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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