Real estate investment can be a highly lucrative venture, especially when investors do their best to purchase properties at a discount.
However, it can be difficult finding motivated sellers when you’re just getting started in a new market.
If you’re relatively new to buy and hold properties, flipping houses, or real estate wholesale, you may not be fully aware of what a motivated seller is when compared with ordinary homeowners.
To clarify, a motivated seller is a homeowner who hopes to sell their property quickly. These sellers often prefer cash payments from direct sales between the owner and buyer (without involving an agent). Because these individuals seek to sell quickly, they’re often more willing to sell for a discount than owners who are not in a hurry.
Often, these are the most rewarding types of property acquisitions for real estate investors, but again, it can be challenging to find motivated seller leads in a given market.
Fortunately, there are seven useful steps investors can take to make finding motivated sellers relatively easy.
Follow the steps below to continuously obtain motivated seller leads so that you can expand your business and make a name for yourself in your chosen market.
7 EASIEST WAYS TO FIND MOTIVATED SELLER LEADS
#1- Explore your local area/desired area
Before trying to find motivated seller leads, you need to know where to look. Whether you plan to invest in properties close to where you live or in other states, it’s important to become familiar with the market in that area. Doing so can help you discover which areas in a given locality have the most potential for real estate leads.
#2- Find your niche
Knowing what type of properties you plan to invest in can help narrow down your list of potential leads. This way, you’ll be applying your time and effort to obtaining properties that fit your interests.
Having a real estate niche can also help you make a name for yourself in real estate investing. When you work with specific types of real estate in an area, locals and businesses become familiar with you.
It’s okay to eventually work with all property types, but if you’re just beginning your investment journey, it will be beneficial to have a niche. Do you want to invest in single-family homes, small apartment buildings, commercial real estate, or even townhouses?
#3- Build a list of motivated seller leads
Finding high-quality sources can be one of the hardest parts of locating motivated seller leads. Fortunately, there are several areas to explore to determine how to find motivated sellers online and in person.
VISIT SELLING WEBSITES
Take a look at FSBO listings on Craigslist or other sites that allow individuals to sell items and properties. Many people choose to forego the traditional selling route and may instead list their home for sale online.
VIEW MLS LISTINGS
Motivated home seller leads might choose to list their properties through a real estate agent, assuming that this move will lead to the fastest sale. If you notice properties that have been listed for a considerable length of time, the seller may be more motivated to sell than they were when they first listed.
KEEP AN EYE OPEN
If you’re driving around in your chosen market, look for either vacant or distressed properties. Usually, when someone no longer lives in their home and it’s too difficult to repair, they’re interested in selling. Properties that sit vacant still cost the owner money, which means that they will likely be looking for an easy way to get rid of the burden.
SPEAK TO OTHER PROFESSIONALS IN THE AREA
Real estate agents, lead providing specialists, plumbers, inspectors, and appraisers tend to visit a great deal of homes in their day-to-day work. In meeting owners and discussing issues with a home, they may gather useful information about people who are interested in selling their homes.
TRY COURTS OR ATTORNEYS
Attorneys and courthouses have a lot of information to share when it comes to potential motivated sellers. A local attorney will likely be aware of who has to sell property due to a divorce or bankruptcy. Courthouses will have lists of delinquent taxes on local properties. Motivated seller leads facing legal issues are often willing to sell properties for a discount in an effort to find relief.
#4- Categorize your leads
Once you have developed a long list of potential motivated seller leads, it’s a good idea to categorize them. By sorting them into categories, you can cater your approach to suit individuals who are in a variety of situations. For example, homeowners who are behind on their taxes may not respond well to the same pitch you use for out-of-state homeowners.
Possible categories may include:
- Vacant property owners
- Out-of-state owners
- Owners with delinquent taxes
- Owners facing divorce or foreclosure
- Owners of distressed properties
#5- Create marketing content to attract motivated sellers
Determine how you plan to reach your motivated seller leads. The way you market yourself is important, so be sure that your ads are respectful yet enticing for motivated seller leads who may be interested in selling. You want to reach as many valid leads as possible, but on top of getting them to notice you, you want them to see you as professional and trustworthy.
Consider advertising in the following ways:
- Reaching out to motivated seller leads on Craigslist, either directly or by posting ads that announce your services to the public. Doing both will not only get you in contact with active sellers, but will also encourage people to keep you in mind if they plan to sell in the future.
- Post on social media. The great thing about social media is that millions of people use each platform every day. Even if the people who see your ads are not necessarily interested in selling their homes, they will likely know someone who is. Additionally, you’re free to look through all sorts of selling pages on different platforms, which can allow you to network with plenty of motivated home seller leads.
- Send direct mail. This is especially useful if you plan on buying homes in a market close to where you live. Create eye-catching flyers that let homeowners know that selling to you is a great choice.
It’s also a good idea to keep track of which advertising methods show the most promise. This way, you can dedicate more time to ventures that get decent results.
#6- Know how to negotiate
Part of being a successful real estate investor involves knowing how much money to invest in a property. If the property is outdated and distressed, you want to be able to purchase it for a price low enough to still make a profit after making repairs. This way, you can take your profits and move onto your next investment.
If you’re approaching a deal with a motivated seller in real estate, you need to be able to effectively negotiate. When the price of the home is too high to fit your current budget, there are several ways to negotiate for a lower sale price.
- Make a lower offer. Sometimes a motivated seller lead will be willing to accept an offer that’s lower than the asking price. It can’t hurt to ask, when asking is phrased correctly.
- Know what motivates the seller. If you know why a homeowner is trying to sell, you can better formulate your approach. If you’re aware that the seller has a timeline to sell, for example, you can make appropriate offers as the due date approaches.
- Take your time. Sometimes the seller will reduce the price of the home on their own. This usually happens after a property has sat on the market for greater than 30 days without an offer.
#7- Reach out to a professional network
If you’re struggling to find motivated seller leads despite putting your best efforts into your pursuit, you may want to contact a professional real estate lead resource. A reputable lead sourcing company can help real estate investors continuously find quality real estate leads in their area.
By contacting a lead-providing resource, some of the hard work is already done for you. Companies that provide high-quality leads have already done the searching, so contacting motivated sellers becomes a smoother, simpler process.
Though as an investor, it’s important to work toward building your own lead locating system, it’s a good idea to seek assistance wherever possible.
Each lead you’re provided could result in a highly profitable sale, so every resource matters when locating quality leads.
Finding motivated sellers and real estate leads becomes easier with practice. As an investor becomes more familiar with their chosen market, the process of finding motivated sellers in real estate gradually becomes perfected. When investors are able to determine which approaches work and which need changes, the investor can alter techniques to better fit the unique aspects of their locality.
Knowing how to find motivated sellers is the key to getting to know the sellers themselves. The more an investor interacts with motivated seller leads, the more he or she becomes familiar with the motives behind a homeowner’s need to sell quickly. This knowledge helps immensely when it comes to relating to your real estate leads.
Familiarity with your local market and a personable approach will make it easier for motivated seller leads to trust your business and consider selling their homes to you instead of a competing investor.
Motivated sellers in real estate are a highly valuable factor in operating a successful investing business. Taking the time to reach out to them through social media, sale sites, direct mail, or in person will not only help you purchase properties, but will also improve your networking in the local area.