How to discern motivated buyers from “just looking” browsers
I’m considered a successful real estate investor. I have multiple rental properties that are very lucrative and I’ve flipped a few houses of my own in the past with great financial success. However, when I talk to other colleagues investing in real estate investing, they often complain about wasting time and effort on unmotivated buyers. You know the type—they always say that they are “just looking” and they never have a deadline to buy or even a pre-approved mortgage most of the time.
The more I work with matching buyers to my real estate investments, the more I’m able to identify motivated buyers from “just looking buyers”. As a result, I waste much less time and effort. And I’d like to share my tips for finding motivated buyers for quality real estate investments in 2012…
Targeting A-list buyers
A-list buyers are those motivated buyers who look because they are in the market for a new home. These folks have already pre-qualified for a mortgage. They know what they want to spend and, oftentimes, they also have a deadline:
- They might be taking a job in a new city
- They might have a deadline on their current home sale or apartment lease
- They might be expecting a baby or getting married
- They might be parents shopping for a home for their son or daughter to attend school
Regardless, A-list buyers need to act quickly to find the perfect home as opposed to those who are “just thinking about buying a new home”—the folks who can waste a lot of your time and energy. Unlike unmotivated buyers, A-list buyers have a list of the features their new home must have—for instance things like an attached garage, large backyard, number of bedrooms or bathrooms, or perhaps a finished basement. And if you’re real estate investment happens to have the features that a motivated buyer’s current home doesn’t, you’re almost guaranteed a sale.
In the current 2012 economy, how can real estate buyers be certain they are targeting motivated vs. unmotivated buyers? Here are my tips to help you discern between the two:
- Mortgage pre-approval: It’s quite simple really, if you’re serious about buying a home—you’ll be pre-approved for a mortgage before you start your search. Plus, motivated buyers won’t want to wait to be pre-approved if they find their dream home and want to make an offer. In the current economy, well priced homes appear on the market and are snapped up by motivated buyers quickly. However, if your “interested” buyer hasn’t been pre-approved for a mortgage, chances are they aren’t that serious.
- They have a time frame in mind: Ask yourself why you would be motivated to buy a new home—it could be because of the addition of a new baby, because of a job move to a new city, because you’re getting married, or because you are parents who are in the position to buy your son or daughter a home when they go away to college. Regardless, you can ask interested buyers about their deadline during an open house event. That way, you can follow up with motivated buyers with a deadline in mind.
- Familiarity with the neighborhood: I have a rental in a very desirable area in the city I live in. That’s why I’m never afraid that I won’t be able to rent it out in a pinch. The same goes for homes for sale, if the buyer is familiar with the neighborhood—including the parks, schools, shopping and entertainment in the area—chances are it is a desirable area for them. Focus on buyers who express interest in the area. For example, say they work in the area (it will cut down on commuting costs to the office), have small children (point to quality schools in the area), are students (it’s close to the local college) or have small children (it’s a quiet traffic-free cul-de-sac).
- Don’t ignore what you consider unmotivated buyers
Now just because you are targeting motivated buyers doesn’t mean you should ignore those who seem less motivated or who aren’t pre-approved for a mortgage. Automatically discounting a buyer could have you losing out on a selling opportunity—either later down the line or with another investment property. Instead focus on getting these types of buyers out to your open houses, but don’t waste individual showings with them until they seem motivated. This way, you’re periodically checking in with them via email and they feel like they can depend on you so when the time comes for them to be serious about buying property.
About the Author
Heather is a freelance writer who enjoys analyzes the truths, debunking the myths, examining the legalities and exposing the trends of real estate with her articles. As the member of a real estate investing group as well as the owner of multiple rental properties, and “flipped” houses, Heather believes that Real Estate Investors help put money back into the North American economy. She knows a good real estate investment and a “lemon” when she sees one—and she’ll always provide the solid statistics to back up her facts on why you should invest.