How To Find Motivated Sellers
How To Find Motivated Sellers
I’m always being asked how to find motivated sellers. As a Property Sourcer, it’s the first bit of the business that you have to learn if you want to be successful.
So What’s a Motivated Seller ?
A motivated seller is a person who needs to sell their property (now it may be that they are also motivated to rent their property to you – we’ll talk about that later.
There’s really on four reasons why a person may be in this situation.
We call the “The Four D’s” :
It could be that a parent or grandparent has passed away and so the the house is passed into the estate. If there are children involved (usually grown, but not always) then this can become a bone of contention as they can’t all live in the house. Some may want to keep it, whilst others may want to sell it. Obviously you can’t split a house in different parts, so in order to get access to the cash, they will need to sell. They could of course go down the estate agent route, but this can take time, it can fall through, and it could be that they just need this to be done quickly.
When a marriage breaks down, or any other relationship for that matter, the house, inevitably sometimes, becomes a battle ground. In fact the best deal I ever had was a 48% off the market value deal. I mean, these two were just tearing clumps out of each other. I reckon they would have possibly killed one another unless we had stepped in and got the deal done. We actually managed to compete on this property in JUST 7 DAYS. Any longer and it may have fallen through. I mean when I say these two hated each other, it was with a vengeance. So we managed to get the deal cheap, ended up probably saving a life (!) and allowed both parties to move on with their own lives. (phew!)
It’s a shame that people aren’t taught properly about money in schools. The problem being of course that the people teaching this stuff don’t know what they’re doing either and they have credit card debts, and loans hanging over their head. Hardly in a position to teach others. But people seem to spend more than they earn. And it can;t go on forever. So it usually catches up with them and they may need to sell the house off in order to pay their debtors down.One of the fundamental questions we always ask when dealing with a motivated or distressed seller is ‘how much other debt do you have that needs to be paid down’ so that we can incorporate those numbers in to our offer. There’s no point in us buying their property, only to find their debt problem still exists – that was the sole reason for them selling in the first place and so we have a moral and ethic duty to help them.
Or Emigration. It could be that they are moving overseas (i mean .. we did – but wek kept a house in the UK so that I have a place to come back to when I fly over to see the kids every two weeks – but not everyone can do that of course). It could also be that they are moving to say, Australia, but would like to keep the home in the UK just in case it doesnt work out, or to leave it to their children later on in life. This type of situation would bode well for a rent to rent, whereby you rent the property for say 10 years on a guaranteed rental amount, and then hand it back over to them in 10 years.The beauty of this type of deal is that you get access to the motivated sellers asset for 10 years (and technically they’re not sellers anyway) but then you can rent it and then just simply hand it back at the end of the term. You need to ensure that it’s kept in a reasonable state of cours
So, How To Find Motivated Sellers?
Well, they’re everywhere, but the key is for you to attract each of these 4 different types of ‘avatar’ with your marketing.
Look, there’s no point in marketing with a leaflet that talks about Divorce and the person is dealing with a debt issue. It’s ‘talking the wrong language’ to them.
Likewise, there’s no point in talking about Debt when they’re going through a divorce, although, obviously these two issues might be connected.
But you have to match up your marketing to the situation that the parties are going through.
Does this mean 4 types of leaflet ?
Well, yes is the short answer. You could of course just list each of the four and hope it applies. (By the way, don’t put ‘death’ on a leaflet – someone who is actually going through that will find it rather insulting have just lost their loved one)
What you’re actually best doing is having a leaflet for each ‘avatar’, and then going into detail about how you can help solve that specific persons problem (be it debt, divorce, etc)
Obviously this is more expensive to run, but it is more effective.
If you want to learn more about ‘Avatars, then these podcasts by Mark Donnan are awesome :
They’re quite long, so we split them in two – if you subscribe then you can download them to your phone
|Mark Donnan Talks Marketing and getting into your customers head.|
|The podcast page is here|
You may be asking yourself what has this got to do with ‘How to find motivated sellers’?
But the point is this.
This is a business. Like any other business. And like any other business, it relies on you understanding what makes people tick, and what will make them do business with you.
one thing that has worked well is leaflet drops. But you need to be dropping a LOT of leaflets. If you’re dropping 400 leaflets by hand yourself, let me tell you, it’s highly unlikley that you will get a deal off that. I mean, you might, right? But the odds are definitely not in your favour. And this is the key, to move the odds more into your favour.
The more leaflets you drop, the more chances yo have of generating a phone call.
If you would like to know how to create your own leafleting company, then this Property Podcast can help :
Listen Now by Clicking Play
|In this episode, I delve into one of the strategies I used to generate new fresh leads for both my lettings agency, and my Property Buying business.|
Bandit boards still work. I’ve spoken with enough people who still use them, although it is moving right up to that line where if you cross it, you’re breaking the law. I personally don’t use them anymore, it’s very time consuming, and you can get a some abuse from the too, both from passers by, and from your local council, so you have to stay one step in front of them.
For me though, it’s just so time consuming having to put them up, and take them down again, especially as I live overseas. I have better things to do with my time that chase these around !
But they STILL CLOSE BUSINESS, so it’s your choice.
How To Find Motivated Sellers Using Adverts (Online & Newspaper)
People place adverts in the back of newspapers and online. So responding to these advertisers can be a way to find motivated sellers. You can both place the advert, and respond to other peoples adverts. The specific method for doing this is important, as you could just end up alienating the very people you’re trying to reach out to.
HMO Owners Lists
So your local council will publish online (free of charge and accessible) a list of all those people who have a HMO License. Right now, at the time of this article, it also shows when the license is due for renewal. So if you look at those where it’s due for renewal and contact the landlords, it could be that they can’t be bothered to renew. So they may be open to selling, or the may be open to a rent to rent deal where you manage it on their behalf whilst giving guaranteed rent.
Now Choose One
Again, it’s the method that you use to make contact that’s important.
So these are just a few. And to be honest, you don’t even need more. YOu just need to find ONE that will work really well for you and tie in to your lifestyle. So for example, the banner boards for me are no longer viable as they take too much time.
However leaflets drops I can manage from here in Spain, and the adverts strategy I can easily do here in Spain.
So really it’s about whatever works well for you.
Video – How To Become A Property Sourcer
If you want more information about what’s needed to become a property Sourcer, then this YouTube Video is great viewing too. The video also has extra information about how to find motivated sellers.
So hopefully, in this article, you now know hot to find motivated sellers. There are references to podcasts I recommend you should listen to, and a video too.
Now, if you want more help from a Property Coach who regularly shows people how to find these deals, then fill in this form.