The real estate investing industry these days is more competitive than ever. It’s the new standard for a motivated seller to have multiple offers to choose from when selling their house to an investor. This allows the motivated seller to take the “best,” or typically highest, offer, which is sometimes higher than seasoned investors are used to paying.
Because of this, it’s more critical than ever to stand out from other real estate investors. This can be accomplished with a higher offer price, which is risky for your business if you’re going above your normal buying criteria, or by getting a little creative.
What does that mean, exactly?
There are a few key ways to stand out that you should be aware of if you’re losing out on deals because you aren’t the highest bidder.
One of the best things that you can do is truly listen to the pain points of the seller and figure out what’s causing them stress. This is done through genuine conversations that don’t have a focus on the house, but on the person instead.
It sounds simple enough and like a natural thing to do, but many investors are focused on the deal and simply if it’s going to turn into a contract or not. They don’t take the time to consider the emotions that the seller is working through.
If the home was in move-in ready-condition, they’d most likely sell with a real estate agent in the more traditional fashion. If they’re reaching out to real estate investors, the house might not be in the best condition or they need to move quickly. This typically goes along with a stressful situation that the seller is in.
By talking to the seller about the reason they’re leaving and what that transition will look like for them, you’re able to see ways that you might be able to make it a bit easier on them. This also gives the seller an idea of how their future will look once they’ve sold the property, which includes you in that idea.
Without getting too involved, you might also be able to offer a creative financing situation that allows a win for both parties. Depending on the situation, you may consider offering a higher price with a creative financing solution, such as an owner financing option, where the seller carries a note on the property for the investor and therefore collects monthly payments including interest.
Another option could be for the seller to work with the buyer to acquire the property subject to the existing mortgage. This would mean that the investor will assume the existing loan and possibly give the seller additional funds at the closing table.
The key when aiming to stand out from other investors is to figure out how you can help the seller the most, including what their true motivations are. Always do what you say you’ll do, and be transparent with the seller. The worst outcome is when an investor has to back out of a deal when the seller is relying on them to perform. They need to trust you through this process, and you need them to trust you. Confidence and knowledge are key.