Shopping for Bargains

How can you tell how when there's room to negotiate? Market conditions alone aren't the answer, as anxious sellers have often taken those into account when pricing the property.

We've identified six major signals and eleven minor signals of seller motivation to look for when gauging how aggressively to negotiate price.

To get a significant discount, of say more than five percent from list price, we would expect to see a combination of at least two major signals or one major signal and two minor signals.

For example, just because a seller is going through a divorce doesn't mean he'll sell the home at a 10% discount, unless the home has also been on the market for a few months or is in a neighborhood where houses aren't selling.

These signals say nothing about whether a property is fairly priced, only about whether the seller is ready to consider a lower offer now – or after a few more months on the market.

1. The seller must move
   The seller's agent occasionally posts a message in the MLS that the seller is motivated. Bingo!
   
   
2. The home's previous sale price was much lower, and the seller has a small mortgage
   The seller may accept a discount if he can still come out ahead. On the other hand, few sellers will accept less than what they owe on the mortgage, unless they're already in default.
   
   
3. The home has been on the market 90 days without a price change
   Redfin displays days on market for each listing.
   
   
4. The neighborhood has many homes languishing on the market
   Use the listing statistics below Redfin's map to see if the neighborhood's listings average 90+ days on market.
   
   
5. The property is vacant
   The seller's probably paying two mortgages.
   
   
6. The owners are getting a divorce
   Look in the property tax records for recent title transfers.

1. The home is staged
   Staging can costs hundreds every week. It increases the listing's appeal but also increases the seller's motivation to sell.
   
   
2. The property has been re-listed
   When a property is relisted, Redfin.com resets days on market. But your agent can query the MLS directly for the listing's entire history.
   
   
3. The seller is offering special incentives to buyer's agents
   Tell a seller to keep the incentives in lieu of a lower price.
   
   
4. The listing is a short sale
   To avert foreclosure, the seller will take almost any price, but the trick is getting bank approval prior to foreclosure.
   
   
5. A bank is selling a foreclosed property
   Banks don't like owning homes, and are often eager to sell.
   
   
6. The property is an estate sale
   Relatives may not want to hold out for top dollar.
   
   
7. There are many foreclosures in the area
   Even if the listing isn't a foreclosure; it competes for buyers with nearby foreclosures.
   
   
8. The property is the most expensive in the neighborhood
   An expensive home built on inexpensive land can easily be overpriced. Sellers value the wine cellar more than you will.
   
   
9. The property is unique
   Sellers become emotionally attached to unique properties, which are difficult to price, and difficult to sell. If the home is one of many in the same development, the seller's agent is usually more confident about the asking price. If the home is part of a new development, the builder will hesitate to set a low precedent for future sales.
   
   
10. The property is the first or last home in a development
    New-home prices are difficult to negotiate, but not extras and closing costs. Builders are anxious to sell the first home for marketing buzz and the last so they can move on.
    
    
11. Contingent sale fails, or stalls for more than 45 days
    After a competing buyer has rejected or delayed a deal because of financing or inspection contingencies, the seller may eagerly accept cash on the barrel, even at a lower price. Use Redfin listing alerts to track status changes and watch for homes that go back on sale.