Real Deal REInvestor Network

There are a few important factors you must consider when evaluating your deals. These pieces of information will give you a better view wether it is a good deal, worth looking further into it or not.

1 - Seller Motivation

The seller’s reason to sell their property is a good indicator if they are trylly motivated to sell or not. By asking them simply, “ Why are you selling?” or “ What is the reason you have decided to sell at this time?”, you will get the first clue to their real motivation.

You will see that most motivated sellers will have no problem in answering this question, on the other hand you will find someone that will question why you need this information. These people typically have no motivation to sell.

If their answer is : “I’ve lost my job and I’m falling behind my mortgage payments” or “The house needs lots of repairs that we can’t afford…”; these are scenarios where the seller has a real reason, a NEED to sell their property. On the other hand when someone answers like : “ I’m only trying to figure out how mucj I could get for my house in today’s market” or “We need more space, we are upgrading”; these are situations where the seller don’t really NEED to sell their house, they just WANT to.

This answer isn’t the only factor that will determine if the deal is good or not but  is a great starting point in separating the deals from the non-deals.

2 -  Asking Price

During your conversation with the seller you need to find out how much they want to get from the property. Their Asking Price.

This is one of the most important questions you need to ask and will help determine whether or not the property is worth looking at and give you a starting point in the negotiations.

There’s no need to say that all sellers would like to get the most money out of what they are selling. You will notice that most of the time – even with motivated sellers – their initial asking price is always higher then their final asking price.

That is when we, Real Estate Investors,  need to get ahead of the game in the negotiating process with the seller and always ask them “What would be the least they would accept for their property?”. You will be surprised by someone who is willing to accept a lot less then their initial asking price.

  3 -  Mortgage Balance

This is an important information about the property and seller’s overall situation. After you know the debt information and how much the seller wants for the property you can understand how much equity the seller thinks he has. This amount is just the seller's perception of how much he is initially willing to sell the house for, versus how much is owed.

4 -  Estimate of Repair Costs

When talking with the seller you need to determine the existence of possible repairs needed in the property. This will be only an estimate for the repair costs. A complete estimate must be conducted at a later date.

You will notice that many sellers when talking about their property, tend to say that their property is in a much better condition then it actually is

Asking the seller if the property needs work will probably get you little to no response. However asking, "If you were planning on staying in the property for a few more years what you would fix or replace?" This targeted question will get you a better answer and help you determine how much work the property needs.