If you’ve ever read a book on real estate investing, you’ve read that the best deals come from motivated sellers. Now how do you find one?
A friend of mine told me the following story: “My wife and I were trying to keep the renters happy, the rent coming in and the house repaired – while living 2100 miles away. You bet I was motivated. We just sold our house last month, and even got a good price, but I’ll tell you a secret. We would have sold the place for… well I don’t want to stress out the buyer if he reads this. Let’s just say we would have sold it for much less.”
There’s your first clue on finding a motivated seller. If his (or her) property isn’t where he is, he’s probably ready to deal. How do you get this information? By asking. Talk to the real estate agent, the neighbors, and anyone else who might know something useful.
Here are some other things to watch for that may indicate a motivated seller.
1. Relocation. If you hear that the seller is relocating for work, ask when he will be moving. He may already be worrying about those double payments.
2. Divorce. Divorce or relationship problems create many motivated sellers. Often a house payment needed both parties, and will have to be sold quickly.
3. Financial problems. A failing business, too much debt or other financial problems often force a sale. Find out if the owner is behind on payments.
4. Tenant problems. It is easy to get tired of being a landlord. It is also common to want to get out at any reasonable price.
5. Probate. If the house is in probate, and the heirs are all waiting to get their inheritance, they may be more interested in a quick sale than a great price.
6. Up-sizing or down-sizing. Owners moving into a larger or a smaller home may already have one in mind and need to sell quickly.
More Clues For Finding A Motivated Seller
Another way to find motivated sellers is to pay attention to the wording of ads in the classifieds. Statements like, “Need to sell,” “Must sell,” and “Will look at all offers,” are good indicators. “Must have a good job,” in a rental ad may indicate a landlord that is tired of tenants and ready to sell.
Some other methods:
1. Find neglected properties. If they aren’t maintaining the property, they may be short on cash, tired of it, or out of town – all good motivators.
2. Use property tax rolls. Go to the county records, which are open to the public in most places. What you are looking for is properties that list an owner with an address far away.
3. Use timing. Just before school starts, people are motivated to get their house sold so they can get their kids enrolled in the new school where they are moving. If an apartment building has been sitting there for sale for the whole winter, the owner may be tired of the bills and ready to get it sold fast.
The bottom line is to use your eyes and ears and look for the clues. Talking to people helps a lot. However you find your motivated sellers, the next step is to motivate them even more, by giving them what they want. Start by negotiating for a fast, easy closing for them – and a good price for you. That, however, is a topic for another article.