The True Impact Of Motivated Sellers In Real Estate Deals


Motivated sellers in real estate deals may represent the epitome of a perfect lead. Appropriately dubbed, motivated sellers are just that: motivated. At the very least, they are most likely looking to sell a property in a timely fashion, and for less money might I add. However, it’s not out of the realm of possibility for the seller’s motivation to play a very important role in a respective deal. The true impact of motivated sellers in real estate is much more resounding than many may even realize. As an investor, it’s in your best interest to harness their motivation and use it to the advantage of each party involved.

While it’s rare that a seller’s current financial situation will have a significant impact on the price of a home, it is entirely possible for them to concede thousands of dollars in an attempt to get a deal done sooner rather than later. However, the extent in which they are willing to discount a property is typically contingent on their particular motivation. That said, it’s impossible to know how much motivated sellers in real estate deals are willing to knock off of the price until you can determine the exact reason they are selling.

Let’s take a look at three of the most common motivated seller leads in real estate, and determine what impact — if any — their intentions have on the price of the home:

Motivated Sellers In Real Estate

Motivated sellers

Sellers Looking To Relocate

It’s not uncommon for someone to buy a home before they have resolved their current living situation; it happens more than you might think. However, those that choose to go this route are under increased pressure to sell their current home, as the impending threat of paying two mortgages is a very real possibility. That said, you will come across many motivated sellers in real estate deals that are looking to facilitate a timely transaction for the sole purposes of avoiding taking on a second mortgage.

It is important to note, however, that the level of motivation increases with each passing day. The longer a homeowner goes without selling a property before they move into their next one, the more inclined they will be to discount their home. If for nothing else, absorbing the costs associated with two mortgages is not something the average person can handle. It is, therefore, entirely possible that said owners will be willing to knock a few thousand dollars of the listing price.

Sellers Facing A Personal Issue

As the name suggests, a motivated seller is someone that is being pressured by what can only be described as subsequent factors. However, those factors can vary dramatically between homeowners, and personal circumstances are no exception. It is entirely possible for a homeowner’s motivation to sell to increase based solely on what is happening in their personal life. Not unlike the other sellers I reference in this article, these homeowners are just as likely to want to sell sooner rather than later for any number of reasons. While unfortunate; divorce, the untimely passing of a loved one, probate, or something to a similar affect can all motivate a homeowner to sell rather unexpectedly.

While sellers facing a personal issue may want to sell quickly, they may not be as willing to accept a lowball offer. Of course, the asking price is contingent on their particular situation, but in my experience, these motivated sellers are sometimes slightly less motivated than those that are truly distressed. As a result, your offer will need to be reflective of their situation.

As always, in working with a motivated seller, find out what it is they really want out of a sale. If you can determine their true motivation, it will make it a lot easier to determine a sound offer. Just know that these sellers may not be in as dire of a situation as the next example.

Sellers At Risk Of Foreclosure

Motivated sellers that are facing a foreclosure are less prominent now than they were at the depths of the latest recession, but they are nonetheless a viable source of deals for savvy real estate investors in today’s market.

While motivated sellers facing a foreclosure are historically recognized as a great source of leads, they are in no way to be handled in a similar fashion as those I previously discussed. If for nothing else, motivated sellers facing a foreclosure are in a much more precarious position than those that need to sell for personal reasons. That said, it is their current situation that makes dealing with distressed homeowners an entirely different animal altogether.

Truly distressed homeowners desperately need to sell their property, which means you may be able to get a good deal. However, those at risk of foreclosure may be the most difficult to deal with, given their current situation. As such, I recommend approaching them on a more personal level. Don’t hesitate to make the deal more about them than yourself. In fact, I maintain that the only way an investor can close a deal with motivated sellers in real estate is by creating a genuine relationship with said individual. Only once you have their trust can you really begin to make headway on a respective deal.

In establishing trust, get to know the owner. Find out what it is they truly need out of a deal. You may be surprised to learn that money isn’t the most important factor, but rather closing real estate deals in a shorter period, or something else altogether. You will never know what they really want until you talk with them. Once you determine what it is they want, do the best you can to meet in the middle. Be sure to let them know you are doing your best to help, but don’t hesitate to let them know of the risk you are taking on; be as transparent as possible.

With the right foundation laid out, you may be able to procure a deal with impressive spreads, and perhaps even more importantly, you maybe able to help a distressed homeowner out of a dire situation.

The true impact of motivated sellers in real estate deals can’t be underestimated. If for nothing else, their decisions dictate how and if a transaction will even take place. That said, the more you can familiarize yourself with a motivated seller, the more likely you are to close a deal that makes both sides happy. The next time you are working with motivated sellers in real estate, be sure to keep this in mind.