Posts Tagged ‘motivated sellers’

4 things you must know before talking to motivated sellers

Monday, January 30th, 2012

Most of the best deals in real estate investing come from people who are motivated to sell their houses.   Even though the market has so many houses sitting there without buyers, not all sellers are motivated enough to leave enough room for you to make a profit.

Even the ones who are motivated may not have deals that could make you a profit.

It is therefore necessary when you talk to sellers that you weed out potential time wasters without turning off potentially good deals.

Here are 5 things you must know before you talk to the next motivated seller.

1) Do not waste your time
You must be the one to lead the direction of the conversation. You must direct it in the direction that provides answers to all the vital questions you need to determine if you have a deal or not.

Most buyers start talking about their beautiful house, updates they have done, nice neighborhood, and so on. Most of them are attached to their house and can continue for hours if you do not lead the conversation.

None of this information is of any value to you unless you can buy their house at a price that makes you a profit.

I make sure that I always have a script with a list of questions they must answer in the conversation.  the questions can be answered in any order, but I must know if I can make the deal happen or not within 2 minutes.

First, you must deal only with motivated sellers.  If they cannot tell you the mortgage balance, they are not motivated enough.  Most motivated sellers have no problem talking about their mortgage balance; they talk about it as casually as the number of rooms.

In my business, by the time I talk to motivated sellers, they have already been pre-screened and pre-negotiated with by my real estate investor website. A few of them will still prefer to call, and they usually have to be motivated enough to leave a voice message.

My virtual assistant then calls them and fills all the information on my website.   By the time I get to talk to them, I already know if it’s a deal or not.

This way, I avoid wasting my time or the sellers time with houses I might never buy.

2) Develop rapport
Do not  represent yourself  as Mr. Big Corporate House Buying Company.  You are just a regular guy that wants to buy their house as an investment property. Their house seems to meet your needs.

Build rapport with them as you talk, especially when you establish you can make the deal happen.

3) Listen, listen, listen
Listen, listen, listen – and since you are leading the conversation, learn how they got into the predicament, what repairs are needed, etc.

You mainly need the information that you need to determine the level of motivation, asking price, equity and repairs.
4) Negotiate
Always negotiate lower even though the asking price might look low.  Most people might feel like they got a raw deal if you do not negotiate.

You can negotiate on appliances, closing costs or even furniture, not just the price.

And always make an appointment to go see the house if the deal looks good at the first glance.

This will stop them from shopping your competition.  You can always cancel the appointment if you later think the numbers are not good for you.

As long as you remember to treat them nice, with respect and with sensitivity, they will be as keen to sell you their house as you are to buy it.

When your real estate investing business is run from an interactive real estate investing website, the website tells your story for you, pre-educating motivated sellers how you buy houses. It also automates most aspects of real estate investing, so you close more deals using less time, money and effort. Learn how you can employ such a website so you receive pre-screened and pre-negotiated deals ready for you to make an offer in just a few minutes.

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How To Buy Houses At The Right Price For Real Estate Investing

Monday, January 2nd, 2012

In real estate investing, buy low sell high is a very common expression.   Though it sounds quite obvious, it is not always easy to buy houses at the right price.

Your buying price must be low enough to make you profits whether you sell them right away or keep them as cash flow properties.

So how do you determine the best price for your property?

A few years ago, it was not un-usual to buy a house at 80 cents on the dollar and wholesale it for a tidy profit because the market supported it.  In fact, you always expected the price of the house to go up within a few months.

In the current market, when you buy a house, you expect the price to go down.   Almost every home owner has lost some equity in the home in the last one year.

When buying a house, you must consider this fact.  Today, the regular price for wholesale properties is 60 to 65 cents on the dollar minus repairs.

Also, tenants have become more choosy since there are more houses to chose from, and are likely to go for a house with a pristine rehab job.

This has made rental prices more competitive.

When you are buying houses, it is necessary to make sure you let the seller know these facts.

So I always let a seller know that even though it seems like they are giving me a deep discount on their property, I have to fix it, then sell it, probably hold it for months and eventually sell it at a deep discount.

And probably I’ll not be able to sell it at all!

I explain that I might lose most of my profits when I hold it.  When most sellers understand these facts, most  of them relax.

I like to make this clear before I can make an offer.  I have come to learn that even though motivated sellers really need to get rid of their properties, they do not like to feel like they are being taken advantage of.

Once they understand the current market conditions, then I can make my offer – and it offer does not look too low-ball and the seller is likely to accept it.

Why do you need to explain all this?

