I’ve told a dozen of newbie investors that dealing with motivated sellers is one of the proven ways to get a property at a heavily discounted price. And, while most of them have gone away with this piece of advice, I have had many come back to me with a million dollar question – “Marko, what would be the best way to approach a motivated seller so as to net the deal?”
This is a crucial part of closing a deal. So, this week, I have decided to discuss the best way to approach motivated sellers.
To start with, success in real estate investing is about getting the motivated sellers to contact you. The reason is because when they come to you, you are in a position to ask the questions you want and asking questions is the only way to elicit information about the seller and the property holding he desires to sell.
Moving on, approaching motivated sellers is not only about how to talk to them. It has more to do with being a good listener. You cannot go to a motivated seller with a prepared script because you do not know exactly what questions will come to you from the opposite end of the table. You have to frame questions on the spot, relevant to the situation. Often, you will find the cue to your next question in the previous one’s answer and hence you should be a keen listener too.
Speaking about the questions you should put forth, you can ask questions eliciting information on property details. But the one crucial question you cannot miss asking is the reason for the urgency to sell. Many won’t tell you at the first instance and you will have to keep re framing the question in a polite manner to get the answer. The answer to this question will help you understand how motivated the seller is and devise negotiation strategies based on it. Sometimes, you need to be patient with sellers even if they are motivated because each of them comes to the table with a different reason to sell.
Now, what happens when the motivated sellers don’t contact you and you have to take the initiative to ask? You cannot sit back and wait because this way you will lose out on great opportunities. The main reason why people fumble here is because most of the motivated sellers are the family members of recently deceased homeowners or they are defaulting on payments and cannot afford the home they are currently living in. It might sound downright rude to put the question of selling the house directly to them.
If you do come across such situation, the best option would be to leave a marketing postcard informing them that you are interested in buying their home and they should contact you should they be interested in selling the home. Most often than not, you will get a call back. If you don’t, you can move on to another deal.