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Investing in Real Estate? Locating the Elusive Motivated Seller is Key to Success


Most home buyers and real estate investors these days are looking for a deal. With the increasing inventory of homes on the market many buyers rightfully feel they can afford to be choosy. Unfortunately, sellers haven't caught up with the idea and as a result buyers aren't as willing to negotiate terms and price as it would seem the market should dictate. On those occasions when you can find a seller who is truly motivated to sell you stand to be able to purchase home at less than market value. If you're a first time home buyer this can place more money in your pocket due to lower mortgage payments while investors can look forward to making a profit down the road.

While locating such a great deal may seem as though it's a matter of luck, a good portion of the credit goes to those investors who are diligent in searching out motivated sellers. It is important to recognize first of all that simply because a seller places a for sale sign in their yard and puts their home on the market, does not necessarily mean they are motivated to sell said home.

You also need to examine your own motives for purchasing a home when you begin the buying process. Narrowing down the parameters of your search can help you to focus your efforts on a smaller group of properties. In a matter of sorts it's like trying to find the proverbial needle in a haystack. In which haystack are you more likely to find the needle; a small stack or a large stack? The same is true when searching for a seller truly motivated to sell. Narrow down the possibilities first and you will see a return on your efforts.

Identify how much money you can realistically spend up front. It's hard to negotiate even with a motivated seller if you don't know the depth of your own pockets. In the event you plan to pay with cash, identify how much money you're willing to spend. Buyers who plan to finance the purchase of the property should take the time to speak with a lender to find out how much they can really spend, not how much they think they can spend. When considering a home purchase with an eye toward investment, remember the golden rule of investing: you make your money up front. Overpaying for a property always reduces your profit when you sell.

Be sure to consider the psychology of the seller and why he or she is willing to sell. If a home owner is truly motivated to sell, there is always a reason behind it. They may not always be willing to share that reason with you but with a little savvy detective work you can uncover it. Take a look around when you are shown the house and note whether there are any packing boxes lying around. Could be a clue the seller plans an imminent move and therefore may be motivated to sell for financial and/or time reasons. Whenever possible try to determine the reason why the owner is interested in selling. If you can't uncover one, it's a strong possibility the seller is not motivated to sell at all.

Don't forget to keep track of sellers with whom you speak. It won't do you much good to track down motivated sellers if you drop the ball by failing to keep track of them.

It is important to also recognize you can reduce the amount of legwork you have to do in locating motivated sellers by having them contact you first. Many real estate investors are beginning to use what is known as guerilla marketing techniques. These techniques are highly effective and time efficient. Chances are you've probably seen at least one or two corner signs or billboards indicating an investor will purchase properties for cash. These signs are used for one reason and one reason only: they work. You can usually have corner signs printed for a limited amount of money and receive a lot of bang for your buck. You can also use a similar technique by purchasing television and radio spots.

If you do elect to use such a marketing technique to entice motivated sellers into contacting you make sure you have a reliable form of communication. Either invest in a cell phone and provide that number at which you can be contacted at all times or hook up your land line to a good quality answering machine. While these techniques can provide you with numerous leads, failing to ensure you have a reliable way to be contacted by these sellers will negate the positive effects they provide.


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