Signs of a Motivated Seller

by : Charles W. Moore

As a creative real estate investor, it is essential that you expend only the money necessary to invest in real estate property, and that means finding good deals and working with individuals who will agree to your terms. Finding motivated sellers is crucial to your success in this matter, since a motivated seller will be less demanding and more likely to conform to your less than traditional methods of purchasing the home. How can you identify a motivated seller from the average individual looking to sell a home?

First of all, avoid any homes that are being sold through a real estate agency. Individuals who are paying a real estate agency commission to sell their home and are demanding a certain price through the agent are not motivated sellers. Rather, look for homes that are for sale by owner. Many of these individuals have either already tried selling through an agent and failed or cannot afford the fees involved in hiring one and need to sell quickly for the best possible price. They will be more likely to work with you on the terms you put forth.

Do not look for houses in bad markets or old houses; chances are, these sellers want to move out of a less than savory neighborhood or have damage to the home that would require costly repairs, these are not the type of investment homes that you want. The reasons behind a sale by a motivated seller vary, but most have to get out from under a mortgage on a newer home in a nice neighborhood and have little or no equity in their home with which to work.

The best way to determine if you have a motivated seller is simply to ask. When you go to view a home that is for sale by owner, have them give you a tour of the house and ask the simple but pleasant question, "Why are you selling such a lovely house?" The response will tell you whether or not the person is a motivated seller. Perhaps they are behind on their taxes or lost their job and need to sell to try to catch up. Maybe they have large medical bills from an accident or illness and need to start over with something less expensive in order to work in that bill. Often, you will find someone in the middle of a divorce who wants the house taken off their hands at the lowest possible cost so that they can end the proceedings quickly.

These are by far not the only reasons a motivated seller looks to sell their real estate property. However, as a savvy creative real estate investor, you can see what types of problems can motivate a person to sell their home and work with you on a lease purchase option. Your job as the investor is to also investigate and find out why they are motivated so that you can be clear on how well you'll be able to influence them to work with you on a creative financial option that will release them from their obligation as the homeowner, allow you to invest for hardly any money up front, and get a tenant buyer into the house quickly so that you help another individual get a fresh start while you begin profiting.