Do Motivated Sellers Actually Exist? [Marketing For Motivated Sellers]

Businesses create products or services that solve a problem for a specific set of people, their clients or customers. I view my customers as my end buyers (since customers are the people that pay you) and my product/service as quality real estate deals for them. In order to get these quality deals for my customers it usually helps to work with motivated sellers.

What Is A Motivated Seller?

My view of a motivated seller is someone who no longer wishes to own a property and is knowingly willing to sell their property below it's actual value. Do not confuse a person who wants to sell
their property with an actual motivated seller. I didn't speak with a motivated seller until months after I initially started. There must be some form of urgency on the part of the seller in order to deal with an investor. When you finally talk with a motivated seller, believe me, you will know it.

How I Find Motivated Sellers

There are a number of ways I find these motivated sellers including:

• The Multiple Listing Service ("MLS")
• For Sale By Owner ("FSBO") Ads
• For Rent Ads
• Direct Mail
• Physical Signs
• Purchased Leads
• Online Marketing

Distressed Situations On The MLS

The Multiple Listing Service & First Multiple Listing Service ("MLS") are great sources of leads for my real estate investing business. On the MLS, I am typically looking for distressed situations where people are more interested in closing fast than they are in capturing the full value of the property. The MLS can only be accessed by real estate agents but if you have a good realtor, they can look for these properties for you in your target area and/or set you up to be notified whenever deals that match your criteria become available.

Expired Listings

Another great source of leads via the MLS is the list of recently expired listings. These are listings where sellers tried to sell their home but they were unable to do so with a traditional listing. While I haven't yet contacted expired listings en masse, other investors say this is a potential gold mine for deals.

FSBO Ads

FSBO Ads are exactly what they sound like. Owners of a property want to sell their home on their own without the help of a real estate agent. I typically contact sellers who have been unable to sell their home for six (6) months. Many times, these homes are mispriced. This usually happens when the owner uses the Zillow value estimate of their home instead of looking at actual comparable sales, getting an appraisal or at the very least getting a Broker's Price Opinion ("BPO"). A lot of these owners also are not great at marketing their properties to potential buyers.

For Rent Ads 

Many owners of rental properties are potential sellers who just don't know it yet. I typically target nicer homes in nicer areas when contacting rental owners as my primary strategy with these owners is a Lease Purchase Option (and its variants)

Direct Mail

Direct mail (i.e. a physical mailing) is a fantastic lead source. Sending a postcard or yellow letter campaign can be incredibly effective at getting people calling you about selling their properties. Some investors have gotten response rates as high as 26% against their list. Mine, admittedly, have been lower than that but still pretty darn good for generating organic leads.

Mailing Lists

There are a number of different lists you can send your campaign to. The most common is absentee owners. Other types of lists include expired listings, pre-foreclosure, and probate (i.e. inherited properties).

Physical Signs 

Bandit signs are signs placed on the side of the road at stop signs and busy intersections. Sellers call the numbers on these signs if they are interested in selling their homes. It's important to get these signs placed in the areas where you actually want to do your deals as the majority of owners will be calling from these areas.

Purchased Leads

I have bought leads from real estate lead generation services before. The main reason I did this is because my Cost Per Lead ("CPL") was lower than some of the alternative methods I used to generate leads. I have also had pretty good success with converting enough of these leads to deals to justify the sometimes substantial cost of acquiring these leads.

Online Marketing

I have used online videos on YouTube and ads on free classified websites (e.g. Craigslist) to generate leads. At this point in time I've only generated a handful of leads from these sources. Due to this, I can't say these have been hugely useful but these assets are evergreen in nature. You post them once and then you can forget about them.

The Surprising Best Source of Leads 

My highest quality source of leads are the ones generated from Direct Mail. These leads have not only read my marketing material but have taken an additional action step and either called or emailed me. The two bad parts about direct mail is that it can cost substantially more than some of the other lead generation techniques and the contacts sometimes take a little while to develop.

Immediate Free Leads  

If you're just getting started and looking for immediate free leads, then consider contacting For Sale By Owner Ads. There are literally hundreds of websites where owners can go to post their property for sale. Perhaps the biggest is Zillow but you should also consider online classified sites like Craigslist.

Tell me in the comments below

How do you generate leads for your real estate business?