I've been a motivated seller before. I was so down on my luck at one point in my life that I didn't have enough money to pay my bills. The reality is that motivated sellers exist.
They always have and they always will. In fact, in any marketplace, at any time, there are always a set percentage of sellers who are highly motivated to sell their properties. Why? Because of the following fact:
Most motivated sellers are created by personal reasons, not economic reasons.
Market crashes in an entire area are rare. In most cases, motivated sellers are created by some personal situation unique to that individual.
While this personal situation is unique to the seller, you need to understand that there are patterns that play out over and over. You will be able to
concentrate your marketing efforts on these known pools of highly motivated sellers.
When a seller is moving and can't sell his house, he is faced with potential double payments or with the prospects of managing his property as a long distance rental.
When a homeowner gets into a situation where they have to transfer because of his work or move because of other reasons, the scene is set for a possible motivated seller.
The owner will usually have a specific date on which he will be moving or leaving. The closer you are to that date, the more motivated the seller will be.
Finding motivated sellers is fun when you go after it with the right attitude. Ideally, you want to feel like sellers are chasing after you, not you chasing them.
Many times a home can be an emotional anchor that ties
a person to a painful memory. When two people who are married or involved in a serious relationship decide to call it quits, it's not at all uncommon for a nice home to come up for sale and quick. Divorce creates the need to sell a property for three reasons.
It costs too much for one person to live in the home by him or her self. Dividing the assets is the easiest way to get a clean break in the relationship. Emotions from the relationship are linked to the house, and the owners want a fresh start.
There are many sellers out there working to put the pieces of their lives back together after the painful aftermath of a breakup. These people need your help to get out from the pressing reality of having to deal with their property.
There are many sellers out there working to put the pieces of their lives back together after the painful aftermath of a breakup. These people need your help to get out from the pressing reality of having to deal with their property.
Debt and money troubles are a reality for many sellers. Given the choice between foreclosure and selling, many owners choose to sell. One group of homeowners who need your help are those who've managed to get behind in their payments.
They could just be a month or two behind, or they could be much farther behind and face immediate foreclosure. Using purchase option techniques you are able to help these struggling sellers and earn a profit too.
One of the best sources of motivated sellers are landlords who want out. There are three reasons they make great motivated sellers.
First, they are already used to leasing out their property. This is the first half of a purchase option deal.
Second, they are used to letting someone live in their property, controlling it, for just one months security deposit.
While this isn't nothing down, it is almost nothing down. Third, since the property was a rental and not their primary residence, chances are they won't need all their equity out of the property to immediately go buy another property.
Many people who inherit property don't want to have any involvement with the property. They just want to sell it. If they can't sell it themselves, then your creative offer just might be the best way out for them.
One of the untapped areas of investing is finding owners who have received a home through probate. Homes go into probate when a person dies and leaves their house to a relative.
Many people who inherit a property are willing to accept much less for the property than it is actually worth. After all, it was given to them.
They didn't have to work hard to buy the house. And just like someone who has won the lottery becomes better at spending overnight, the new owner of a home received through probate is often willing to take less in order to turn a house into cash.
Growing families can stretch the seams of small houses which sparks the need for a larger place to live. Of course, for most people this means selling their old house.
You now know why motivated sellers sell. You also know what signs to be looking for when you are talking with a seller.
There are two criteria you must examine in your search for a motivated seller: The seller's motivation andt the seller's situation
Think about the M in motivated seller representing the seller's reasons for selling her motivation. And the S stands for the seller's situation. You need to find a seller with both.
First you must dig to understand the seller's motivation for selling the property. Does the sellers motivation fit into one of the seven categories you just learned? When is their deadline for selling?
What else have they tried and what alternatives do they have left? How open have they been about sharing their situation with you? All of these questions will help you determine if the seller has a compelling reason to sell.
Next you need to understand the seller's situation. As an investor, you need to find a seller who is either flexible on the price of the property or on the terms of the sale.
If the seller needs full price and all cash at closing, it is almost impossible for you, as an investor, to make a profit on the home. Before a property becomes attractive for an all cash price to a savvy investor, the price needs to drop by 30-40 percent.
While many investors aggressively negotiate with sellers on the price in the hopes of beating them down by these percentages, the purchase option is designed to allow you to offer a higher price to the seller in exchange for flexible terms.
As a creative investor who wants to help people and make money, you are looking for a seller who has flexibility on the terms of the sale.
You want someone who does not need all of their cash out of the property up front. Does the seller need her equity out of her home to go buy her next home?
Or does she already own a second home? What would the seller do if she could not sell? If she would rent it out for a few years and then go to sell, she can potentially be flexible on the terms of sale.
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