The past two articles provided you with information on How to Find Motivated Sellers, no matter what your budget. Click here to see Part 1 and here to see Part 2 on that topic. As often happens, once those posts were published, I thought of even MORE ways for finding motivated sellers. So here’s a third article on the subject.
I recently heard about a gentleman in Tennessee who is getting deals from Zillow. He emails offers to everyone who has their home listed. The offers are low. But with those who reply and don’t give him a flat out “no,” he starts negotiating. He’s ended up wholesaling a few houses and making some nice money with this technique.
Keep in mind, there are a few issues with Zillow. For one thing, it can take several days for new listings to show up there. On the other hand, owners of properties that have been listed for a while may be more motivated to hear your offer.
Another issue I’ve heard regarding Zillow (and Trulia) is that their listings are not super accurate. So up to 1/3 of the ones that say they’re for sale, aren’t really for sale. And they may only show a fraction of the houses that really are for sale.
Joe McCall discusses using Craigslist for finding motivated sellers on JP Moses’ site REI tips. He culls through all the rental property ads on a daily basis. He’s betting that a lot these advertisers may have inherited a house and are trying to rent it out instead of sell it. Or they’re tired landlords who would prefer not to deal with tenants anymore, but figure the pain of selling is even greater.
He reaches out to them and asks “would you consider selling your house instead of renting it?” Or “Would you be open to maybe doing a lease-to-purchase or rent-to-own if you had the right buyer?”
Joe claims he’s not seeing anyone else use this tactic, as the landlords are telling him no one’s ever asked them those questions. Using a combination of text, voice message and email and keeping the messaging personal, he’s getting a 15% response rate.
You can do the same thing with Zillow rental listings, as well as Craigslist FSBOs. We’ve not put this tactic to work for us yet, but I’m willing to be there’s a significant amount of low-hanging fruit here.
Obviously, a real estate agent’s job is to get the most money possible for his or her client. In many cases, if a house is in condition for the retail market, selling to a wholesaler isn’t going to be the most profitable way for their seller to go. However, there are times when an agent is contacted about a property that just is not ready for prime time. Perhaps it’s owned by a hoarder, or someone who inherited the house from a hoarder. The house could be part of an estate. Maybe the home needs much more work than the homeowner is able to put into it. There are a number of ways and reasons a real estate agent could find out about a property that would be best suited for selling to a wholesaler.
If you’ve created and nurtured a relationship with that agent, you could be the first person she calls for an offer. Here at Express, the agents with whom we work know they’ll get paid a 4% commission, (hopefully on top of the 3% the seller pays), and they’ll earn it faster because the house won’t sit on the market for months. PLUS they look like heroes to their sellers because they solve the seller’s problem of selling a difficult property quickly – which increases the likelihood they’ll get referrals down the road.
So it pays to establish relationships with real estate agents. But make sure you do it from a place of respect. I’m not sure I even need to say this, but I will just in case someone doesn’t know. Don’t insult and annoy them by making 50-70% offers on regular retail listings that have been on the market for two days!
A better way to approach it is to contact listing agents of “pending” properties that you see via the MLS need work, you know, the ones that only an investor would purchase. Ask the agent if it’s still under contract and let him know that if the buyer falls through, you would like to make an offer. It’s not unusual for these deals to fall out, so if the agent has a backup buyer, the agent will still get his commission, the seller still gets his house sold, and everyone wins.
As promised, still to come is more on how to build and foster those relationships with Realtors® and other valuable contacts.
Have you signed up to attend the DMV’s premier wholesalers meetup yet? Meet other wholesalers and aspiring wholesalers and join the discussion of how to find and close more deals. See details at https://www.meetup.com/Express-Homebuyers-Wholesaling-Real-Estate-Meetup/