Do you know how to approach motivated sellers in real estate deals?
In working with motivated sellers, it is important to note that their needs are not congruent with the needs of those that are — for lack of a better term — unmotivated. If for nothing else, motivated sellers are just that: motivated. For better or for worse, outside factors are influencing their selling decision.
As an investor, it is in your best interest to determine why motivated sellers in real estate are putting their property on the market. Not only must you sympathize with their current situation, but you must proceed carefully; always making sure to place their needs ahead of your own. If you want to realize your full potential, at least as it pertains to working with motivated sellers in real estate, you must first understand what it is they truly want out of a deal.
In the event you are confronted with a motivated seller, how well you handle their personal situation will be very telling in how a respective deal transpires.
How To Work With Motivated Sellers In Real Estate Deals
Any attempt to find motivated sellers in real estate should place an emphasis on communication. In fact, it’s safe to assume that no progress will ever be made on a deal that includes a motivated seller if you aren’t willing to put in the time and listen to what they have to say. Remember, real estate is a people business; any hopes of making headway on a deal is contingent on the relationships you build with those in the industry.
It is important to note, however, that the same sentiment is amplified in the event you are confronted with a motivated seller. Nothing, at least that I am aware of, has the ability to place the odds in your favor when working with a motivated seller more than creating a genuine connection; only then will you be able to discern what they covet the most.
In order to move a deal forward, at least with motivated seller leads, you must find out what it is they truly want. While price will always play an important role, there are often ulterior motives at play. For the most part, time is of the essence, as motivated sellers are just that: motivated.
Let’s take look at how to approach motivated sellers in real estate deals:
Create A Genuine Connection
Again, real estate is a people business. Nothing is more valuable to a real estate investor than the relationships they forge over the course of their career. However, those relationships are in no way relegated to industry professionals. The opportunities that present themselves by working with buyers and sellers carry just as much weight as working with those in the industry, if not more so. If for nothing else, establishing a genuine relationship with those you intend to buy from and sell to gives you a distinct advantage, and motivated sellers are no exception. In fact, I maintain that the best way to work with a motivated seller is to get to know them on a personal level before you even consider discussing the semantics of a deal.
If you can position yourself in a way that places their needs ahead of your own, you are already well ahead of the curve. However, it may be hard to convince motivated sellers in real estate that you are doing them a favor by taking their home, which begs the question; How can you create a relationship that places an emphasis on the seller’s needs? The answer is simple: communication. Take the time to listen to what it is owners have to say. The more they open up, the better. With a better idea of where they are coming from and what they are really looking to get out of a deal, you will be able to make a more attractive offer.
The moment you contact a motivated seller in real estate, your intentions will be divulged —which isn’t necessarily a bad thing. In fact, I recommend being as transparent as possible. Don’t be afraid to let the seller know your intentions. Tell them what you intend to do and how you intend to do it, but the idea is to create a narrative that will benefit both sides. While you are in it to secure a property, make it abundantly clear that you are also there to help the seller. When it comes down to it, investors are one of the best options for motivated sellers to choose from if they hope to avoid bankruptcy.
Determine The Motivation
In catering to the needs of motivated sellers, you must place an emphasis on their current situation. It is important to note that while the impending deal is a business transaction to you, it is a lot more emotional for the respective owner. A little empathy will go a long way in opening things up. Never approach motivated sellers from a position of power, but rather on an equal playing field. Remember, they don’t have to sell to you no matter how dire their situation is. The best thing investors can do is to sympathize with the seller and get in their good graces; only then will they confide in you.
That said, if you can discover the root of their motivation, you can see to it their needs are met. I recommend asking the following questions once you have gained their trust:
- How long has the owner lived in the property?
- What is the motivation behind selling the property at this time? Is it probate, absentee owner, at risk of foreclosure or something else?
- What does the owner hope to receive in return? What’s their asking price and expectations?
- Has the owner listed the property for sale, or are they simply shopping around?
- Does the owner have any other properties they intend to sell?
Motivated sellers in real estate represent hot leads. For all intents and purposes, they are being forced to sell a home and have limited options in doing so. However, it is important to note that limited options doesn’t necessarily mean you will be their only option. It is entirely possible that other investors have their sights set on the same property. If you hope to gain a competitive edge, I highly recommend placing the needs of the owner above your own.
Once you can identify what it is they want out of a respective deal, it will be a lot easier to agree on terms everyone is happy with. At the very least, communicating with motivated sellers in real estate is the catalyst for some of today’s most lucrative deals. Don’t let a great deal slip though your hands because you weren’t willing to take a minute and sympathize with the seller. That said, I can think of nothing else that will help you agree to terms on a respective deal with a motivated seller more so than communication.