In the current market, it means you must buy houses much cheaper than we used to just a few years ago since you also must sell low in order to sell it at all.

If you buy properties on terms such as lease options, it is also necessary to do this. You must remember that even though the price for properties that you buy on terms is usually higher, it must still be low enough to cater for the facts above.

This way, in a year or two when you try to sell it, the price at that price will support the sale.

When buying houses, it is necessary to to pre-educate motivated sellers so they understand how you buy houses. It is also important to generate leads and follow up with them automatically to convert them to motivated sellers automatically. Find out how an automated real estate investing website can attract, pre-educate and deliver motivated sellers fully pre-screened and pre-negotiated so you close more deals using less time, money and effort.

 

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How To Overcome Objections By Motivated Sellers In Real Estate Investing

Tuesday, December 13th, 2011

In real estate investing, having all the numbers is crucial to evaluating a deal and making a good offer that gets accepted and makes you a profit.  Most often when I talk to motivated sellers, I find they are not willing to provide some of the information I need to evaluate the deal accurately. Usually they do not want to discuss the mortgage balance among other issues.

So how do you overcome these objections and get all the information you need?

In my real estate investing business, I only deal with sellers who are motivated. By being motivated, they must be willing to provide most of the information I need without pressure. Generally I am not interested with sellers who are luke-warm and are just shopping to see if they can let you buy their house.

Most of my motivated sellers submit their information through my real estate investor website. In this case, the website does the job of pre-screening them and pre-negotiating with them, so I just need a few minutes to tell whether it is a deal or not.

Here are a few common objections and how to overcome them:

Mortgage balance:
Once in a while when you talk to motivated sellers and ask them their mortgage balance, they might tell you it’s none of your business, or if they are polite “why do you need to know?”. So I have come up with a simple statement:

“In order for me to able to evaluate the deal and make a fair offer that makes sense both to you and me and pay off the outstanding mortgage when I buy it, I must know the mortgage balance owed on it.”

Then I go completely silent… say nothing!

Usually they will consider it and give the information.

You must let them know that without mortgage balance, you will be unable to make any offer. If they are really motivated, they will provide this information. If they do not provide it, you have no business talking to them.
A motivated seller will tell you anything in the world to sell you their house.

Repairs:
Do not be surprised that their estimation of repairs is always on the lower side. In my business, I always assume that I will need to do paint, carpet, bathrooms and kitchen.

Before I ask for repairs my conversation goes something like this:

“How long have you lived in the house?”

“Have you done any remodeling on it?”

“So what repairs does the house need?”

Usually I will ask about carpet, paint, kitchen and bathrooms. When you take your conversation like this, you are likely to get more accurate answers that you can rely on.

Asking price:
This is usually the toughest part to negotiate. Of course, you must know the mortgage balance before you can ask this question, or even make an offer.

My question goes something like this:

“If I can buy your house all cash and close quickly, what is the least you can take for it?”

Once they give an answer, I usually just say, “Hmm…”.

Then I go silent.

Not a word until they speak.  In most cases, they will talk themselves down without me saying another word. Sometimes I will still follow up with “Is that the best you can do?”.

In most cases, this technique works like a charm. Good luck in your next real estate investing deal.

Simon Macharia is a real estate investor in Dallas Texas, and uses the an interactive real estate investor website to pre-screen and pre-negotiate with motivated sellers.  Learn how you can close more deals using less money, time and effort with a real estate investing website.

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How To Identify Motivated Sellers For Real Estate Investing

Monday, November 21st, 2011

One of the most important things that determine the success of real estate investing business is availability of good deals. Unless you can buy properties cheaply, you are unlikely to make profits with most real estate investing business models.

Motivated sellers are my best source of great deals. When you are buying houses, you will come across all types of sellers. You must be able to identify the motivated sellers who drive your business.
Of course the more targeted your marketing is, the more motivated sellers you will attract in your business. I am particularly fond of targeting people with legal trouble who own real estate. These are most likely to be motivated sellers.

If you also do general advertising such a classified ads, bandit signs, and so on, you are likely to attract all kinds of people looking to sell their houses.

So how do you identify the motivated sellers? The easiest way to do this is to divide them into categories.

1) Unmotivated seller
This is the person that thinks their house is the best in the sub-division. They have taken great trouble to make sure it’s perfect for the next owner occupier.

They have probably tried to list it with their Realtor, or even for sale by owner, but have not been successful. In most cases they are looking the the full market price.

They will not be willing to discuss details and numbers, such as their mortgage balance.

Of course, you will never make money from these type of deal, so you are better off forgetting it.

