The Art of Finding Motivated Sellers
Such is that of good real estate deals, the good deals are those which are not entirely based on the selling price of the home relative to it’s neighborhood, but of the emotions attached to the owners at the time.
For instance, a homeowner may be undergoing a sea of emotion and may be more eager to sell than others. Scenarios such as foreclosure, divorce, or a death in the family-
though quite unfortunate for the homeowners, in reality provides an opportunity for the investor or homebuyer to purchase a home for much less than it’s true value. Instead of thinking of these opportunities as predatory and exploitative of the homeowner, realize that these individuals are eager to sell their homes to resolve a problem-i.e. in a foreclosure or bankruptcy they will have many fees to pay off and as a result must liquidate their assets in order to stay afloat. In the event of a divorce, assets will also have to be redistributed which will incur large legal fees as well, etc. The reasons vary, and the truth is, investors are not only helping themselves with windfall profits but also helping the homeowners in the aforementioned scenarios get out of a financial rut. It’s a win-win, which is what real estate is all about.
So now that you are convinced that the good deals in real estate depend on identifying these motivated sellers, how do you go about and find them? Your local County Recorder’s office is an indispensable research source. Put on your CSI thinking caps, and start finding leads!
1. Notice Of Default: available publicly, is a notice that banks send out to borrowers notifying them that they are delinquent on their mortgage payments.
2. Notice To Condemn: notifies the homeowner that their property doesn’t meet zoning or building code requirements for that county.
3. Notice Of Divorce: this happens before the actual divorce, and provides a clue that a divorce will happen in the near future.
4. Delinquent Property Taxes: back taxes that the State will try to recoup one way or another.
5. Pending probate court cases where the beneficiaries live out of State: Out of state beneficiaries may be more eager to sell for a fair range since they do not have an interest in managing the property remotely.
6. Out of State owners can usually qualify as a possible lead to a good deal.
7: Rental houses – the idea behind rentals is that some rentals are on the market, because owners may have tried to sell in the past with no success, and are no stuck with a property that they really don’t want. Look for clues such as broken windows, graffiti, and other tell-tale signs that this property is not highly valued by the current owner.
8: For Sale By Owner – some of these homes may not have enough equity to pay a realtor. These are prime candidates for a subject to type deal.
In all cases, approach as a consultant trying to solve a problem they may have. Empathy and listening skills are highly important. Ultimately by demonstrating your sincerity you will be able to also reap benefits from this transaction in the forms of:
1: Lower price offering.
2: Subject to deals
3: Flexible price offering.
4: Low to no down payment required.
So after you find these deals, make sure you close in on it as quickly as possible because competitors are everywhere! But first hire a handyman to evaluate the property in question to see if and how much repairs would be necessary on the property and factor that into the overall costs.