[ Thinking about investing in real estate? Register to attend a FREE online real estate class and learn how to get started investing in real estate. ]
If you want to be a successful real estate investor, there may be no more important skill-set than knowing how to find motivated seller leads. If there’s one area that differentiates the struggling investor from the elite redeveloper, it may not be talent, money, or personality, but rather a system for finding motivated sellers.
Without a source of motivated seller leads, you’ll waste valuable time trying to convince sellers that parting with their home is a good idea rather than working with sellers who are passionate about moving forward on a deal.
The challenge many investors have is knowing how to find seller leads that turn into assets they can market to their real estate buyers list. Once you find those real estate seller leads, how do you convert them into actual deals? (Not just contacts taking up room on your Rolodex.)
Because time is money—and speed is one of the most valuable assets an investor can have—here’s a blueprint for how to find motivated sellers in 28 days or less.
What Are Motivated Sellers?
A motivated seller is someone eager to get rid of a property in their possession. Before we jump into the strategies for finding motivated sellers, let’s take a closer look at how a motivated seller differs from other types of sellers.
A motivated seller is a property owner who will meet at least one of the following conditions:
Willing to sell the property at a very favorable price: Usually this means 10-30% below market value.
Willing to sell the property at very favorable terms: This includes things like no money down, 0% interest, financing, etc.
Ideally, you want both conditions to apply, but at least one is generally required for someone to be defined as a motivated seller. Real estate leads come in many different forms. The big advantage you have when working with motivated sellers is speed. These folks have a compelling reason to sell that property, and understanding that reason (and helping resolve it) is what makes it “possible” to find motivated seller leads in 28 days or less.
Types Of Motivated Sellers
There are a few fairly common situations where a homeowner may become motivated to sell the property on a quicker timeline. Most commonly, we see this occur when a family member unexpectedly inherits a property. These beneficiaries could be motivated to sell if the home is far from their location, in poor condition, or if they are unable to perform the necessary upkeep. In cases of an inherited home, these owners may be more likely to sell than a traditional homeowner.
Motivated sellers could also be homeowners who have fallen on hard times, and become unable to maintain their homes. This type of motivated seller is often referred to as a distressed property owner, and the home is in need of significant repair. When the repairs (and subsequent costs) add up, these owners may become highly motivated to sell the property. The same goes for owners with outstanding code violations on the property. For example, if a property violates city code for any reason and the owner is unable to maintain said property they may decide to sell.
Another fairly common type of motivated seller is an absentee owner. Absentee owners refer to homeowners who do not live in the same market as the property. This could be a result of an inherited property, as mentioned above, or it could be a rental property owner. When an owner is out of the market and wants to sell, in some cases they may be more inclined to accept a lower offer or speed up the transaction time. It all comes down to the circumstances driving them to sell, however being away from the property can make managing the sale more challenging. As a result, you may find motivated seller leads when searching for absentee owners.
How To Find Motivated Seller Leads In 5 Steps
Motivated sellers are everywhere; you just need to know how to find them. Here are some tips for how to find motivated sellers:
Find Your List: Use public records, internet research and networking to compile a list of property owners in the area.
Create Marketing Collateral: Strategize the best way to reach out to your list and draft sample messages.
Send Direct Mail: Launch a direct mail campaign (with scheduled follow ups) to your target group of property owners.
Filter Your Leads: Prepare questions for potential leads and begin pin pointing motivated sellers.
Follow Up: Schedule reminders to follow up with your motivated seller leads.
1. Find The List
As the old marketing expression goes, “The money is in the list.” And for investors wanting to boost their marketing to home sellers, it’s all about finding the right list of motivated home sellers and then sending them marketing pieces—usually in the form of direct mail—that encourage them to reach out to you or your team.
There are many different kinds of lists, but it’s usually a good idea to start with one or two and build out from there. Here are some different kinds of motivated seller lead lists you could acquire and market to:
Attorneys (Probate, divorce, estate, etc.)