2) Luke-warm seller
This is the type of person who calls you and says he might be willing to let you buy his house, and asks you to explain how you work.

He will listen keenly, maybe ask questions, but again is not very forth-coming with necessary information such as mortgage balance.

He will probably tell you he has been trying to sell it for say, $150,000 and ask you to make him an offer. He will probably ask you to go see the house first before you even know the numbers.

Even though he will show the interest to be flexible enough to negotiate, you are unlikely to get a good deal from him.

Of course if you are a savvy real estate investor, you never make an offer unless you have all the numbers such as the fair market value, repairs, mortgage balance and so on.

You could end up wasting a lot of time driving to see many such properties and not get any deals out of it.

Usually I ask him to give me a call with all the numbers before I can make him an offer.

3) Motivated seller
This is the person who really needs to sell their house. Maybe they are behind on their mortgage payments or even facing foreclosure.

Probably they have tried to sell and see no other way out. They will give you all the information you need without hesitation. Most of them just want to get out of the mortgage.

In my business, most motivated sellers submit their information through my real estate investor website, so by the time I call them, I already know whether I can make the deal happen or not.

If I pre-screen such a seller on the phone, the conversation is likely to take less than 5 minutes and they provide all the information I need.

This is the only type of seller I deal with in my business. This is the only type of seller where you are likely to get great deals that can make you a lot of money.

Successful real estate investing requires that you pre-educate potential motivated sellers about how you do business to close more deals. Learn how an interactive real estate investor website can pre-educated motivated sellers for you, pre-screen them and pre-negotiate deals for you saving you time, money and effort allowing you to close more deals.

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How To Make Offers That Get Accepted In Real Estate Investing

Wednesday, February 2nd, 2011

One of the biggest challenges for real estate investors is to make offers that get accepted. When investing in real estate, buying properties is the basic foundation of any real estate investing business.

Unless you buy properties, you cannot make any money.

Here are a few tips on how to make sure your offers get accepted.

The offer you make depends on the type of property you are buying.

1)      Buying from motivated sellers

If you buy houses from motivated sellers, it is necessary to have the following pieces of information:

a)      Market Value

Do your due diligence to find out conservatively how much the house would be worth in a perfect condition. You cannot make any offer until you have this information.

b)      Mortgage balance

You must get this information before you can make an offer. If a seller is not willing to provide this information, they are not motivated enough. Move on to a motivated seller.

The mortgage balance must allow you to buy the house and still leave you with a profit. Thus means that the offer you give must allow you to own the property free an clear and still make money.

c)       Repairs needed

Based on the information given by the seller, you can estimate the repair costs even before you drive to see the house.

It is necessary to do your own repair estimates before you can make an offer. Of course I prefer to see the house myself.

d)      Asking price

If the owner is asking for too much money given the above 3 pieces of information, you might never make the deal happen.

A good asking price must take into account the market value, mortgage balance and repairs. You can then make an offer based on the asking price. If at all the mortgage balance and repairs allow you to make an offer that can leave you with a profit, by all means do it.

No offer can be too low, but you also have to take into consideration the seller’s needs. If they are facing foreclosure, then they probably need some money to move, or their asking price might be just enough to get away from the property.

If the mortgage balance is too high compared to the value of the house, it does not make sense to make an offer. Move on to the next deal.

When all is said and done, the only bad offer is the one you have not made. Make as many offers as you can. You’ll be surprised how many get accepted.

2)      Buying foreclose properties

The only considerations to make is the asking (listing) price and repairs. The bank is trying to offload their inventory and are willing to negotiate.

In today’s market, most REOs will be listed below market value. Depending on your exit strategy, if the numbers are close to making sense, by all means make an offer.

Remember the banks are willing to negotiate, so always make an offer lower than the asking price.

In order to be successful in real estate investing, it is necessary to close as many deals as possible while spending as little time, money and effort as possible. Learn how you can achieve this by automating your real estate investing business with an automated real estate investor website.

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How To Target Motivated Sellers By Direct Marketing

Wednesday, November 24th, 2010

One of the most effective methods to find great deals for real estate investing is to target motivated sellers by direct mail.

This article will walk you through how to reach that all-elusive motivated seller, get his attention and close the deal.

1) Target motivated sellers

A motivated sellers is someone who is desperate to sell their house.

They must sell it to get out of a financial situation.

Maybe they are behind in mortgage payments, in foreclosure, or facing this possibility real soon.

 Motivated sellers are more than willing to negotiate below market price and leave a profit margin for you.  Often the houses must be repaired before they can be sold, making them hard to sell.  Such properties are best bought by real estate investors.

