Ways real estate investors can find motivated sellers
A motivated seller is a person or a company that is eager to sell a
property and willing to provide buyers with some incentives. The
incentives that a motivated seller is willing to provide include
discounting the price of the property; agreeing to flexible payment
terms; providing the buyer with the support needed to secure a mortgage
or a loan; and giving concessions on other cost items in the
transaction. A motivated seller makes a transaction easy and seamless.
With a motivated seller, it is easier to move from negotiation to
closing.
There are some people who view those who
buy from a motivated seller as people taking advantage of someone in
need. These categories of people do not see the connection between the
buyer and the seller as a win-win affair. They see it as a one-sided,
winner takes all affair; but this is not the case. Infact, if we take an
objective look at this scenario, we will discover that the buyer is
actually a God-sent to the seller. Both parties need each other and both
should benefit from the transaction.
The first place many real estate
investors look at when searching for motivated sellers is the loan
recovery section of banks and financial institutions. One of the reasons
why banks exist is to provide individuals or companies with the funds
needed to actualise their vision. These funds are provided with terms
and conditions. They are generally secured with properties. The
implication is that when a business or an individual has financial
challenges and is unable to settle their debts to the bank, one of the
ways of recovering the money is to have recourse to those properties
used as security.
Banks are very proactive in this regard
and often insist on the borrower signing off all his or her legal rights
to them before they release the funds. Once this has been done, legally
the property belongs to the bank unless the borrower pays off his or
her debt and the property is released to the owner or borrower. Due to
the technical nature of this transaction, it is always important to
involve a legal practitioner in order to seal the transaction without
leaving any unnecessary loopholes that could be exploited later.
Second, a very good place to look at
will be the various dedicated real estate magazines or special property
columns of major newspapers. While there are no statistics available to
determine the number, a significant number of sales by owners are
generally by motivated sellers. Their eagerness often leads them to find
a method of selling their property that reduces the number of middle
men. In some cases, there are motivated sellers that could be identified
by the number of real estate agents engaged to market their property.
They allow multiple real estate marketing companies to display their
banners on their property.
It is also proactive for you to do what
some real estate investors do: they simply send out a specific request
for the type of property that they need as well as the price range that
they are willing to pay. This is becoming common and is a form of
pre-screening since it communicates to the seller what you are willing
to pay. Once a seller or his or her agent contacts you, it is logical to
deduce that it means that they are willing to deal. This is what real
estate investors and agents refer to as a ‘request’.
Finally, experienced real estate
investors use a very effective method which requires more hard work and
experience. They constantly monitor their area of interest and if they
notice a rundown property, a closed down company premises, a poorly
maintained property or any other sign of distress they investigate that
property and approach the owner directly. I recollect some real estate
investors who noticed a dilapidated warehouse very close to a commercial
hub. They made a couple of enquiries in the area and eventually got the
details of the owner.
One thing is certain, everyday and for
several reasons, there are individuals or companies who want to sell
their properties as quickly as possible. If you are looking for deals
and flexible payment terms, you have to find ways of connecting with
people in this category. It is a win-win situation. They need the money
fast and you need a good deal. There are property professionals such as
lawyers and estate surveyors and valuers who are generally well
positioned to possess information about such opportunities. When money
is scarce, cash is king and there are many motivated sellers in need of
the cash who are willing to give good deals.
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