When it comes to investing in real estate, it’s important to know how to find motivated home sellers and understand why they need to sell. Typically, motivated sellers can be split into four categories:
- Financial Distress
- Life Changes
- Property Challenges
- Investment Liquidation
We’ll take a closer look at these categories and go over the different situations that could cause a homeowner to want to sell quickly. We’ll also look at the different resources for finding motivated seller leads. By the time you’re finished with this guide, you should have a good understanding of how to find motivated home sellers.
How to Find Motivated Home Sellers
Step 1: Understand Who They Are and Why They Want to Sell
Before you can reach out to property owners who want to sell quickly, a successful investor first understands who these potential sellers are and why they are so eager to sell their property.
As we mentioned, these people can be sorted into four different categories. But with that in mind, there’s some nuance to their situations. Let’s take a look at those first.
Group 1: Motivated Sellers in Financial Distress
When people are having money problems, they are often the most driven sellers because they need to get rid of their assets quickly to get some cash.
- Facing Foreclosure: These homeowners who are behind on their mortgage payments are at risk of losing their properties. They may or may not already be in pre-foreclosure, but either way, they typically want to sell quickly to avoid their credit taking a huge hit.
- Overwhelmed by Debt: These homeowners are usually drowning in debt, and they’re trying to sell their property as a way out. This debt could be medical debt, credit card debt, student loans, and/or personal loans. For them, they might feel like by selling their property, they’ll be able to pay off the debt and start over with a semi-fresh slate.
- Tax Liens: These homeowners are usually behind on their property taxes, and they have a limited amount of time to pay the past-due taxes before the lien (and property) is sold to the highest bidder, aka an eager real estate investor looking for a great deal.
- Bankruptcy: These homeowners have filed for bankruptcy, and selling their assets (investment properties are included in this) is part of that process. In most cases, these homeowners can keep their primary residence, depending on what type of bankruptcy they’re filing (Chapter 7 or Chapter 13), if they’re up-to-date on their mortgage payments, and how much equity they have.
Group 2: Motivated Sellers Going Through Big Life Changes
Sellers may be motivated to sell when there’s a significant life event that drastically impacts their ability or desire to keep up with their property’s upkeep.
- Divorce: Some homeowners will try to sell quickly before the divorce decree, while others are required to liquidate their shared assets for distribution. Divorce is never pleasant, and these may be some of the most motivated sellers. Just be aware that things could get heated!
- Death in the Family: This type of homeowner may be highly motivated to sell if they inherit a property that they can’t afford or simply don’t want to keep.
- Relocation: For whatever the reason, these homeowners need to sell their home quickly so that they can move elsewhere.
- Downsizing/Retirement: Whether it’s empty-nesters wanting to move out of the large family home into something smaller or seniors wanting to retire and use the proceeds from the sale, both groups are usually highly motivated to sell because they’re eager to start the next chapter of their lives.
Group 3: Motivated Sellers Experiencing Property Challenges
Some homeowners would rather sell their property quickly than put money into fixing it up or making renovations because of the problems it has.
- High Maintenance Costs: These homeowners might become overwhelmed by how much work the property needs done or by how extensive the upkeep is. They may be eager to sell quickly just to be rid of the responsibilities of owning such a property.
- Undesirable Locations: Sometimes neighborhoods change, and while a homeowner may have loved where they lived at one point, they no longer love it and want to leave. These areas could become undesirable due to a number of factors, including bad neighbors, a spike in crime, or a change in the “vibe.”
- Damaged Properties: Homeowners with distressed properties caused by natural disasters (flooding, hurricanes, tornadoes, etc.) or prolonged neglect may decide to sell because they can’t afford to (or don’t want to) pay the cost of repairs.
- Non-Performing Rental Properties: Much to our chagrin, not all investments prove to be profitable. It’s not uncommon for real estate investors to become motivated sellers if they’re not satisfied with how a particular investment is performing and they want to sell it off so they can find a property with potential higher profitability.
Group 4: Investment Liquidation
Investors make adjustments to their portfolios on a regular basis, which may result in the sale of properties.
- Need for Liquid Capital: When an investor wants to buy a property with higher earning potential, they may sell one of their current properties so they can use that cash to buy it. Of course, they may use the capital for other reasons as well.
