Motivated Sellers Are Not The Same (Housing Update)

When engaging in real estate marketing for wholesale deals as an investor, the key is not only to find motivated sellers, but also to discover reasonable sellers. A motivated seller is willing to sell due to pressing needs, but it's crucial that they are also reasonable. A reasonable seller comprehends the market situation, understands the numbers, and is realistic about pricing.

In real estate wholesaling, the majority of incoming leads might not meet these criteria. Many sellers might have unrealistic expectations, overestimating the value of their property. For example, they might refuse a $ 225,000 offer on a Zillow-listed $ 325,000 property, which does not align with market realities.

Consider a property valued at $ 325,000 but to make a profit, an investor needs it in the low $ 200,000 range. If the seller is asking $ 300,000, it's unlikely they'll slash the price by $ 100,000. While possible, the probability is low.

An ideal scenario is a property valued at $ 330,000, with a seller asking $ 260,000—already $ 70,000 below market. For instance, a seller with an inherited, vacant property is often more willing to negotiate since they need to sell without market concerns.

Moreover, a reasonable seller understands that top-market properties are fully rehabbed, and therefore, willing to offer room for necessary improvements at a discounted price.

This aligns with our experience in running ads for motivated sellers and partnering with clients to facilitate transactions. Understanding the property owner's mindset and educating them on market conditions often leads to a sensible discount, facilitating a profitable deal.

Even if only a small percentage of leads pan out, the return on investment can be substantial. For example, getting 50 leads at $ 20 each, totaling $ 1,000, can yield deals averaging $ 15,000 profit, justifying the marketing spend.

Therefore, focus on sifting and sorting your leads to find those who are both motivated and reasonable. Combining the two characteristics will significantly heighten your chances of closing deals and achieving a high ROI.

Keywords

Real estate marketing
Wholesale deals
Motivated sellers
Reasonable sellers
Market value
Property value
Lead generation
ROI (return on investment)
Real estate wholesaling
Investment property

FAQ

Q: What is the difference between a motivated seller and a reasonable seller? A: A motivated seller is eager to sell quickly, often due to personal circumstances. A reasonable seller not only wants to sell but also understands market realities and is realistic about pricing.

Q: Why is it important to find a seller who is both motivated and reasonable? A: Combining these characteristics increases the likelihood of negotiating a sensible deal that benefits both the buyer and seller, making the transaction smoother and more profitable.

Q: How can you identify a reasonable seller? A: A reasonable seller understands the current market conditions, is aware that top-market properties are fully rehabbed, and is willing to offer a discount for necessary property improvements.

Q: What is a good strategy for assessing leads? A: Sift and sort through leads, focusing on those who exhibit both motivation and reasonableness. Prioritize leads coming from reliable sources like online marketing rather than solely relying on cold calling.

Q: What is the potential ROI for investing in leads if only a few are viable? A: Even with a small percentage of viable leads, the ROI can be significant. For instance, spending $ 1,000 on 50 leads at $ 20 each can result in deals averaging $ 15,000 profit each, offering a substantial return on your marketing investment.