One of the worst things for any business is wasted time. In the world of real estate wasting too much time on one deal can directly cause you to miss out on a future opportunity. Every homeowner you talk to has some idea of what they want to do prior to talking with you. Those investors who can pull this information out in a clear, concise way are often the most efficient and avoid wasting time with a homeowner who is only lukewarm about selling. Prior to any phone call or meeting with a prospective seller there are a few questions you should be ready to ask. Asking the right questions and listening to the answers can help you avoid wasting your most valuable business commodity-time. Here are six questions you should ask to help discover seller motivation.
- What Are Your Goals For The Transaction? The more potential sellers you speak with the easier it will be to develop a pattern of asking questions that works for you. Regardless of how you ask them it is important that you leave the conversation with enough information to let you know where you stand. The first important question you need to ask is what their goals are for the transaction. Every seller is motivated by something unique to them. Some want to sell because they are facing foreclosure others want to sell for the highest amount. Whatever the reason is you need to find it out in the initial conversation.
- Why Are You Considering Selling At This Time? The goals and the motivation are usually one in the same however that is not always the case. You need to discover why a seller is thinking about selling right now. There are many sellers who simply want to kick the tires without ever moving forward. They essentially use your time and expertise to get some idea of their home value and what they can expect. If you ask them why they want to see now you can get a better idea of where they are with the property. They will tell you if there are facing a foreclosure, a relocation, divorce or some other time sensitive event. By knowing why they want to sell it gives you some insight on their motivation which gives you a better idea of whether they are really serious about selling.
- What Are Your Total Mortgages And Amounts? A common mistake that investors make is assuming that the homeowner knows everything about their financial situation. For whatever reason, many homeowners aren’t on top of their mortgage situation and total amounts owed. As you try to establish what the homeowner owes it is important that you ask for all information on every mortgage or item on title. A homeowner may not recognize a home equity line of credit as a mortgage but it needs to be factored into the total amount owed. Instead of taking their word you should ask for the most recent mortgage statement. Not accounting for a second mortgage completely changes everything with an offer and a purchase.
- What Is The Estimated Home Value? You should also try to get the homeowners perspective of the property. It is important to remember that they don’t look at comparable sales and current listings as diligently as you do. What they may think their home value is may be completely off. It is ok to come right out and ask them what their home is worth. The follow up question should be what do you think that is based on. They may have done some work a few years ago or simply saw a home for sale the next street over. If their value is out of whack you can show them supporting documenting closer to your number. Without knowledge of what they are thinking you may waste time with a seller who has an unrealistic view of their home.
- What Is Your Ideal Timeframe? Some sellers are looking to sell as quickly as possible while others want to wait until the end of the season or after an important holiday. The seller’s timeframe should influence your offer. The value of the property today may not be the same in six months. The odds are things won’t change too dramatically but you never know. It is ok to ask the seller if they were given an offer they liked when they would want the transaction to happen. If their answer is not anytime soon you may need to adjust your thinking with the property.
- What Is Your Best Case Scenario Sales Price? What a homeowner thinks their home is worth may not be what they think it would sell for. There are certain situations when they may need to sell in a pinch even for a lower amount. Come right out and ask if they have a best-case scenario sales price. Again, their answer will give you some idea of how you should proceed. If their number is too high you may need to get them back to reality. If they have expectations of getting cash from the closing without equity you need tell them realistically what they should expect. The more information you have the easier it is to proceed.
These six questions you should ask in every new homeowner meeting. Once you discover seller motivation the rest of the transaction will fall into place.
