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St. Louis Real Estate Search

 

Should You Investigate Your Home Buyer Or Seller Online?

Today, with the help of the internet, you can get information on just about anyone and usually rather easily.  From information websites, to blogs, to classified ad sites and social media, there is a plethora of information about people available with much of it (thanks to social media) coming right from the source…the people themselves.  With all this information so readily available,  it has become common for home buyers, sellers and/or their real estate agents to use the internet to try to get a leg up on the other side in a real estate transaction.  However, this has led to some issues and concerns as to whether this should be done or not.

How a home buyer can benefit from internet snooping…

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From the buyer’s perspective, there is much information that can be gathered that can be of benefit to them when selecting a home to make an offer on as well as in negotiating a deal.  This would include:

  • Information on seller’s ownership history.  How long they have owned it, what they paid for it when they bought it as well as what they borrowed on it (with some indication of what they owe).  This should be done by a buyer’s agent and is all useful information to give the buyer an idea of where the seller is on the deal..if they have lots of equity (and perhaps room for negotiation) or almost no equity (indicating it will be hard to get a “deal” plus there is a chance the seller may not be able to afford to do repairs to satisfy a building inspection, etc).
  • Whether the owner has been recently divorced, is a defendant in pending lawsuits, has judgements against them, recently filed bankruptcy, etc…This is all public information and can all give some insight into the motivation of the seller as well as indication whether there is financial hardship.  This could help a buyer locate a property that perhaps can be bought for less than market value perhaps or could be a flag that the seller may have difficulty completing the transaction.
  • If the seller has already bought another home.  It’s not uncommon to see a seller reporting on their house transaction on social media sites including sharing pictures of the home they are looking at, the house they must bought etc.  This can help a buyer find out that the seller has already purchased a home, or has fallen in love with one, either of which would indicate to a buyer the seller is a motivated seller that most likely wants to make a deal.
  • What the competition is.  Seller’s also often report their listing activity on social media as well with things such as how many showings they had that weekend, or how they have multiple people interested in their home, have been presented with two offers today etc.  These are tidbits of information that can help a buyer know that they have (or don’t have) competition or create a sense of urgency on the part of the buyer (or not).
  • Through LinkedIn a buyer may learn that a seller has a new job out of town which, if the family is still living in the home, would be another indicator of the seller’s motivation and seriousness about selling.  One of them may be living in temporary quarters in the new city and is anxious for the whole family to get moved after the home sells.

There are many more things that can be learned to the benefit of the buyer, but this gives you an idea.  Personally, I think all of these things are good to do and I teach buyers agents to do this type of work on behalf of their clients.  Even those some of the items sound like the agent or buyer may be looking upon the seller as prey (like when there is indication of financial issues) but I don’t think that is the case.  Granted, it’s an indicator their may be a “deal” to be had, but a lot of what is learned by going “Sherlock” are things that indicate the seller’s motivation and seriousness about selling.  Since a buyer is likely to spend $1,000 – $1,500 at the beginning of a transaction for building inspections and appraisal, it’s good to know that the seller is committed to selling and therefore more likely to negotiate reasonably on the building inspection and move the deal toward closing.

How a home seller can benefit from internet snooping…

Today, it’s not uncommon for a seller to receive multiple offers on their home.  When reviewing those offers, there is much more to take into account than just the price.  Seller’s should be considering things such as financing terms, time frames for inspections, closing date, quality of a pre-approval letter or proof of funds, etc.  The last thing you want to do as a seller is be feeling great about the 4 or 5 offers you received, pick one, then have the one you picked die 3 or 4 weeks later.  When a seller loses a deal and comes back on the market again, flags go up in the eyes of buyers agents and buyers.  The immediate assumption is there is something wrong with the home.  Therefore, from the seller’s perspective it is very important to pick the best and most solid buyer.   This is where the seller can benefit from information gathered on the buyer from the internet including:

  • Whether the buyer has been recently divorced, is a defendant in pending lawsuits, has judgements against them, recently filed bankruptcy, etc…Any of these would cause some concern about the buyers ability to obtain financing and get the deal closed.  Having said that, while a pending divorce should raise some concerns for the listing agent to explore with regard to the buyer’s ability to perform, it could be a sign this is a great buyer too.  It’s someone that is most likely motivated to get a house bought and get moved as they may be living in temporary housing, or, worse yet, still living with the soon to be ex-spouse.
  • If the buyer has already sold their current home.   Like sellers, buyers love talking about their home buying experiences online in social media too!  Information such as how they sold their current home, or just closed on the sale of it, is often posted online. This is great to know.  If the buyer interested in your home has already sold their other home and perhaps is living in temporary housing, this is going to show you they are serious and very motivated!
  • Make sure the buyer is real.  There buyers out there that think they can buy, or know they can’t but like to fake it for whatever reason that can be costly to a seller in terms of wasted time and tying up their home with someone that isn’t capable of performing on the deal.  A little time researching the buyer online will often reveal things that will help expose this type of buyer before the seller accepts an offer from them.
  • If there is other competition.  As I mentioned above, buyer’s love sharing their home buyer progress on social media sites sometimes even sharing how they have narrowed their choices down to 2 homes, or have an offer submitted on their first choice, etc.  This is information that can be very helpful for a seller to know how badly the buyer may want their home which is very helpful in negotations.
  • Seller’s can also use LinkedIn to learn a buyer’s motivation and timing.  If they just took a new job in town and are moving from of town it’s a big motivator and something good to know.

My thoughts on seller’s using this information is the same as what I said about buyer’s using seller info above.  There is one issue sellers should be very cautious of that buyers don’t have to worry about, Federal Fair Housing Laws.

How Do Fair Housing Laws come into play here?

Everything I’m talking about here in terms of research on a buyer or seller is for the sole purpose of a buyer or seller making the best deal, avoid getting scammed, avoid getting into a transaction with someone that may not have the financial ability, or time, to complete the transaction, etc.   However, in doing research the seller, or listing agent, is going most likely see photos of the buyers as well as other information on the buyer that could identify anything from race, gender, sexual orientation, religion, familial status, etc…all things that are protected under Federal Fair Housing Laws.  Therefore, sellers and their agents, need to make sure this is not the information being researched or considered in the decision on which buyer’s deal to take or not take.

 

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