5 Clues to Recognize Motivated Sellers for Real Estate Investing

by : Peter Conti

You're probably familiar with the cliche that real estate is all about 'location, location, location.' Of course there's some truth in it. But the entire picture from an investors point of view is a bit different.

The rest of that picture is...'motivation, motivation, motivation.'

What are the reasons why the seller wants to sell the property? And there are always perceived options for the seller. Also consider any time constraints the seller is facing.

A motivated seller's only goal is to be rid of the property. And always know this one thing about these special sellers...

They've always existed and they always will. There's always a certain percentage of highly motivated sellers in any market. Understand that almost all motivated sellers are created by personal reasons.

And this ever-present group of sellers offers opportunities for real estate investors.

As an investor one of your goals is find out the truth about the seller, the property, and why that property is on the market. Discovering the truth will help you find out if a seller is motivated and the intensity of it.

In my experience I've noticed definite patterns that occur over and over. Here are just five you'll learn about today...

1.There's always a surprising number of people who are faced with relocation. This number is likely to keep increasing due to our highly mobile society and the greater number of career changes people experience.

When a seller has difficulty selling the property there are several possibilities. The potential of having two payments. Or having to manage the property as a long distance rental.

Also this situation introduces an element of time pressure to sell the house.

2.A very common situation concerns financial difficulties. And the seller is looking at foreclosure or quickly finding a buyer. Again there are extra elements such as obvious time pressure to find a solution. The creative investor will be able to help.

You'll provide immediate relief and help protect the seller's credit standing. This is truly a win-win situation for both investor and property owner.

3.Tenant problems offer the investor an excellent avenue for finding motivated sellers. Landlords are very good motivated sellers for several reasons.

They are used to the lease process and are comfortable with it. So they tend to be least intimidated with the property transfer. Most landlords don't live in the rental units. They have a primary residence somewhere else. So they have equity in their primary and won't need it for another purchase.

All in all they're more disposed to being rid of all the tenant and landlord hassles. That will make your job easier as an investor.

4.Divorce and relationship problems cause many people to become highly motivated sellers. Usually the property is too much for one party to handle. The property becomes the best way to divide assets. And both parties involved are eager for a fresh start somewhere else.

As an investor you'll offer a much-wanted solution to give two people something they want very much.

5.Many people suddenly find themselves in a situation where they'll be inheriting property. It's usually a single-family home. And the legal processes for this inheritance and transfer can be stressful. Not to mention what will the seller do now with this property?

Quite often the seller merely wants to unload it and be done with it. There's also a psychological element to this.

It's often easier to get great terms on these properties because the seller has little to no emotional attachment. The seller didn't buy the property, so there's often less of a degree of resistance on the sellers part.

This is a great area for real estate investors for finding motivated sellers as well as great profit potential.

These are just 5 common situations that thousands of people find themselves in every day. But you still need to develop a rapport with sellers in order to discover the real reasons for selling. Don't count on the seller to just open up and tell you everything right away.

Establish a degree of trust with the seller and your work is almost half done. If it's a good deal for both of you, then settle on terms and you've acquired another property.