Shortcut to Real Estate Investing Success: Tips from a Motivated Seller

To invest profitably we have to get great deals. Great deals mean buying real estate at very low prices or in excellent condition. Frankly, most sellers aren’t interested in the kind of offers we do and that’s okay because our offers are so low. Sellers who are truly motivated are the only people who will give us the price and/or terms we need to make good deals.

So who are these motivated sellers and where do I find them? How do I know if a seller is motivated? Look for some of the following signs as indications that the seller is ready to deal.

The why”

Find out the “why” of the seller. Why is the seller selling his property? Why does the seller need to sell right now? Is there a sense of urgency? Really try to understand your situation. Here are some of the “whys” that are often mentioned.

– Can no longer afford the property
– Behind on payments
– Loss of job or income
-I need money
– Significant repairs are needed and the seller cannot afford them
– The owner died and the family needs to sell the house (sale of assets)
– The owner needs to move
– The real estate agent was unable to sell the property.
– The investor cannot find a tenant for the property
– Last tenant left property under repair
– The investor is tired of owning
– The seller just wants to get rid of the property
– You have been trying to sell for a long time at a higher price and are ready to move on

The list goes on. We need to know the “why”. This is the greatest indicator of motivation. Most sellers are not going to be 100% direct at first. Ask the question three times. The more you ask, the more they will expose their true reason and position. Listen to your need. Is there despair in your voice?
 
The bad “whys”

Here are some “why’s” and other statements you don’t want to hear:

– The seller just wants to see how much he can get for the property
– The seller is firm on the price and is not flexible
– No particular reason to sell
– I won’t answer your questions.
– Will only sell if the price is right
– Stubborn and inflexible personality.

If you receive any of these prompts, you should hang up the phone immediately. That seller is a waste of time. You will ONLY get good deals when the seller is truly motivated.

the sad truth

Most of the offers you make will be rejected. It’s part of the business. Acknowledging that this is normal should make it easier to deal with.

Realistically, you’ll probably need to make 25 offers to get a ratified contract, if you deal directly with the seller. If you’re bidding on REO properties on the MLS, you’ll need to make close to 50 bids (or more) to get a ratified contract due to increased competition and banks’ willingness to wait for a better price.
I know. Numbers aren’t pretty, but you can do something about them. Only offer to buy properties from motivated sellers.

One thing to always remember

Get one thing clear in your head. You are looking for motivated sellers, not properties. Look for the signs of motivation. If you don’t see any signs of motivation, don’t make an offer. It will be a waste of time. This includes REO properties.

Your mission should be to generate as many motivated leads as possible. The more leads you have, the more business you can do. You also won’t be tempted to try to make a “lean” deal work. We only want good, desirable deals that we know will wholesale quickly, have high rehab profit potential, or generate good cash flow. Of course, if your transactions have all these characteristics, you will make deposits at the bank frequently.

The key is to only deal with motivated sellers. If the seller is not motivated, you need to move quickly. If so, make sure you understand their problem and offer solutions. There’s a chance to hit a home run. Always think win-win. Being able to feel the motivation and tap into it will get you paid.

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