This blog is dealing with the topic of when to proceed with a deal and when it's better just to step away from it. I had a recent situation that inspired this article and I decided to put it on paper because it involves an important topic concerning this business of real estate and something that many other investors ask me about: what is a motivated seller and how can you tell the difference between someone who is motivated and someone who is not? From the question, it would seem obvious but you must remember that you must first define in your own mind what it means to be motivated.
For my purposes, a motivated seller is someone who is absolutely ready to do business and is craving for me to help them. It's not someone who wants to have multiple conversations to get to know me, followed by me coming out to snap some pictures of the house, followed by another week or two of them having an attorney look at the documents, followed by another week of them discussing it with their spouse. I don't care how great the deal may appear, if your seller does not NEED your services, then you're probably setting yourself up for a lot of wasted time and a big disappointment in the end. If you have to consistently call the seller and convince them as to why your service is important, that again is not a motivated seller. If you find that your day consists of calling back people who are in foreclosure and always following up with old leads, you're probably not generating enough new ones and your business is going to be stagnant and lead to disappointment.
I recently went out to northern New Jersey to get a 4 family house under contract that had two mortgages and would have been an ideal property to spend time on and probably would have turned out to be a winner. The house needed repairs as well so a short sale would have been a strong option. The owner had called me twice, I explained the process and he seemed motivated by the standards of my definition. However, when I showed up at the property, the owner was 20 minutes late. Ok, nothing to get too excited about but I was watching a little closer. His next item of business once he showed up was to spend about 20 more minutes arguing with a tenant. Now I was starting to feel as if he was eating into my time. I normally spend less time than that in total at the property. Finally, after I had snapped a few pictures, I took him aside and said that I would like to go over the documents which I had already briefed him on over the phone. It was at that point, that he asked a few questions that to me indicated there was still a bit of indecision on his part. I think in the back of his mind he believed that his realtor might still get the property sold. Meanwhile, the realtor had the property listed for over 6 months and there hadn't been any offers above what he owed on the property.
So I stood there a minute, did a mental evaluation of where I thought I was with this seller, stared him in the eyes and said, "You know what, at this point, I've decided not to do business with you." I thanked him for his time and went to the car where my driver was waiting (I usually pay a notary to drive me). As I walked away the guy attempted to try and open up talks again with me and even was knocking on the window as I began driving away. But I had already made my decision. He had a combative spirit and even though I could have had the papers signed and another deal to work on, I said that this one was a motivated seller in sheep's clothing. Even though I wasted an hour, I still looked at that deal as a win for me because earlier in my career, I might have walked right into that one but this time, I knew when to fold ‘em.
For more information regarding our real estate mentoring programs, contact us at info@maybachrealestate.com.