Pre-Screening Sellers For Your Real Estate Investing Business – Part 2

By remembering just a few basics, you, as a Real Estate Investor, can quickly determine whether or not a seller is motivated to sell their property. First of all, a motivated seller will ask questions like “how soon can you buy my house?” or “How can you help me get out of this situation?” or “How soon can you get here?” An experienced Real Estate Investor knows these are really good questions for a seller to ask.

There are two types of houses we are going to buy, either pretty houses or ugly houses and there are motivated sellers in both of these categories. When you are marketing to sellers, there are certain types of sellers who are much more likely to have a house they need to sell.

For example, I personally like working with out of state owners (folks who own a property where you live but don’t live there full time), heirs, divorces, vacant houses, estate and probate properties, military transfers and pre-foreclosures. These sellers are much more likely to have a house they need to sell “right now” and that’s the kind of seller you want to work with. As a Real Estate Investor, you may also run into landlords who are fed up with tenants ruining their properties over and over. These are all good sources of motivated sellers. Most of these sellers are folks who don’t live in these properties.

Okay, so how are you, the Real Estate Investor, going to identify a motivated seller? First of all, don’t be afraid to ask questions. This is a basic truth in the real estate investing business. The more willing a seller is to answer whatever questions you ask, the more motivated they are. Never be afraid to ask “Is that the least you would take?” You might be really surprised at the answer to this question, especially if you are dealing with a motivated seller.

For example, I recently worked with a seller who was asking $205,000 for a property in good condition worth $275,000. This seller was already motivated, but I ended up paying only $180,000 for this property simply because she asked if they would accept a lower price. So be willing to ask questions and know that the more willing a seller is to answer them, the better deal you will make. This is going to be very crucial to the success of your real estate investing business and the amount of profit you make on your deals.

Another basic truth is that the more equity there is in a property, the better a deal you are likely to make, especially if the house needs repairs. Usually if there is a lot of equity and the sellers have owned the home for a long time or if they have just inherited it, the more likely they are to let you have a large chunk of that equity for your profit.

If there is very little equity in the property, you are much less likely to be able to create a good deal unless the property owner is simply willing to deed you the property for the balance of the mortgage and walk away. As a seasoned Real Estate Investor, I can personally tell you this absolutely happens. So don’t be afraid to ask the question “Are you willing to sell for what you owe?” If they say yes, you are dealing with a motivated seller who is likely to deed you the property for the balance of their mortgage, which not only will lead to a  good profit for you, but you don’t have to worry about where the money is coming from to fund your deal.

Another truth is that the uglier the house, the more motivated the seller is likely to be. If you aren’t getting your offers accepted on ugly houses that you can quickly wholesale, you aren’t targeting the right kind of junker properties. Ask any Real Estate Investor who has been in the business for awhile and they will tell you there is a fortune to be made in ugly houses. The more difficult it is to find this type of seller, the better deal you are going to make.

Another situation that arises fairly often in today’s market and creates motivated sellers is a simple one for you to spot.  If a seller is behind on payments, this is definitely going to be a motivated seller. If a motivated seller is behind on payments and they have a lot of equity, this is an opportunity for you to make a really good deal. You as a Real Estate Investor just have to learn to use a script to ask the right questions to determine if a seller is motivated and what kind of deal you are going to make with them. It’s not magic; it just takes a little negotiation and a few questions to pre-screen sellers and create some really good deals.

Just remember this, the seller is either in or they are out, don’t waste your time chasing dead deals. If you follow this simple rule, you will make a lot of money in your real estate investing business.

For more information on pre-screening sellers, locating motivated sellers and buyers and exit strategies, visit Kathy Kennebrook’s website at www.marketingmagiclady.com.