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.