Which is the more motivated seller, high equity or low equity?

Question

RE agent new to REI. Looking for leads and (sorry- I'm new!) I am wondering which potential seller would be more motivated if they have high equity in the home or low equity?

Thank you!

Lee Ripma · Answer

@Lindsay Estes

Motivated sellers are pretty rare. If you find one they are not motivated by the equity in their home. They are often motivated by the 3 Ds-debt, divorce, death. There are other reasons too, they are getting older, they want to move somewhere else, they don’t like their tenants. Could be something else-over budget on a rehab project, kid getting married, etc.

There are people who want to sell and then there are people who are in distress and will take a cash offer below market value. The former is out there the later is rare. A lot more rare than the hype around motivated sellers would have you think.

Joe Villeneuve · Answer

Neither one. Why would the amount of equity be a motivating factor?

Account Closed · Answer

Hi Lindsay,

I bet you are trying to figure out which lead list is better - high or low equity. I think it depends on you end game - if you want to wholesale properties, choose high equity. If you are looking to do Sub—2 deals, choose low equity. Hope that helps! Good luck!

Kim

Jon Kelly · Answer

@Lindsay Estes If all else is equal, someone with more equity in their home is likely more motivated than someone with less equity. Typically, motivation to sell comes from other outside factors not related to equity in the home: (job, price, family size increase/decrease, retirement, neighborhood, schools, etc.)

Eliott Elias · Answer

Depends on the situation, as a buyer you want to target sellers with high equity. More meat on the bone

Lindsay Estes · Answer

Thank you for the replys! Maybe “motivated” was the wrong word. Maybe who would benefit more from selling. And honestly, I think I was thinking that equity would affect what you walked away from the deal with in your pocket, rather than just how much you still owe the bank.

Ken Nyczaj · Answer

@Lindsay Estes I always target high equity owners. If they don’t have equity then it’s been very hard to make a deal happen in my market, might be different elsewhere, but where prices are high and you still owe a lot, unlikely they’ll take the loss as the bank won’t allow it, unless it’s a short sale and that’s a whole different story. You could also assume, not always correctly, high equity means they’re older and have been in the house awhile, maybe it’s time they wanted to retire to that 55 older community...

Stephen Keighery · Answer

@Lindsay Estes equity isn't a factor in motivation. If someone is motivated and has high equity then it is probably easier to do a cash deal or owner finance. If they are motivated and low equity is more likely to be a subject to deal. The motivation will come from a different place to equity though.

Duane Alexander · Answer

@Joe Villeneuve I understand what you mean

Joe Villeneuve · Answer

Why would that make them more or less motivated? Equity has nothing to do with motivation.

Which is the more motivated seller, high equity or low equity?

Which is the more motivated seller, high equity or low equity?

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