Picture this: You’ve applied for financing through a trusted lender. Once approved, you connect with a recently divorced woman looking to sell her property as quickly as possible because she’s buying a home elsewhere. You offer seller financing at a price below asking and she immediately accepts.
Sounds too good to be true, right? But actually, finding motivated sellers like the one in the example above is completely possible. And there may be more out there than you think.
Video by FortuneBuilders
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A motivated seller is a real estate property owner who needs (rather than wants) to sell their property. This is likely due to life circumstances changing – such as a divorce or death of a loved one – or unforeseen financial challenges.
In 2021, over 400,000 people filed for bankruptcy and over 600,000 people got divorced. With just these two statistics, even if only 20% owned property (although this percentage is likely closer to 60%), that’s still 200,000 people across the United States that may be looking for someone to buy their property.
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While every property owner is motivated to sell for different reasons, “motivated sellers” are more likely to accept offers below the list price in order to sell fast. They are also typically more open to negotiating the terms of the purchase.
Motivated sellers come with a wide range of expectations. However, they do have one thing in common – they need to sell their property fast, and by (almost) whatever means necessary. This gives you, as the potential buyer, a leg-up in the negotiations.
Before sending in an offer, make sure you have a basic idea of what will catch the seller’s eye. You can do that by knowing why they are a motivated seller to begin with. These reasons could include any of the following:
Now you know some of the most common reasons sellers have for selling their property quickly. But how do you know where to find motivated home sellers?
Recognizing a motivated seller is the first step to securing a lead as a real estate investor. Sellers in need of separating themselves from their property will often leave a few key hints – making it easier to spot them. Some of these include:
Finding your first few motivated sellers can take some effort. However, with a little time and networking, it can be easier to spot them.
Sometimes motivated sellers provide clear hints that they need their property sold quickly. Other times, potential motivated sellers aren’t sure of the best way to get out of their current situation. In these instances, they may need a little push in the right direction. Either way, use the steps below as a guide on how to find motivated sellers.
Step 1: Create a list of property owners.
To find property owners for your motivated seller leads list, you can search public records, respond to "For Sale By Owner" signs, or locate properties with liens.
Step 2: Market to your list.
If you have the financial resources, using targeted ads on social media is a quick way to find motivated sellers. However, you can also cold call and use mail marketing to notify owners of your interest in their property.
Step 3: Build relationships.
To start building your network, reach out to local attorneys and real estate agents who may be involved with current and future motivated sellers. Inform them about your previous experience with real estate and ways you can meet the needs of certain types of sellers.
Building relationships with property owners in the area can also help keep you informed on property getting ready to hit the market. Promote your services to these owners but don’t give up entirely if they aren’t ready to sell. If you build a relationship with them, they may come to you first when they are ready to part with their property.
Step 4: Prioritize your list.
Creating a prioritization list can steer you towards properties you’ll be able to purchase in a short time frame. By marketing first to motivated sellers with property already on the market, you could secure a property quicker than if you only reached out to off-market properties.
Within your prioritization list, you should also emphasize offers that speak to the needs of the motivated seller. Offering seller financing may be perfect for someone selling due to divorce – and without much need for a bulk sum of financial capital – but may not be so beneficial for someone short on funds and facing potential bankruptcy.
Step 5: Close the deal and finance the purchase.
Before securing the deal, ensure you have a trusted lender to support your own needs through the purchase process. Making Revolution Realty Capital your partner can give you flexible funding in 42 states, a 10 day or less closing period, and over 40 years of experience in the industry.