How To Identify Motivated Sellers For Real Estate Investing

The success of real estate investing is mainly determined by the availability of good deals. In most real estate investing business models, you are unlikely to make a profit unless you can buy properties cheaply.

My best source of great deals is motivated sellers. When you are buying houses, you will come across all types of sellers. Identifying motivated sellers who drive your business is crucial to your success.

If your marketing if more targeted, you will attract more motivated sellers. I am particularly fond of targeting people with legal trouble who own real estate.   These usually turn out to be motivated sellers.

If you use general advertising like classified ads, Craigslist, newspapers, etc, you are likely to attract all types of people looking to sell their houses.

So how can you identify people who really need to sell their houses? The easiest way to do this is to divide them into categories.

1)    Unmotivated seller
This is the person that thinks their house is the best in the sub-division.   They have taken great trouble to make sure it's perfect for the next owner occupier.

They have tried to sell and most likely not been successful yet.   They are looking to get the full market price.

They cannot discuss details like mortgage balances, etc.

Of course, you will never make money from these type of deal, so you are better off forgetting it.

2)    Luke-warm seller
This guy calls and asks you how you work, because he might be willing to sell you their house.

He will listen keenly, maybe ask questions, but again is not very forth-coming with necessary information such as mortgage balance.

He will probably tell you he has been trying to sell it for say, $150,000 and ask you to make him an offer.   He wants you to go see the house first 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 if you are a savvy real estate investor, you never make an offer unless you have all the numbers such as the fair market value, repairs, mortgage balance and so on.

You are likely to waste a lot of time driving to see such houses and not get a deal.

Usually I will ask him to call me with all the number before I can make an offer.

3)    Motivated seller
This is the person who really needs to sell their house.   Maybe he is facing foreclosure of is behind on his mortgage payments.

Probably they have tried to sell and see no other way out.   They will keenly provide all the information you need. They just need a way out of their mortgage.

Most of my motivated sellers submit their information through my real estate investor website; by the time I talk to them I already know if the deal can work or not.

If I talk to such a seller instead, they provide all the information in less than 5 minutes.

In my business, this is the only type of seller I deal with.   This is the only type of seller where you are likely to get great deals that can make you a lot of money.

About the 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 investor 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.

Author (simon87). Submitted on Tue, 29 Nov 2011 Time: 11:18 AM

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