- Changing Investment Strategies: Not all investors want to stick with one investment strategy. An investor may change their strategy, focus on a different type of investment strategy, or move to a different market. The sooner they sell, the sooner they can shift their focus.
- Cutting Losses: If an investor consistently loses money on a property, either due to prolonged vacancies, bad tenants, or a significant rise in operational costs, they often want to sell as quickly as possible to stop that loss.
Step 2: Proven Methods to Finding Motivated Sellers
New Western
At New Western, we are experts in connecting investors with the perfect investment properties. They’re practically experts at finding houses that have yet to go on the market, which typically means that the people selling them are very motivated. Among the many sorts of real estate that can be purchased at prices below market value are distressed or vacant homes, properties needing renovation, and even wholesale real estate.
New Western has a strong foothold in many markets across the United States. Which makes it an important resource for investors looking for opportunities in certain areas.
How to Use New Western As a Resource
To make the most of all that New Western has to offer, be sure to follow these steps:
- Sign Up for Access: Investors need to sign up to gain access to New Western’s exclusive listings. This process typically involves providing some information about your investment preferences and goals.
- Browse Listings: Once registered, you can browse through their inventory of properties. These listings are not available to the general public, giving you a competitive edge in finding deals.
- Receive Custom Alerts: You can set up alerts based on your investment criteria, ensuring you’re notified as soon as properties that match your preferences are listed.
- Leverage Expertise: New Western’s agents are knowledgeable about the real estate market and can provide valuable insights into each property’s potential. They can assist in making informed decisions and navigating the acquisition process.
- Networking Opportunities: Engaging with New Western can also open networking opportunities with other real estate professionals, including wholesalers, lenders, and contractors, further supporting your investment activities.
Online Resources to Use In Conjunction with New Western
Using New Western’s educational resources, along with other online sites and services, is a good way to find sellers who are ready to sell. With a mix of tools like Auction.com, Foreclosure.com, BiggerPockets, and New Western, investors can find deals on a lot of different types of homes in many regions.
There are pros and cons to each platform. For example, public sale sites offer openness and a wide range of items. Forums and groups give members information about the community and the chance to meet other people. And New Western gives members special access to deals that aren’t on the market. When you use all of these tools together, you have the best chance of finding sellers who are driven and investing in properties that fit your needs.
Remember that finding great deals isn’t the only thing that makes you successful as an investor in real estate. You also need to be good at doing your research, negotiating, and making relationships. Even though tools and systems like New Western can make these tasks a lot easier, you still need to be skilled in these areas.
Auction and Foreclosure Sites
- Auction.com: Auction.com is a site that offers a wide array of properties up for auction, including foreclosures and bank-owned homes. Users can adjust the search parameters by location, property type, or status to find potential investment opportunities.
- Foreclosure.com: Specializing in foreclosed properties, short sales, and distressed real estate, Foreclosure.com lists properties from across the United States. It’s a valuable resource for finding motivated sellers in financial distress.
- RealtyTrac: RealtyTrac provides nationwide foreclosure listings, including pre-foreclosures, auction properties, and bank-owned homes. The site also offers tools and data to analyze the potential value of these properties.
Real Estate Investment Groups and Forums
- BiggerPockets: This online community is one of the largest hubs for real estate investors. It features forums where members can share leads on motivated sellers, as well as blogs, podcasts, and guides on various aspects of real estate investing.
- LinkedIn Groups: LinkedIn hosts numerous real estate investment groups where professionals share insights, leads, and networking opportunities. Searching for groups related to real estate investment in your area can connect you with potential leads and partners.
- Facebook Groups: There are countless local and national real estate investment groups on Facebook. Joining these groups can provide access to a community of investors, some of whom may have leads on motivated sellers or may be sellers themselves.
Online Marketplaces and Listings
- Craigslist: Often overlooked, Craigslist can be a gold mine for finding motivated sellers. Homeowners sometimes post their properties for sale here to avoid realtor fees. Look for listings that indicate a need for a quick sale.
- Zillow and Trulia: While primarily used for standard property listings, both platforms can reveal potential motivated sellers through FSBO (For Sale By Owner) listings, properties with significant price reductions, or listings that have been on the market for an extended period.
- LoopNet: For those interested in commercial real estate, LoopNet is the largest online marketplace for commercial properties. Distressed listings or properties that have been on the market for a long time can indicate motivated sellers.
