The ability to find motivated sellers is very important for success in real estate investment. With this skill, you will avoid wasting lots of time and energy negotiating a favorable price with a property owner.
So, What Is a Motivated Seller?
As the name suggests, a ‘motivated seller’ in real estate is simply someone that is desperate to get rid of a home in their possession. When a property owner is motivated, they are willing to sell at a price way below market value or offer flexible terms such as 0% interest or no money down.
Who are the most motivated sellers in the real estate market? The most motivated seller leads are people who are dealing with one or more of the following situations:
- Divorce – People are usually very motivated to sell their homes before, during or after a divorce.
- Job relocation – This could be due to getting a new job, relocation by an employer or losing a job.
- Physically distressed property – Property could be distressed due to flooding, fire, vandalism, storm damage or deferred maintenance. Many property owners can’t afford to fix or cover accumulated violations, bills, fines, and costs.
Related: 10 Best Tips for Buying Distressed Property
- Estate inheritance – When someone doesn’t want to keep an inherited property, they will be motivated to sell quickly.
- Foreclosure – This is one of the most common reasons for motivated sellers. Foreclosure happens due to missed mortgage payments, property tax delinquency, fraud, code violations, and even income tax problems.
- Tax law changes – When tax laws change, property owners might want to sell quickly to avoid paying higher liabilities.
Related: Real Estate Taxes: Everything a Beginner Investor Needs to Know
How to Find Motivated Sellers
Here is how to find motivated sellers in the US housing market 2020:
1. Visit the county offices
Every property owner in the United States is required to pay annual taxes for any rental property or home they own. These taxes are paid to the county, township or city in which they reside.
For a county, township or city to charge property taxes, they need to have detailed information of every home under their jurisdiction. This includes details such as:
- Who owns the home
- When they bought the home
- How much they paid for it
- How much they owe in taxes
Since this info is in the public domain, you can find data on any home in the US housing market 2020 if you look in the right places.
When homeowners default on taxes, they will be placed on lists such as:
- Delinquent tax roll
- Tax delinquent list
- Tax forfeiture list
- Tax assessor’s roll
You can visit the county offices or website to get accurate information about who is in the delinquent tax lists. Reach out to such motivated real estate sellers and let them know that you are interested in purchasing their property. Make an offer and wait for their response.
2. Drive for dollars
As the name suggests, ‘driving for dollars’ is a strategy that involves driving around neighborhoods with the intention of locating abandoned or distressed properties. Once you’ve identified such properties, you can then get in touch with the owners and make an offer.
However, before getting into your car, you will need to conduct neighborhood analysis on the area you are targeting for buying investment property. Mashvisor’s heatmap tool allows you to analyze properties using filters such as price, cash on cash return, rental income, and Airbnb occupancy rate.
Don’t forget to research other issues such as crime rates, public transportation, availability of good schools, neighborhood amenities, and tax laws.
Once you’ve identified an area that fits your criteria, schedule a visit on an appropriate day. As you drive around the neighborhood, look for red flags such as:
- Broken or boarded up windows
- Piled up newspapers
- Tall grass
- Filled mailboxes
- Code enforcement notices
- Deferred maintenance
Take a photo or two of the distressed properties and record the addresses. You can then conduct further research on the properties online, get access to homeowner data, or check the local county records.
Related: What to Look for When Driving for Dollars: 19 Things
3. Work with a data provider to find motivated sellers
Sifting through the long lists of property owners provided by the county can be very time-consuming and frustrating. The information is often presented in a messy way, making it very difficult to find what you are looking for.
The good news is that there are some companies out there that have compiled this real estate data in an organized manner. You will find a wide range of properties including FSBO properties, properties with recent evictions, probate and death certificate properties, non-owner occupied properties, and tax default properties.
Here are the benefits of working with such data providers:
- Relatively affordable with an entry-level subscription
- Easy to find lists and conduct property research
- Advanced search features with filtering options
- Most counties come with GIS mapping data
- Access to the entire United States with one subscription
- Delinquent tax lists are available for some counties
Learn about the kind of homeowner data Mashvisor provides and how you can access it.
4. Visit the Mashvisor Property Marketplace
The Mashvisor Property Marketplace is your one-stop-shop for finding and analyzing all types of properties that are often sold by motivated sellers including:
- Foreclosures
- Short Sales
- Auction Homes
- Bank Owned Homes
To learn more about how Mashvisor can help you find profitable investment properties, schedule a demo.
5. Check Craigslist
Many homeowners and wholesalers advertise property on Craigslist hoping to find a cash buyer. Here are the steps to finding a good real estate deal on Craigslist:
- Go to craigslist.org
- Click on the tab ‘housing’
- Type a keyword in the search bar to find a motivated seller or distressed property. Some of the top keywords you can use are: fix and flip, cash only, must sell, probate, fixer, condemned, violations, REO, wholesale real estate, or owner financing.
The other way of finding motivated sellers on Craigslist is by posting ads. Here are the steps to find motivated sellers now:
- Log in and click ‘post’
- Select ‘housing wanted’ as the type of post
- Select the ‘real estate wanted’ category
- Post a title like ‘We purchase houses as-is, cash, any condition, close fast’
- Post a description of what you are looking for in the body
Conclusion
Once you’ve found motivated sellers using the strategies above, you can analyze real estate deals using Mashvisor’s investment property calculator. This real estate investment software uses predictive analytics to help you find the best investment options in a specific area. You can compare properties based on cash on cash return, capitalization rate, and cash flow. To learn more about how we will help you make faster and smarter real estate investment decisions, click here.