So the first thing you need to do is target these motivated sellers and get a targeted mailing list.   The easiest way is to look for people with real estate and in legal trouble.

Such people could be going through divorce, have inherited property, have bad tenants, are making more than one mortgage payment, are facing liens, etc.  You find this information from public records.

 People with expired properties from the MLS have been trying to sell unsuccessfully, and could become motivated sellers.  You may need to work with a Realtor to get these mailing lists.

I always target people who have owned the properties for at least 10 years, meaning they have possibly accumulated equity on their house.

2) Get a real estate investor website and phone number:

 Before you start your marketing, you must get a real estate investor website and a phone number.

The real estate investor website must be able to pre-educate and pre-screen motivated sellers so that when they submit their information to you, it takes you a few minutes to tell whether it is a deal or not.

Some people will call, others will submit their information quietly from the privacy of their computer.  A website will save you lots of time because it tells your story before you ever talk to them and pre-screens and pre-negotiates deals for you.

 And it does not cost you extra for the deals it presents to you.
When someone calls instead, chances are you may have to talk to them for 10 minutes only to find out the deal cannot work.   You can get worn out pretty fast.

A good real estate investor website is suggested  at the end of this article.

3) Send out your mail pieces

My most preferred method of reaching motivated sellers is post cards. I design my post cards from overnightprints.com.   The key is a postcard that commands instant attention and delivers your message direct and brutal.  I like the We Buy Houses, Get Cash For Your House, etc.

 You must get their attention in 10 seconds or it gets trashed.

I design my cards so they are brightly colored and glossy so they are impossible to miss from the pile of mail they receive.

 Make sure you provide a prominent web address so they go to your website instead of the phone.  Do not forget to put a phone number!

 Two postcards 30 days apart should be enough.

 Probate leads receive a sympathetic, personal letter for 6 months.

4) Close the deals
Once they call or submit information from your real estate investor website, determine if it is a deal or not, then follow up with the good deals through closing.

Get a real estate investor website that pre-screens motivated sellers and pre-negotiates for you, presenting deals that are ready to go, requiring just a few minutes to make an offer or let them go.

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How to get motivated seller leads for real estate investing

Sunday, January 24th, 2010

As in any business, the success of any real estate investing business is locating deals that can make you a profit. These deals mainly come from motivated sellers, or home owners who really need to sell.

Such motivated sellers are driven by circumstances beyond their control, and sometime they can lose the house if they do not sell. Such circumstances include

Foreclosure

  • Bankruptcy
  • Divorce
  • People with liens
  • Burned landlords with defaulting tenants
  • Job transfer – hence they own more than one home
  • Expired listings – homes that just don’t sell
  • Inherited property (and sometimes debt)
  • Property that needs repair, so is not marketable
  • And so on

The key to locating motivated sellers is locating people in trouble who own real estate.  Identifying sources of these leads will give you an almost unlimited number of leads that could become profitable deals.

There are several sources of such leads that exist in most places:

1)  Subscription newsletters

In my surrounding counties there are subscription newsletters that list every record in the local county court system. Even though these may not exist in your local market, they are valuable sources of good leads.

I check people in bankruptcy, divorce, liens, probates, etc, then check if they own real estate. If they do, they get into my mailing list

2) County records

From most counties, you can get information such as filed notice of default, foreclosure notices, probate notices, etc. These are valuable sources of leads for your real estate investing business

3) MLS listings

People trying to sell their houses for a long time unsuccessfully quickly become motivated sellers. These expired listings can be valuable source of leads for your real estate investing business

4) Burned landlords

Landlords filing for eviction in the local courthouses are fed up with their tenants and properties, and may be looking to sell as motivated sellers

 5) Compiled leads

Even though these might be over-shopped, you may find people that compile lists such a foreclosures, bankruptcies, etc for sale. Sometimes these can yield good leads for your real estate investing business

6) Absent home owners

People that own property, but their mailing address is different from the property address means they have more than one home. It’s likely these can be motivated sellers for your real estate investing business

Once you have identified the best leads for your real estate investing business, the next step is to send them marketing mail pieces whether post cards of letters.

Preferably, send them more than one mail piece spaced maybe 30 days apart. This will drastically increase response rate.

Always make sure that you provide a web address for your real estate investing website as well as a phone number. Your website should take the role of convincing them that you are the best buyer for their property and pre-screen and pre-negotiate the deal for you.

If they call instead, make sure you have a scripted series of pre-screening questions that will tell you if it is a deal or not quickly without wasting time.

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