How to Identify Motivated Sellers for Real Estate Investing
One of the most important things that determine the success of real estate investing business is availability of good deals. Unless you can buy properties cheaply, you are unlikely to make profits with most real estate investing business models.
Most of my best deals come from motivated sellers. You will come across all types of sellers when you are buying houses. You must be able to identify the motivated sellers who drive your business.
Of course, more targeted marketing will give you more motivated sellers. Most of my targeted leads are people in legal trouble who own real estate. These usually turn out to be motivated sellers.
Classified ads, newspapers, bandit signs, and other kinds of general advertising methods attract all kinds of people looking to sell their houses.
So how can you identify people who are really motivated to sell their house? The easiest way to do this is to divide them into categories.
1) Unmotivated seller
This guy thinks his house is the best in the sub-division. They have spent their time and money to make it as flawless as possible.
They have put it in the market but they have not found a buyer. The just need to sell it at full market price.
They will not be willing to discuss details and numbers, such as their mortgage balance.
Of course, you will never make money from these type of deal, so you are better off forgetting it.
2) Luke-warm seller
This is the type of person who calls you and says he might be willing to let you buy his house, and asks you to explain how you work.
Even though he will listen keenly and ask questions, he is not comfortable discussing all details like mortgage balance.
He will ask you to make an offer and probably tell you how much he has been trying to sell for. He will insist you first go to see the house and see if you like it.
Even though he will show the interest to be flexible enough to negotiate, you are unlikely to get a good deal from him.
Of course, without information like the fair market value, repairs, mortgage balance and so on, a good real estate investor cannot make an offer.
You are likely to waste a lot of time driving to see such houses and not get a deal.
Usually I ask him to give me a call with all the numbers before I can make him an offer.
3) Motivated seller
This guy really needs to sell their house. Maybe they are behind on their mortgage payments or even facing foreclosure.
Probably they have tried to sell and see no other way out. He will be keen to provide all the information you need. Most of them just want to get out of the mortgage.
In my business, most motivated sellers submit their information through my real estate investor website, so by the time I call them, I already know whether I can make the deal happen or not.
If I pre-screen such a seller on the phone, the conversation is likely to take less than 5 minutes and they provide all the information I need.
This is the only type of seller I deal with in my business. This is the only type of seller where you are likely to get great deals that can make you a lot of money.
Simon Macharia - About Author:
Successful real estate investing requires that you pre-educate potential motivated sellers about how you do business to close more deals. Learn how an interactive real estate investing website can pre-educated motivated sellers for you, pre-screen them and pre-negotiate deals for you saving you time, money and effort allowing you to close more deals.
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