Finding Motivated Sellers with Real Estate Skip Tracing
What are motivated sellers?
A seller of property – for example, a residence or automobile – who is compelled to entertain reasonable offers from prospective buyers. The motivation may come from economic circumstances or a desire to abandon ownership. The buyer is often able to purchase the property at a reduced price or under favorable terms.
Who are motivated sellers?
Motivated sellers can come from any walk of life, neighborhood, level of education, and salary level. There are numerous reasons that property owners can become motivated, or should be highly motivated to sell.
Here are just a few of them…
Law firm McKinley Irvin reports that there is a divorce in the United States every 36 seconds. That is 2,400 divorces per day, 16,800 each week, and almost 1 million every year. Note that the average time to remarry is 3 years. Divorce rates for 2nd and 3rd marriages rocket to 60% to 73%. That’s a lot of divorces. That doesn’t even count the unmarried couples splitting. Every time there is a separation there is need for new housing. And often new unions mean new housing needs too. Whether before, during, or after a divorce there can be tremendous motivation to sell real estate.
Getting a new job, losing a job, or relocation by an employer can all mean serious motivation to sell a house. Few have any meaningful savings to get them through periods without income or to juggle two mortgages.
3. PHYSICALLY DISTRESSED PROPERTY
Whether due to property age, deferred maintenance, storm damage, fire, flooding, vandalism, or buying a property with hidden issues, there are millions of distressed properties out there. These issues can quickly accumulate costs, fines, bills, and violations. Many can’t afford to fix the issues.
Another area of motivation is when nearing the end of life or inheriting property. Often heirs can’t or don’t want to care for a property. They need to sell fast to avoid it becoming a financial drain, or losing the inheritance altogether.
5. FORECLOSURES & FINANCIAL DEFAULT
Foreclosure may be one of the most common motivated seller situations. Foreclosure is commonly automatically linked to falling behind on mortgage payments, but that is just one reason people fall into foreclosure. Underwater mortgages, balloon mortgages, fraud, property tax delinquency, code violations, failure of insurance companies to pay claims, and even income tax issues can all lead owners down the road to the brink of losing their properties.
6. REAL ESTATE AUCTIONS
Real estate auctions are definitely a place you’ll find motivated sellers. This may be creditors auctioning off properties, or owners and agents seeking a fast way to move real estate.
7. BUILDERS & INVESTORS
Builders and investors can also be highly motivated sellers. Builders and developers are on tight timelines to move units. Investors of all types can come under pressure to shift assets off their books too. This may be due to regulations, poor marketing, rising costs, changing market dynamics, or personal issues. This may bring the opportunity to pick up deals in bulk.
8. TAX LAW CHANGES
Tax law changes have often been big motivators to sell. When tax rules change investors may need to beat deadlines before their liability goes up, or before the property becomes less attractive to other buyers. Note that interest rate hikes can also have similar affects.
9. MOTIVATED REFERRAL PARTNERS
Don’t overlook motivated referral sources either. There are many professionals and businesses which are constantly dealing with motivated and distressed sellers, and who may also have a high level of motivation to get their contacts to take action. This may include; attorneys, financial advisors, mortgage loan officers, bank managers, real estate agents, other real estate investors, and more. These leads may include expired listings, borrowers turned down for loans, executors of estates, and others.
Again these leads can come from any neighborhood, anywhere in the nation from the most expensive to the most affordable. The best at mastering these opportunities will be those that get food at finding motivated sellers, being found by them, and who can anticipate who will be facing the most motivation next.
Using Batch Skip Tracing for Finding Motivated Sellers
If you’re not familiar with skip tracing, it’s simply a way to find someone based on a minimal amount of information. Debt collectors, repossession agencies, private investigators, and other businesses frequently use skip tracing to find people, especially those who are avoiding being contacted.
For real estate, skip tracing is a bit different. All you need is a phone number or email. You’re not serving process papers or anything. So, people usually won’t be hiding from you (hopefully).
This makes it possible to conduct skip traces for real estate in bulk. You can generate a lot of leads very quickly.
Now, is skip tracing better than direct mail? In many ways, yes.
Direct mail is tried and true. It will probably always work for real estate wholesalers. But, using skip tracing for real estate can be more efficient and effective, if you do it right. Also, it’s not an either-or situation. Using a combination of direct mail and skip tracing is a totally viable strategy.
But, here’s why skip tracing for real estate is amazingly efficient and effective.