5 Unique ways to find motivated sellers
It’s a truism of real estate investment that you make your money when you buy the property- or get it under contract, at the very least. Whether you bought the property for rental income, intended to flip it or are simply a wholesaler, the purchase price and a fast close are your most crucial concerns.
Consistently find motivated sellers with these unique techniques.
Read the obits
Don’t dismiss this source out-of-hand—no one’s suggesting you turn up at the funeral home with a ridiculously low-ball offer to buy. Instead, do a bit of research. Check the property location and research it at the registrar’s or tax assessor’s office. Do a drive-by for a quick visual check. The obituary will tell you whether there is a surviving spouse or surviving children. Your initial research will determine if the property is worth following up. Probate records can provide even more information. Make an empathetic and sensitive approach to the survivors. If you behave boorishly, be sure that word will get around.
Track down out-of-state owners
Out-of-state owners are one of the most overlooked classes of motivated sellers. Typically, they have multiple properties, vacant properties, deadbeat tenants, or a bad property manager. It’s also possible the property needs renovation. Long distance owners just might be ready to sell.
The assessor’s office can probably provide you with a sortable, digital spreadsheet, The assessor is going to charge you a nominal fee, and you may also need to pay an additional $250 – $450 per thousand addresses for a list cleaning service to confirm or track current addresses. The result is multiple properties to research and sellers to approach. List brokers are another resource; depending on your criteria, they sell for about $250 per thousand. You’ll easily recoup your investment of $1,000 or less.
Check the classifieds
Skip the Realtors’ display ads and go straight to the “For Rent” section. Make it a practice to review the classifieds regularly: Are there properties that frequently reappear? Has a rental been available for several weeks or more? “Yes” answers to those questions indicate headaches the landlord probably would be happy to get rid of. Do your homework and then contact the owner.
“For sale by owner” can be another potential source. A quick phone call will tell you if the property is worth pursuing. An owner who asks for top dollar and is sure her 40-year-old home needs no work isn’t a motivated seller—yet. Check back in six months, she might be more open to reason.
Abandoned properties have potential
Owners with an abandoned property can make exceptionally motivated sellers. The state of the property makes it obvious that the owner has insufficient financial resources to make the required improvements to sell the property. It will cost more to rehab the property, but the sales price will be that much lower.
Abandoned property lists are available or try Listingbook, but an even better resource is available. Finally, another good source is the database system Find Motivated Sellers Now, which let’s you know which properties in the county are vacant. On the other hand, you can simply drive around the neighborhood until you spot a house that appears to be abandoned. In either case, talk to the neighbors, they’ll probably be more than happy to share the backstory, possibly including the owner’s name and whereabouts. A trip to the tax assessor’s office will at least provide the owner’s last known address, as well as whether the taxes are up-to-date.
Expired MLS listings can hide gems
If you’ve built a network of real estate professional, it’s likely you know a real estate agent who will let you have a recently expired MLS list free. It’s possible you’ll have to buy the list, especially if you don’t plan to use the agent’s services. In either case, you’re looking for unsold properties for which the listing agreement has expired. Depending on the listing term—30, 90 or 120 days—the house has been on the market a while, probably with a price reduction already and it still hasn’t sold. Contact the owner and run through your screening checklist. With expensive renovations to improve salability or agent’s commission to pay, he’ll probably be open to your offer.
Cold calling for motivated sellers is time-consuming, so be sure to use direct mail, as well. The techniques above will still require due diligence and screening, but your pool of potential sellers is smaller.