Understanding the Seller's Motivation

Like any business... there are prospects and there areWe set a date and time to meet. In advance of this
suspects. Which ones would you rather spend yourmeeting I performed a comparable market analysis
time talking to? I hate to be blunt, but if you continue to(CMA) in order to obtain a better understanding of the
waste your time dealing with suspects, you may just"true" market value of the home. To cut a long story
miss out on that "home run" real estate deal that youshort, I met with Bob and his lovely wife Betty. I
have been waiting so patiently for! How do you think Iconvinced them (using fundamental support
know this?information) and of course... a little bit of my
My personal philosophy on this is... get rid of the"salesmanship" and my "charm", that the housing
suspects at lightning speed! They are nothing but "Timemarket would continue to rise substantially over the
Vampires"!coming years. As a result, I offered them FULL market
Once again, how do you think I know this? Been there...value (on paper) for their home. They agreed and I
done that! That's right; when I first started my realimmediately assumed full responsibility of the day
estate investing career I personally spent many hoursto-day management of the property. In essence, I
on the telephone speaking to unmotivated sellers thatturned the sellers and owners of their own home, into
really didn't care if they sold me their house or not! InJoint Venture Partners. This was a great deal for me,
some cases, I think they just wanted somebody to talkas I just purchased another home with no money
to and somebody to listen to their story. Unfortunately,down and I did NOT have to... pledge my first born at
that somebody happened to be me. It didn't take mesome bank!
long to figure this out and once I did, I freed up more ofAs I mentioned, I transacted on this particular property
my time to deal with the people that really wanted toquite a few years ago. This property has since been
sell me their house!sold - we sold it at the peak of the run up in real
When you apply this simple, but very important andestate values in 2007. So this is how the deal turned
effective strategy, you will be truly amazed at theout... we held the property for a period of about three
results! Remember this; it's your job as a sophisticated(3) years. During that time I received 50% of the cash
real estate investor to understand what the seller'sflow ($250.00 my share) per month. We sold the
"true" motivation really is! Take a look in the mirror. Youproperty for $465,000. During that hold period the
will notice that you have been blessed with two earsmortgage was paid down by about $10,000. The
and only one mouth. There is a hidden message here.(approximate) net gain on the deal worked out to be
It goes something like this... We should be spendingabout $275,000, plus annualized (3 year) cash flow of
twice as much time "receiving" as we should beapproximately $18,000. Divide these numbers by two
"transmitting"! Think about it for a minute. Kind of anand my share was approximately $146,500. Not a bad
interesting concept... isn't it?return on my investment! Oh, sorry, I forgot one small
Once you understand the seller's "true" motivation fordetail...I did not put any of my own money into the deal,
selling, you will be amazed at how creative you canso it was actually an infinite return on my investment!
really be. To further support my theory, I will providePersonally, I hate these types of deals as there is no
you with an example of a real deal that I createdway for me to calculate my return on investment
many years ago: I received a call from a prospect thatsince you cannot divide your return (payday) into
was looking to sell his house. He called me as a resultnothing down! Just kidding... I was okay with it, as it was
of one of my creative marketing campaigns that I wasanother free house and free cash! Now that's my kind
running at the time. I will not disclose his name, so I willof deal!
call him Bob. During my "brief" (notice how I used theDid everybody win? Absolutely! This is the ONLY way
word...brief) conversation, I asked Bob why he wasto do business! Let's recap the deal here: My Joint
selling his house? He proceeded to tell me his storyVenture partner (the seller) was looking to sell their
and believe me, there is ALWAYS a STORY! In hishome. Had they done so back then, they would have
case, this particular property was not his primarybeen lucky to pay off the mortgage balance and
residence. In fact, he had a relative renting the house.break even. I guess that's what prompted Bob to
Tony's Tip: Never rent a house to a RELATIVE or arespond to my advertisement in the first place... and he
FRIEND!may not have even done that if they used a Realtor
The relationship was not great and they had indicatedto sell their house. Because I was able to show them
that they would be vacating the property very soon.why they shouldn't sell their home, they pocketed a
Bob advised me that he did not want to deal with TheCOOL $146,500 in profit, and they did not have to do
Terrible T's™ (Tenants & Toilets), so he had madeanything except sit back and... Enjoy the Journey!
the decision to sell.So how was all of this possible? Remember, I took the
Once I understood his underlying motivation, I thennecessary time to understand their "true" motivation!
proceeded to ask him if he "had to sell the property".With a little bit of training, you can do it too! It's really not
His answer was..."not really". I then proceeded to askthat difficult! You never have to take advantage of
the following question; "If I could show you why youanyone or steal anyone's home from them, in order to
shouldn't sell your house, would you be willing tomake money! It truly is possible for everyone to win!
provide me with the opportunity to take over the dayAs a result of speaking to thousands of sellers over
to-day management of the property?"the years, I have developed and obtained a unique
In essence, I would do all the work, while they could sitability to create a deal from just about any situation.
back and watch their investment grow. He liked thatIf you would like to "STOP... Swapping Your Hours for
idea, but advised me that he would first have toDollars" and "Give Up Your Day Job", then I encourage
consult with his wife Betty (not her real name). Goodyou to "EDUCATE" yourself and become great at
choice and a smart man, as I could personally relate tocreating deals where everyone wins... You WILL be
that request! I apply the following rule in my personalglad that you did!
life... Happy Wife, Happy Life!