People who own homes free-and-clear
Foreclosures (Both pre- and current)
Properties with liens
Homeowners in probate
Where do you purchase these targeted lists? There are many companies who specialize in this field, but some of the more common ones include: ListSource, and Z Buyer. Combine these with other segmentation filters, such as zip code or property size, and you’ll have a targeted list of potential seller leads in no time.
2. Create Your Marketing
Once you’ve got your targeted list created, it’s time to create your marketing collaterals. In most cases, this will take longer than seven days to fine-tune. For the purposes of this column, we’ll assume you can generate three key marketing pieces in a single week. And these pieces include:
Your Direct Mail Piece: the postcard, letter, lumpy mail, or brochure you’re going to send would-be sellers
Your Website Squeeze Page: Where motivated sellers, who’d like to be contacted, will visit your page and share their contact info
Your Phone Lead-Acquisition System: This can be as simple as a Google Voicemail account or as complex as a customer service team
Of the three mentioned, your direct mail piece is the most important. You can always tweak your phone scripts or your website copy as you go, but no leads will materialize unless you get your direct mail pieces connecting with would-be sellers.
It’s a bit beyond the scope of this article to delve into precise direct mail marketing strategies. Just remember that, when in doubt, try to tap into primal emotions, such as greed, guilt, or salvation, when creating your pieces. Forget boring numbers or stats. Get an emotional response first, and then back it up with logic when trying to convince sellers.
3. Send Your Direct Mail Out (Wait For A Response)
Once you have compiled a list of motivated seller leads, spring into action, and launch your initial direct mail campaign. This is the lightest week on your 28-day motivated seller lead calendar. Don’t worry, things will ramp up in week four, but this week is where you physically send out your direct mail pieces and wait for a response.
Ordinarily, it takes more than one direct mail piece to get a response from a lead. But for the sake of argument, we’ll assume your marketing message is compelling and that your list is targeted and highly motivated. A reasonable response rate for direct mail is about 4-5 percent, so if you send out 250 pieces, you can expect about 12 responses.
Note that highly personalized letters will have the best response rates. Think handwritten address on the envelope or notes written on lined paper. When composing your message, appeal to the recipient’s issues and clearly state how you will solve a problem for them. Also, be sure to invest in a “return service requested” service available with the post office. In case the homeowner moves, you will be notified of the new address.
So, how do you send your pieces out?
Well, if you’re a “solopreneur” with a tight budget, you might have to get your direct mail materials printed and fill envelopes—or mail postcards—yourself. This can be a way to go. But if you have the funds, using a company such as Modern Postcard or Printing for Less can be a great way to free you up to get ready for the next step.
4. Filter Those Leads
Once those motivated seller leads have started to call your toll-free number or visited your website, it’s time to schedule a phone call in which you find out as much as you can about the seller and the property.
This includes things like:
Why they want to sell
How long they’ve lived there
How much they’re looking to receive from the sale
Where the property is located
Who’s on the title
What improvements have been made
Your job this week is not to “sell”; your job is to listen and gather information, as well as establish rapport. The more you can help educate a home seller about how the process works and what they can expect along the way, the more they’ll remember and trust you.
5. Follow Up
Although you don’t want to inundate your leads with constant contact for fear of turning them off, one of the biggest mistakes you can make is not following up. Schedule reminders to follow up with your leads, whether with an email or a phone call. This is because it takes time to cultivate trusting relationships, and not all of your leads will feel ready to sell right away. Once you plant the seed, it might take quite some time before a lead begins to feel ready to sell. Keeping in touch with your leads will help you catch them at just the right time.
Tips For Finding Motivated Seller Leads Now
Now that we have explored how to identify and market to motivated sellers, you may be wondering how to design a strategy for finding wholesaling deals. Wholesaling is made possible when an investor identifies an off-market property that can be purchased and then resold to a second investor or buyer, all at a discounted price. Wholesaling is an excellent investing strategy, but if it were easy, everyone would be doing it. The trick of the trade is knowing how to find and market towards motivated sellers. To get started, try practicing the following methods:
Look For Distressed Properties: Purchasing and reselling off-market properties at a discount is usually made possible because the homeowner is under some distress. One of the best ways to find distressed properties is to jump in your car and drive around your local market. Note that this activity is at no cost to you. Look for homes that seem to need some attention, whether it be untamed landscaping, boarded-up windows, or perhaps appear abandoned. Once you find such a property, find the listed owner by visiting your local county records office or website and searching the address. Then, search for their contact information online.
