Motivated sellers are one of the driving forces in today’s real estate market and are essential for wholesaling real estate investing businesses to do what they do.
It helps to have a targeted list of property owner categories known to retail buyers as having great potential for profitable deals. To real estate investors, motivated seller lead lists are a golden ticket.
We have put together an overview of eight search categories that are sure to generate real estate leads for wholesalers looking to find a great deal that they can flip and sell quickly.
What Is a Motivated Seller?
A motivated seller is exactly what it says on the tin: someone with an urgent incentive to sell their property. They come from various walks of life but ultimately want and need the same thing- financial freedom from their property- and fast!
Many owners may not be able to sell their property to traditional buyers through normal real estate deals, either due to lack of time or money or the property’s condition.
Why Are They Important to Wholesale Real Estate Investors?
Finding motivated sellers is essential for wholesalers because they need property owners that, above all, want to start selling their house quickly, even if it means receiving below the market value at the end of the deal.
Highly motivated sellers may not have the option to pursue the property’s worth, so must settle for less favorable terms.
Eight Motivated Sellers to Look For
The motivating factor that drives a person to sell a property can be many things, but some are more urgent than others. Real estate investors make their money by flipping properties for profits, so they need to find a motivated seller willing to accept a below-market offer.
Here are eight motivated seller leads worth pursuing in wholesale real estate investing.
Owners of Distressed Properties that Can’t Sell at Market Value
Distressed properties are where many wholesale real estate investing companies specialize due to how easy it is to buy them at a low cost. Code violations, damages, extensive repair requirements, and other distressing factors are not something most owners- or most buyers- want to deal with.
However, there is a market for cash buyers who actively look for this type of property to renovate and sell for a huge profit. This buyer profile is a great resource for wholesaling agents because they often buy houses outright.
Additionally, the seller most likely wants it off their hands and, with the right persuasion and negotiating techniques, may let it go at a reasonable cost.
Property Owners in Financial Distress
Owners facing foreclosure due to financial troubles and debts owed on the property are prime motivated seller leads.
During the pre-foreclosure period, owners tend to search for ways to pay off the debt owed rather than have their property repossessed and lose everything.
Selling the house may not be what everyone wants to do, especially if it is their primary residence or has sentimental value, but it may be the only option.
A real estate investor can help someone in this situation to sell the house and salvage some funds rather than have the bank take it away for nothing.
It seems like a tough group to prey on, but there are many advantages for the agents, seller, and buyer in a case like this.
Heirs (People who Inherited a House)
This type of lead is so promising that it even has a special name. Probate leads is the name given to those who inherit property from a family that they don’t want to keep.
Sometimes a property is inherited by multiple heirs who cannot agree on what to do. It must be sold and the shares divided. Usually, the heirs in question want to see the funds as soon as possible, so are inclined to go through a real estate investor that can speed up the process.
It can also happen where a sole heir inherits a house, but either cannot afford the upkeep or does not want to take on the responsibility. They may not live locally or have time to look after it, so they would prefer to have it sold sooner rather than later.
Absentee owner leads are another pathway to great deals and profits. Vacant properties with an absent owner can quickly become rundown and distressed, so it is in people’s best interest to rent them or sell them. Some areas do not have a strong local market for rental property. The owner may have a money pit on their hands.
Compiling absentee owner lists is an intelligent move for wholesalers as it helps to track the activity of a property.
Follow-up is especially important here as the absentee owners may be holding out for a change in circumstances. If nothing has changed after six or seven conversations over a year, you could be on to a winner.
Couples buy properties together when things are good, then don’t know (or can’t agree) what to do with it when it all goes south. Properties are often sold off during divorce proceedings because no other legal arrangement is possible, which is sad for love but good for savvy wholesalers.
Your response rate to these leads must be fast, as a lawyer is often involved and may have a contact of their own. Furthermore, building business relationships with divorce lawyers can give you the edge over the many companies that may compete for the deal.
Rent Ads Property Management Companies
Companies who manage houses for others are clear motivated sellers because they want to shift properties and get their commissions. Often when a person leaves the handling of their house to a management company, they do not possibly have the time to be actively involved in any part of the sales process.
Because of this, it is easier to push for below value in the form of wholesale real estate. The manager is not emotionally invested, and the owner is not around.
By the same token, rent ads usually suggest somebody has an empty house and needs money, making them a prime candidate for wholesaling. Make sure you add these contacts to your direct mail list!
Those Whose Employment Status has Recently Changed
Getting a new job in a new town is exciting, but it can put people under financial strain if they are tied to property elsewhere.
The process of going through multiple listing services, arranging open houses, waiting for an interested buyer, and going back and forth on a deal takes time, which this type of seller may not have.
Additionally, a person who has become unemployed or has changed career and now earns less money may need to downsize as soon as possible. Yet again, time is of the essence, as property costs can quickly drain savings if no new income is there to replenish them.
Banks or Investors Holding REOs (Real Estate Owned Properties)
When the owner fails to keep up with property taxes or mortgage payments, the bank may repossess their property to recoup the costs. Foreclosure transfers the ownership rights over to the bank or other investing authority.
Of course, the bank does not want to keep the house- it wants to get its money back. To do so, they sell or auction off the house. Unfortunately for the bank, they don’t always go, leaving them short.
Vacant properties held by the bank are a worthwhile lead for real estate wholesalers. Because the sale is more important than the amount, you can potentially turn a decent profit.
How to Find Motivated Sellers
Finding motivated seller leads is all about paying attention to detail and keeping your response rates sharp. You can find leads anywhere, but to find motivated sellers you must look in the right places.
Public records hold a wealth of information about investment properties in the area and the circumstances surrounding them. You can access the public record in the local courthouse with very little trouble.
Get in touch with attorneys and local banks to build working relationships. If they know you, they are more likely to come to you first with an opportunity. You should also consider speaking with housing inspectors from the city council and private companies.
Furthermore, you can find contact info through using a skip trace- one of the most popular methods used these days.
Browse through multiple listing service sites to look for interesting properties, and always be on the lookout. Drive around town to look for any obvious opportunities to flip and arrange visits to potential sites.
Marketing to Motivated Sellers
When you find motivated sellers, the next step is marketing. The biggest part of your job is to get them on board with your proposal and help them see why it is the best option.
Initial communication may come from a face-to-face conversation in some cases if you work in a smaller area, but usually, the best course of action is via a direct mail campaign. Sending marketing materials through direct mail to homeowners is a great way to be seen and heard, and to boost your overall response rate.
Building a strong online presence through your website, targeted Facebook ads, and other digital marketing techniques helps to ensure visibility and get your brand out there.
From absentee owners to well-oiled management companies, there are plenty of motivated sellers out there.
Finding the best contacts can take a wholesaling business to the next level and make them stand out from the crowd. These eight types of motivated sellers could bring all sorts of possibilities to a determined agent.