How do you find good real estate deals? There always has been – and always will be -one main source for real estate bargains. They are called motivated sellers. In fact, real estate bargains don’t stem from properties themselves; they always stem from the situation of the owner. The property many be the symptom, but the seller’s situation is the disease!
Motivated sellers are people or companies who have situations that cause them to have concerns other than getting the highest retail price for their properties. It could be that they need to sell quickly and timing is more important than price. It could be that they are completely frustrated with being a landlord and just want out of the rental business. Whatever the issue is, they are motivated to get out from under the property more than they are motivated by getting top-dollar. They are what real estate investors call “don’t wanters.”
How do you find these don’t wanters? First you have to understand the sources that causes a person to be a motivated seller. Here is a list of some of the top reasons:
Divorce – a couple facing divorce may want to break the ties much more than they want to deal with house showings, negotiations, or complicated transactions. Just getting what they can and moving on with their lives could be the solution they are hoping for.
Financial difficulty – people often run up bills they have a hard time paying. Many times they view their property as the financial parachute they need. Selling and getting the equity out of their homes can be a windfall for them. The reasons for financial difficulty are many, but often a person’s only solution other than bankruptcy is to sell their house to trim down their bills.
Facing foreclosure – people with financial trouble may find it’s the house itself that’s the source of their money problems. They may have fallen behind on their payments and are at risk of losing the home entirely to foreclosure. Purchase their house and you can help them save their credit and get rid them of the high mortgage payment that got them into that situation in the first place.
Loss of a job – yet another variation on the financial difficulty theme is loss of employment. A family who has lost a primary income may need desperately to sell their home to lower their bills, avoid foreclosure as well as perhaps seek employment elsewhere.
Relocation – a person who is transferred or otherwise moves to a new town may be saddled with two house payments, and that is a tremendous financial drain. As a buyer, you can be the solution to what is a terrible financial burden.
Frustrated investors so many inexperienced people got into the real estate game when it was a hot seller’s market. Many inexperienced folks thought real estate prices would always appreciate at double-digit rates and were not prepared when the market turned. These same people were also not prepared for being landlords or facing month after month of negative cash flow. You can help remove the anchor around their neck and secure a good deal for yourself at the same time.
Estate Sales when a person dies and someone inherits their property, they often don’t know what to do with it. Heirs are responsible for estate taxes, property taxes, property upkeep, and such. Often, they don’t even want the property, but rather the money that would stem from the sale of it.
Overburdened builders someone looking for bargain property can often find it by talking to builders who may be stretched too thin and who need to unload vacant units. If a builder is sitting on an unsold house, particularly in a completed subdivision, they are often very willing to offer huge builder discounts or offer creative terms to people who can buy them quickly because it helps them move on to the next project.
Bank Real Estate Owned (REO’s) this opportunity results from the foreclosure issue mentioned above. When a bank takes back a property in a foreclosure, they are now saddled with it. Banks don’t want the house in fact, it is considered a non-performing asset and a burden on their books. In short, they want to get that property off of their books as quickly as possible and are often willing to deal.
These are just nine of the many possible reasons that create motivated sellers. Each offers a situation in which a buyer will be in a solid position to negotiate a good deal. By understanding the situation that the person or company is in, you as a buyer have a good framework for writing an offer that could provides you with a bargain property while solving the problem of the individual who owns it.