Motivated Seller: How to Find and Land Leads in 2022

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

Table of Contents: 

What Does Motivated Seller Mean

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.

Motivated Seller Advantages
  • Fast closing process
  • Room for negotiating
  • Possibility of seller financing
  • Opportunity to buy for less than market value

 

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.

Who Are the Most Motivated Sellers?

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:

  • Pre-Foreclosure or Foreclosure: Someone facing foreclosure may want to sell out of a need to protect their credit score. 

  • Delinquent Real Estate Taxes: If the owner has failed to pay property taxes in the past, they may not have sufficient funds up-front to pay off the delinquent tax. 

  • Property was inherited: Inherited property can elicit a motivated seller if the owner lives out of state or doesn’t care to maintain the property. 

  • Negative Cash Flow: Negative cash flow may simply be due to the seller’s particular situation (too low of a down-payment on the property, a high LTV, etc.). Properties with negative cash flow may still be worth investing in. 

  • Change in Life Circumstances: In cases of divorce or the death of a loved one, property owners may be looking for a fresh start as quickly as possible. 

  • Property Needs Too Much Work: If regular maintenance has been neglected, the property’s needs may cost too much for the property owner to afford.

  • Job Relocation: Those moving for employment reasons often have a short time to relocate, making it imperative for them to sell their property quickly.

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?

Signs of a Motivated Seller

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:

  • Home is listed as real estate owned (REO)
  • Seller emphasizes the work that needs to be done
  • Listing outright says they are a motivated seller
  • Sellers are elderly
  • Property is vacant 
  • Property is obviously not well maintained
  • Listing has expired or is near expiration on the MLS

Finding your first few motivated sellers can take some effort. However, with a little time and networking, it can be easier to spot them.

How to Find Motivated Sellers

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.

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Going through these steps takes time. Although you could make it through the whole process in a month or less, it will likely take longer to build a solid network that will point you in the direction of motivated sellers time and time again.

Motivated Seller Script

Building relationships can help you create a long-term business. Regardless of whether each deal works out, word-of-mouth is one of the most powerful tools in generating quality leads in real estate investing. 

To make it easier to create these solid relationships, follow the example script below that includes how to make an initial introduction, qualify your lead, give an offer, and follow up.

Introduction

When introducing yourself for the first time, maintain a casual tone and be personable. Ask how the seller is doing and be genuine in your conversation. If you’re cold calling, consider starting the conversation with something like this: 

“Hi, is this [PERSON’S NAME]? I’m [NAME + CREDENTIALS]. How are you?”

Aside from maintaining a friendly character, it’s vital that you listen to what the person says rather than immediately jumping into your offer. Sometimes you’ll have to find what the current or potential seller actually needs by reading between the lines. If you’re not listening to what they say, it’s almost impossible to do this – which in turn will give you less of a chance to purchase their property.

Qualifying the Lead

Next, move the conversation onto the subject of their property. Once you understand some of the person’s struggles (risk of bankruptcy, multiple liens on the property, etc.), you can then make an offer that will meet their needs. Consider asking a few of the following questions to get to know the person and their property better.

  • Are there any back taxes on the property?
  • How quickly are you looking to sell?
  • How much are you wanting to sell the property for?
  • Are there any specific maintenance issues not included in the listing?
  • Is the foundation and structure of the property in solid condition?

Getting more information about the property can also help you determine what type of loan would be best to finance the purchase. For example, if you learn that the property needs a lot of work, you may opt for a fix and flip loan. If it’s ready to become a rental property immediately after purchase, you may choose a long term rental loan instead.

Offer

Preparing an offer statement beforehand can help you sound more professional and give direction to the conversation. This statement could look something like the following: 

“I can give you an all-cash offer on the property, if the price works out. I’m willing to offer $XXX,XXX. How does that sound?”

If they reject your first offer, don’t give up straight away. Saying that your offer is too low may mean they don’t understand what they could realistically get out of the property. Or they could just be willing to wait a little longer to see if someone will pay closer to their asking price. Preparing a secondary offer and then giving the person time to think it over may give you a better chance at securing the deal.

Follow-Up

It’s unlikely that every offer you make will be accepted – especially if it’s the first one on a particular property. Following up can give you an idea of where the seller stands, while also keeping your offer on their mind long after you’ve made it. If you’re unsure where to start, read the example follow ups below. 

  • “Hi [PERSON], I’ve been looking forward to talking to you. I’m sure you have some questions about the offer we discussed, so where would you like to start?”
  • “Hi [PERSON], I’m reaching out to see if you’ve given my offer any thought since we last spoke.”
  • “Hi [PERSON], this is [YOUR NAME]. I spoke with you some time ago about purchasing your property. Do you have any questions about my offer?”

There are many ways to connect with motivated sellers. When making cold calls, following a motivated seller script can help you feel less flustered and more prepared. If you’ve chosen to focus on mail campaigns, the script may not be as necessary, but following up will be even more important.

Motivated Seller Final Thoughts

Knowing how to find motivated sellers can help you be successful when investing in real estate. To ensure the whole process – from networking to closing – runs smoothly, work with a trusted lender that can provide clear investment advice and flexible financing options.  

To maximize profits on your next real estate endeavor, reach out to Revolution Realty Capital today

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Key Takeaways

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