Motivated sellers are those selling because their situation has changed and is forcing them to sell fast. They are highly motivated to act now to solve their problem.
Ask questions like:
- Why are they selling?
- What do you need to walk away with?
- Would you be willing to sell for what you owe?
- Would you sell for what you would net through a realtor?
From their answers you should be able to gauge whether or not they are motivated to sell. If you decide they are motivated, set the appointment to view the inside of the house. Make a list of all repairs that are needed even the most minor ones. I use the following formula to determine my offers. Tailor your offer to meet just their needs–no more. Before submitting the offer be absolutely sure you can perform on what you have offered. I like to write at least three offers. You will be surprised how often they are accepted or reasonably countered.
Today many transactions involve some form of owner financing where the seller holds paper for part or all of the equity. What I like to tell people is that, if I obtain conventional financing I always pay less because of finance charges, broker fess, etc. If they can accept owner financing I can pay them more. As a buyer, the trick here is to get the softest terms possible.
One technique is interest only with the balance (balloon) due some time in the future. I never pay more than 3-4% interest. Reason is that the homeowner is not a bank. They don’t have bank employees to pay, ATM machines to maintain, and buildings to keep up with. Be careful about having too many balloon payments on a number of different properties all coming due at the same time. Try to structure an escape in the balloon to allow you to extend the balance for an additional period of time.
The key is to not get stuck in a mindset and remember to think out of the box. You are only limited by your own creativity and imagination. Remember that if you can solve their problem in a creative manner and both parties agree to it, everybody wins.