periods of time. For example, this could be from 2-3 weeks to several months.
- Lack Urgency: Oftentimes, speculative sellers set a listing price just to see what happens. This can make them unmotivated and slow to respond.
- May Lack Market Understanding: Sometimes, the seller doesn’t know they’re being speculative. They may price their house at what similar houses sold for in the past without looking at current trends.
- Emotionally Driven: Speculative sellers may not be all-in on selling their home. Additionally, they sometimes have attachments to aspects of the house that buyers don’t care about. The seller also attaches memories and emotions to the house the buyer doesn’t have.
- Frustrated by “Low” Offers: After the home sits on the market for some time, sellers become impatient. This leads to frustration from “low” offers. These offers may even be appropriately priced for the market, but the seller expects a high price.
Engaging with speculative sellers as a buyer requires understanding. Keeping these tips in mind helps move the process along. Being patient, as well as providing market data to support your offers, may even help them understand your thinking. Be sure to visit lakehomes.com, where you can find agents who will help you understand speculative sellers.