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Motivated Real Estate Seller Negotiation

Aug 21, 2008
When it comes to being successful at real estate investing the term "motivated seller" is the key to the bank.

When you see the words 'motivated seller' next to a name on your list, it can seem like you've just been given a gift from the gods. Sellers who come to the table with high motivation are, by general definition, wanting to sell at a reduced price.

While this may sound ideal - especially to an investor like yourself, who has to make a profit - it will benefit you to tread carefully.

Ask And Listen

Understanding the seller's motivation is what is important. As part of your negotiating strategy learn all you can about why the home is being offered for sale. Is the seller financially distressed and a true motivated seller?

Find the answer to that question as quickly as possible, so that you don't waste with someone who won't settle for a sales price of anything less than full market value.

When you meet the seller, ask questions. Ask questions and LISTEN! Most people like to talk and are eager for someone who will listen Now is the time to remember you have two ears and one mouth for a reason. It is to remind you to listen twice as much as you talk. Chances are they will tell you everything you need to know to make an accetable offer.

If the property has been listed with a real estate broker get all the information you can from the listing agent. Ask the agent exactly why the seller has been classified as a motivated seller?

Home owners usually become motivated sellers for one of these reasons:

1. Lost job or transferred
2. Divorce
3. Illness and health expenses
4. Financial and debt problems
5. Facing foreclosure

If the seller says, for example, 'I want to sell quickly with as little hassle as possible', you can understand from this that they don't want any stress during the sale process. If you can prove to them that you will take care of the sale quickly and efficiently with minimum effort from them, they will be motivated to do business with you.

If a seller indicates that they want to be able to tell friends that they have made a great deal, then give them something to brag about. Even a minor concession can do the trick.

But knowing the reasons for motivation isn't always what is needed. Sometimes these reasons aren't strong enough, and skilled negotiation must take place if you are to secure a deal.

A highly useful technique in negotiations is acting on what the seller is telling you. If a seller says 'I see', or 'I just can't see...' this means that they are visually orientated. Listen to this and take action by adapting your sales technique.

In other words, talking to them for hours on end is nowhere near as effective as showing them calculations on paper, or providing them with a breakdown of everything in black and white.

This is skilled negotiation, because your communication technique has recognized the seller's needs and you have found his or her hot buttons. It is really just using simple psychology, but most novice investors center their thinking on their own needs instead of those of the seller.

Active listening is also very useful when it comes to a seller's ego. If they give you clues that indicate that they are embarrassed by their situation, that's your signal to reassure them.

Let them know that they are not alone in their distressed situation. Explain that others are facing similar problems and those problems are caused by the slow economy, or a recent plant closing, or mistakes make by the local government... any reason other than their own mistakes.


Here's something very few real estate investors have discovered. If you really want connect with someone, you've got to exhibit the same qualities as that person. You can do that with a little understanding of body language.

Try the follow:

- Match their facial expressions, gestures, posture, speech, styles, actions, breathing patterns, values and beliefs. BE THEM. By doing this, you are also matching their way of thinking. You may even find that you are able tap into their inner thoughts and attitudes.

- Use crossover matching when building rapport with people who are in a stressed. Cross-over matching involves matching another person's behaviour with a different behaviour of your own. That could be matching their breathing rate to your head tilt, or their eye blinks to your foot-taps. This is a way of building rapport that is very difficult to detect, and still highly effective.

All of this is called "mirroring".

When meeting sellers, if you display the same expression as they have, or mirror their expression, they will generally be much more friendly. You might see this related to the way a person accepts their own image when looking in a mirror.

Don't mistake mirroring for mimicry. You should act with caution. Never let the person you're mirroring have any chance to think that you are mocking him.

Your main objective should be to influence the subconscious. Even if a person is not aware that you're mirroring him, his subconscious mind will realizes it.

Benefits for Buyer and Seller

One of the keys to success is to be sincerely trying to solve at least one of the home seller's problems. Let them know there will be benefits in your purchase offer for both buyer (you) and seller (them).

Usually the number one problem will be their need to continuing making their monthly mortgage payments. They may even have missed a payment or two before you meet them. Let them know you can solve that problem right now by buying the property.

By carefully listening to motivated sellers you can identify the problems that need to be solved. You then explain how you can buy the home and lift the worry from their shoulders.
About the Author
Mark Walters is a third generation real estate investor and founder of CreatingWealthClub.com. For a limited time Mark is offering his big guide to finding hard money loans for real estate investing free. Free guide to private money loans.  http://www.FindPrivateMoney.info
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