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Key points
- ‘Motivated vendors’ are property sellers who need to get a deal done quickly.
- They might have already bought elsewhere, or need to sell for personal, health or financial reasons.
- Buyers may hope for a wave of distressed listings this year as interest rates rise, but it may not eventuate.
Property listings
They’re the most magical words you can spy on any real estate listing – “motivated vendor” – and they’re being sprinkled on the descriptions of properties for sale across Australia.
But what exactly do those words mean? A real cut-price bargain is on offer? The owner has just fallen off the fixed mortgage rate cliff and can’t afford the repayments anymore? There’s been a death in the family and the relatives want to claim their inheritance?
This Sylvania Waters home has a motivated vendor.Credit: DJW Property
It can be all the above, or none of them.
Some motivated sellers have just become caught up in a tide of downsizing – and dived in so enthusiastically, they bought before they sold.
Another reason why vendors may be motivated is the state of the market. With so much uncertainty about prices, many homeowners are sitting on the fence about whether to sell and want to test the market to see what price they can get.
“We’re seeing a lot of buyers getting burnt with them as they’ll have the building and pest reports done, they’ll make an offer, the vendor will accept it, and then will withdraw, which they can when it’s off-market, and put it back up for a higher price,” said Nick Papas of Agents and Co Property Group.
“So now ‘motivated seller’ is being used when a vendor is really committed to selling.”
There are a range of other reasons that lead to such a classification.
Papas has a ‘motivated seller’ at 189 Boyce Road, Maroubra, Sydney, where a two-bedroom house is being auctioned with a price guide of $1.65 million, with the owner downsizing after 36 years there because of health reasons.
There can be a range of other reasons, said agent Alex Flamm of agency Hodges Caulfield. “Divorce is a big motivator but unfortunately that is often very difficult for the buyer too,” said Flamm. “The husband and wife may find it hard to agree on a price, or an offer.”
Others might be motivated as they need a bigger home with another child on the way, says Rich Harvey of buyers’ agents Propertybuyer.com.au. Or they’re moving jobs, there’s a deceased estate or there’s a separation, divorce or family break-up.
Many buyers are hoping a flood of stress-motivated sales could come up, as mortgage-holders on fixed rates of about 2 per cent are about to go onto variable ones of closer to 5.5 per cent.
Some experts say, however, they haven’t seen much indication of this on the horizon. “I’d say it’s a fiscal myth rather than a cliff,” said Harvey.
“It’s definitely going to hurt but I don’t think we’ll see a flow-on effect in motivated sales as much as some would have us believe.
“People are getting ready to cope with it, and they already have equity in their homes, and there’s a massive number now refinancing for better deals. We’re also now close to the end of interest rate rises and confidence is rising as a result.”
In Melbourne’s St Kilda, the owners of a four-bedroom house at 44 Alma Road, listed with a price guide of low to mid $3 million and a motivated intent, then changed their minds and put it up for lease.
“The owners have bought another property that they’re now living in, they’ve downsized,” said Flamm.
“People don’t have endless amounts of money and they don’t want a property sitting empty.”
The owner of 474 Ford Road, Burbank in Brisbane is another motivated seller because she wants to downsize from her current four-bedroom home on 2.4 ha of land, and has actually built another home she wants to move into.
“She is definitely motivated,” said Ray White Rochedale agent Zishaan Omar of the property that’s now up for auction but had previously been offered for sale by another agent for offers over $1.8 million. “It’s nothing to do with financial stress, but she wants a lifestyle change.
“It’s a very beautiful property she’s selling, that’s like a tranquil oasis, and wants to downsize from her old one.”
Often agents prefer not to reveal the reasons their vendors are motivated.
Brad Scott of Smart Real Estate, who’s selling 3028 The Boulevarde in Benowa on the Gold Coast for offers over $4.4 million, said the reason was “a bit of a mix of circumstances. But I can’t say too much because of privacy reasons.”
In Sydney, Dave Watkins of DJW Property is much less coy. He’s listed the four-bedroom waterfront 18 Goulburn Peninsula, Sylvania Waters with the line, ‘Motivated Vendor Says Sell This Weekend!’
“It’s nothing to do with financial reasons; it’s that the owner wants to sell as he’s relocating to Melbourne,” Watkins said. “Usually waterfront owners are well set financially, so they don’t have to sell for that reason.
“But as the market bounces back, we may well end up seeing more motivated sellers in the market, as they’ll be more confident they can get their asking price, and we’re seeing so many retirees, or people planning to retire, moving out of their homes to downsize somewhere else, or move up north.”
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