You may consider yourself a real estate investor, but when you get right down to it, what you really are is a problem solver. Let’s face it, real estate investors are a dime a dozen. Depending on what part of the country you live in, there could be dozens of investors vying for the same properties and dealing with the same distressed homeowners you run into. What will separate you from the pack is in your ability to solve seller’s problems as quickly and painlessly as possible. If you can put their problems first and remember this throughout the process, you will end up getting more deals.
Sellers don’t want to listen to a pitch. They want to know what is in it for them. You most likely can’t entice them with any monetary gains, but what you can do is provide them relief in different ways. If they have been dealing with a foreclosure for months, they have been getting calls and letters every day. At this point, they want the path of least resistance and want to feel that they are in good hands. Their problem may be finding somewhere to live or buying an extra month so their kids can finish out the school year. In the grand scheme of the deal, these should be easy enough and far from ideal breakers. If you can solve these small problems and put their needs ahead of yours, you will get the deal.
It can be easy to get annoyed with demands and changes at the 11th hour, but this is part of the deal. Most distressed sellers are walking away from their home with nothing except maybe a few thousand dollars from their bank in limited circumstances. This is often the home that they have put their blood, sweat and tears into. They will be leaving rather abruptly with their lives possibly in disarray. Sure, you are an investor and your goal is to ultimately make money buying, selling or renting real estate, but to do that you need to think about the seller. There will always be issues that will be annoying or difficult in the process, but dealing with them is what separates those investors who get the deals and those who always seem to just miss out on them.
Different sellers can be motivated by different things. Some sellers are only looking for top dollar while others want the security of a quick, cash closing. If you can find out what their motivation is you can get to work on solving their problem. Every seller wants to feel as if they got the best possible deal for whatever situation they are in. While a distressed seller may not have much leverage they still own the property and can make some demands. These may not be realistic or even possible, but before you quickly dismiss them try to find out if they can be done. If you are the investor that can solve their problem, whatever that problem is, you will have the inside track at getting the deal. Keep the big picture in mind and not walk over the dollar to pick up the quarter.
Working with sellers requires a delicate balance of knowing what you can give the seller without giving them too much. It will not be easy all of the time, but how well you can solve these problems will define your investing business.