Dealing in wholesale real estate is completely different from dealing with in market real estate sales, and that’s where the challenge really lies! How is someone EVER supposed to find a seller that is willing to sell at a discounted price? Why would they ever do that?
Well, it’s because there is something called a motivated seller and here are THREE ways to identify a motivated seller to help you lock up deals at a cheap enough price to wholesale to another investor, or even buy for yourself.
3 Ways To Identify A Motivated Seller
This is the #1 factor that can help you determine whether a seller will be motivated or not. Distress can be financial, it can be physical, it can be emotional etc. If the seller your speaking to is behind on their mortgage/taxes, is getting a divorce, is out of state and can’t handle the property, is too old and can’t maintain, inherited a property they don’t want, has a bad tenant in the property, is injured and can’t take care of the property, etc … then you may be speaking with a motivated seller. Ask questions on why they want to sell, so you can see if you can pinpoint their distress.
This is also extremely important and very telling. If a seller is telling you they NEED to sell in 30 days, then that should make you think for a second. Why would a seller want to sell so urgently? Well, it could be … the bank is going to foreclose on them in 30 days, they are relocating jobs and need to move quick, they can’t keep up with the taxes, the tenant who isn’t paying is bleeding them dry and more. If a seller wants to move quickly, that should be another indication for you to know you are dealing with a motivated seller.
Lastly, is price. This isn’t as big of an indicator as the first two, but can still be very telling because they all tie in together. If a seller is asking a price that is well below market value, even if it did need repairs, you should stop and think for a second. A seller may be asking a discounted price from the jump because (#2), they want to sell quickly, because (#3) they are in some sort of distress. In a case like this, you are definitely dealing with a motivated seller.
Never let things be as they seem on the surface. Always ask respectful questions, and dig a little deeper to find out the true motivation behind a seller. It helps tremendously when you’re negotiating, and can be the difference between you getting a great deal, or you letting an opportunity fly past you.
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