Subscription Services for Leads
- PropStream: This software provides detailed real estate data, including information on distressed properties, which can be invaluable in identifying motivated sellers.
- ReboGateway: ReboGateway offers a variety of leads, including those going through life events like divorce or probate—key indicators of motivated sellers.
- LeadPropeller: This service provides real estate websites geared towards attracting motivated sellers, along with SEO and marketing tools to help you capture leads.
Step 3: Giving It Your Personal Touch
The secret to success on these platforms is ongoing tracking, careful planning, and quick response. If you want to stay ahead of the competition, you’re going to have to remember to check these sites daily because many of them change their listings regularly. You could also use a mix of these tools to expand your search and improve your chances of finding motivated sellers.
While it’s true that platforms like these can generate leads, the real magic happens when you reach out to them one-on-one and work to establish relationships. To achieve your investment goals, you need to personalize your approach according to each seller’s scenario while offering them options that meet their demands.
Here’s a look at the best ways to reach out to potential sellers directly.
Local Outreach
- Driving for Dollars: Drive through neighborhoods looking for signs of an absentee owner, like unkempt yards, boarded-up windows, or for sale by owner signs.
- Community Engagement: Participate in local real estate investment groups or open houses to spread the word about your services.
Public Records and Legal Notices
- Regular Checks: Visit your local courthouse or its website to check for recent filings related to foreclosures, divorces, or estates.
- Subscription Services: Some services aggregate this information, making it easier to access and analyze.
Cold Calling
- Preparation: Use a script that empathizes with their potential situation, but be ready to veer off-script based on the conversation.
- Compliance: Ensure you’re aware of and comply with the Telephone Consumer Protection Act (TCPA) regulations.
- Follow-Up: Keep detailed records of calls and follow up periodically, as situations evolve over time.
Direct Mail Campaigns
- Targeting: Use public records to identify homeowners with delinquent taxes, pre-foreclosures, or probate (inherited properties).
- Personalization: Craft messages that address the potential seller’s specific situation, offering solutions and emphasizing quick, hassle-free sales.
- Consistency: Regularly send out mailers to keep your name top-of-mind when they decide to sell.
Digital Marketing
- Social Media Ads: Use Facebook’s or Instagram’s targeting features to reach people based on life events like relocation, divorce, or marriage; financial interests; or behaviors indicating a potential need to sell.
- Tell Those You’re Connected With: You should post to your own personal accounts that you’re looking to purchase a specific type of property. People who know you are more likely to give you a good deal or recommend you to someone they know. If you’ve acquired investment properties before, you can also post about any successful real estate investments or deals that you’ve done, and mention the type of properties you’re looking for. That way if anyone in your network has a property they’re needing to sell, or knows someone who does, they’ll hopefully remember your post and reach out to you.
Networking with Real Estate Professionals
- Build Relationships: Connect with divorce attorneys, bankruptcy lawyers, and probate attorneys who can refer clients to you.
- Real Estate Meetups and Clubs: Join local real estate investment groups to network with other investors who might have leads on motivated sellers.
- Partnerships with Agents: Some real estate agents specialize in distressed properties or have clients needing quick sales; forming partnerships can be mutually beneficial.
Final Thoughts on How to Find Motivated Home Sellers
The key to finding motivated sellers is having a sense of respect for the needs of distressed homeowners. You can’t expect to score a deal if you’re running a marketing campaign where you send junk mail to a random list of property owners. Likewise, you can’t expect a high response rate if you’re sending a personalized direct mail piece to properties with absentee homeowners.
It’s much easier to find motivated sellers when you have a target audience in mind. For example, you can look through the newspaper or an online forum for estates for sale. You could reach out to the motivated seller and say you’re a cash buyer eager to make a quick sale.
Another approach could be reaching out to city inspectors or county inspectors and asking them for a heads-up if they come across a vacant property that’s in dire need of serious TLC. You might be able to track down the absentee homeowner and make them an offer.
What’s even better is that you don’t have to pay to get quality real estate seller leads. You can get leads by making something called a bandit sign (think of those “We Buy Houses” signs). You can tailor your signs to reach a target market, like those who are trying to avoid pre-foreclosures or those who are having an estate sale because they inherited a piece of property from a deceased person.
We hope this helps you find the motivated sellers you’re looking for. If you have any further questions about finding properties in your area, you can fill out the contact form or reach out to the nearest office to you listed on our contact page.
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