Understand Your Sellers to Make the Best Real Estate Deals
As a real estate investor, your main focus is your bottom line. You are looking at dollars and cents. You want to buy properties for the lowest possible price, make the necessary renovations and then rent out or resell them for top dollar. This is how you make profit and generate a desirable income from your investments.
Not Always So Cut and Dry
However, it’s not always as simple as this. The more you get into investing, the more you find out some transactions can be more complicated than others. You are buying houses—commodities that you can flip for profit or hold onto for long-term appreciation and rental income. Unfortunately, the sellers you are working with may have a different point of view. To them, it’s not just a house. It’s a “home.” The more you recognize and understand this fact, the better deals you might be able to make as a real estate investor.
House vs. Home
If you come into the transaction treating it as a cold, hard real estate deal, you may find yourself up against some resistance. There are sellers who want and need to move fast or maybe don’t carry any emotional attachments to the property. In those cases, you can just focus on the financial aspects of the purchase and keep the transaction fairly simple. Perhaps it’s an unwanted investment or inherited property. Or, the seller is in such a bad financial situation that they see their house as more of a burden. They no longer think of it as their home, but as a property they need to get out from under.
In most cases, though, there will almost always be some emotional ties between the seller and their house. They lived there or it belonged to a lost family member. They need to sell it or want to unload it, but they are still driven somewhat by their emotional connections to the home. Being able to apply some empathy or sympathy could benefit you as a real estate investor.
Understand the Seller’s Motivations
The first step should always be to understand why a homeowner is selling their property. Get to know them just enough and learn their motivations. This can help you craft the best offer and figure out the solution that works best for all parties involved. They may not be focused on the money, or that could be all that matters to them. Maybe they are looking for ways to stay in their home a little longer or interested in working out some other creative financing solutions. If you have some flexibility as a real estate investor, their could be a more profitable outcome that appeals to the homeowner while benefitting you in the long run.
It always helps to keep your eyes and ears open. This is how you find good deals, make positive connections with your sellers and find solutions that benefit both sides. There are times where you will have to put your foot down, draw a line in the sand and remove all emotional elements from a transaction. Then, there may be other times where a little empathy and understanding can go a very long way toward getting a great deal done. We’re not saying you have to become best friends with your sellers. Just take the time to understand their motivations and needs. You might be surprised at how effective this approach can be!
For help with all your real estate investing needs—including property analytics software, access to off-market deals and much more—join the PropertyLark home buying network.