Hop Onto Craigslist: Another effective (and free) strategy is to hunt for opportunities on Craigslist. Most investors may be unaware of how to find motivated sellers on Craigslist, but it all comes down to consistency. Investors need to regularly monitor the properties section for new deals or deals that have been available for a long time. Lastly, don’t forget to update your notification settings, so you get listing updates sent directly to your inbox.
Search For Properties On Zillow: Zillow gathers housing data straight from the MLS, making it a great place for up-to-date information on properties in the area. Surprisingly, it can also be a great place to search for motivated sellers. Learning how to find motivated sellers on Zillow is as simple as knowing what to look for. Keep an eye out for properties that have been on the market for a long time or properties that have been re-listed. These could be a sign that a seller is ready to move forward with a quick transaction, so long as you take the property off their hands.
Review Expired MLS Listings: Expired property listings can sometimes signal motivated sellers. If the property listing recently expired without selling, the owners could be waiting to re-list or even complete minor repairs to the home. This represents an opportunity for investors who are ready to make an offer on the property. Keep this in mind as you search real estate websites that pull from the MLS. While you may run into properties that are no longer for sale, you could find your next great deal.
Contact Local Attorneys: If anyone in a given town has inside information on the real estate market, it’s going to be local attorneys. Their local clientele means they know exactly which homeowners need to sell, whether that be a result of divorce, bankruptcy, or another legal reason. Try focusing your networking efforts on lawyers who work with family and real estate law, as they represent your best opportunity for finding viable leads.
Network With Inspectors: County inspectors are another group of individuals who have inside knowledge on a local area. Build relationships with city and county inspectors over time, as they work with homeowners who may have issues with their property due to un-permitted renovations, expansions, or zoning violations. In many cases, these owners could be looking to sell fast—creating the perfect opportunity for buyers.
Find Owners On Facebook: If you have an allocated marketing budget, it may be worth learning how to find motivated sellers on Facebook. By utilizing Facebook ads, you can reach a variety of users and draw in potential leads. This is a great way to send targeted marketing messages and automate your search. There are also free ways to utilize Facebook, which include starting a business page or joining real estate groups in your area.
[ Learning how to invest in real estate doesn’t have to be hard! Our online real estate investing class has everything you need to shorten the learning curve and start investing in real estate in your area. ]
Tips For Negotiating With Motivated Sellers
While intimidating at first, it can be relatively simple speaking with sellers as long as you understand their motivations. You may want to consider a motivated seller script to familiarize yourself with the process. Here are a few tips for negotiating with motivated sellers:
Identify their motivation: First, you should determine the source of the owner’s motivation to sell. The seller’s circumstances may help you navigate the negotiation process. You can do so by talking with the seller’s agent.
Present a low offer: Some motivated sellers may be willing to accept an offer lower than they originally asked for, so it can be beneficial to present a low offer. The seller can either accept or counter the offer. If they do not accept, then you can negotiate.
Wait for price reduction: If a motivated seller’s property is on the market for 30 days or more, they will often reduce the price. If you are unwilling to pay the full listing price, consider waiting for the property’s price to drop.
Determine other important factors: Sometimes, other factors may play a role in a motivated seller’s willingness to let go of their property. They may be emotionally attached to the property or concerned about the new owner’s intentions for the property’s future. Find out if the seller has any hesitations and ease their concerns to build trust and complete a successful transaction.
You’ll notice we mentioned very little about “selling” during this 4-week process. Ironically, the more you’re able to segment your list of buyers, provide them with marketing materials that speak to them on an emotional level (and promise a way out of their situation), and talk to them in a conversational manner, the more you’ll find the task of learning how to find motivated seller leads far easier than you think. (And your only real challenge will be figuring out which seller leads to choose from.)
Ready to start taking advantage of the current opportunities in the real estate market?
Click the banner below to take a 90-minute online training class and get started learning how to invest in today’s real estate market!