OfflineHow To Identify Motivated Sellers
By: Omar J.
Submitted: 09:19AM on Wednesday 17 September 2008
The author has permitted the reprinting and redistribution of this article.
To find motivated sellers you have to look for them in the right places. It's sort of like fishing you want to go where the fish are biting and once you have discovered where they are biting you want to have the right bait on your line so that you can hook them and reel them in.
But first you must understand the mindset and characteristics of a motivated seller and what are the reasons that make them motivated to sell in the first place? Here are a few of those characteristics.
1) They desperately need to sell due to circumstances.
2) They are looking for a quick solution to their problems.
3) They are not afforded the time or don't have the money to sell their house the traditional way.
4) You are possibly their last hope to alleviate their burden.
Let's face it a big chunk of your success as a real estate investor will be based on your ability to distinguish between the motivated seller and the non-motivated seller. The non-motivated seller you want to stay far away from because they will only waste your valuable time, frustrate you and leave you wondering if the real estate business is really for you.
You will never convince a non-motivated seller to turn into a motivated seller unless you are willing to pay retail prices for their house. So it is imperative that you quickly and efficiently screen your sellers to determine if they are motivated or not.
Some of the questions that you should ask in the screening process are the following:
Would you sell your house for what you owe on it?
If the seller answers yes to this question they are truly motivated and you should be able to get a free house by taking over the debt or almost free house with debt plus some cash given to the seller.
Would you let me buy your house by taking over the payments?
If the seller answers yes to this question they are truly motivated and you should be able to offer as a solution a lease option or some type of owner financing "subject to" deal.
I'm a real estate investor and I am in the business of making a profit so I can't pay retail prices for houses. Do you have a problem with that?
If the seller answers no to this question that they don’t have a problem, they are truly motivated and after some negotiation you will be able to get their property at a substantial discount.
Are you willing to accept some creative financing terms that will allow me to purchase your house?
If the seller answers yes to this question they are truly motivated and you should be able to craft an offer and close a deal that involves some type of owner financing.
In conclusion, as a real estate investor you will save yourself a lot of frustration by identifying and ascertaining whether or not your seller is truly motivated. Always remember that a motivated seller is someone that needs to sell.
"THE ARCHITECT OF YOUR DESTINY IS YOURSELF"
"SUCCESS WALKS HAND IN HAND WITH FAILURE"
I found a motivated seller who has stopped paying her taxes and has vacated the property to relocate for work. The place needs a lot of work and updating but none the less is a very nice home with an accessory 2 bd apt above the garage. I contacted the realator who listed it and asked for comps within the last 6 mo to a year. The price and taxes are still to high to cover expenses 100% with rent. so What are some creative financing ideas to help me get the property without putting down a huge downpayment?
Just take over the payments. You would have to make up the back taxes at some point. If you want it to cash flow then the price has to come down.
Depending on what your market is, comps from 6-12 months may be WAY out of date.
ThankYou for answering so quickly. I'll try taking over the payment solution.
As far as the comps go what do you suggest?
It depends on what your market is doing right now. If it's moving quickly then 3ish months. If it's fairly stable (yes, some actually are) then 6 months might be fine.