Here’s another question that just came in…

Question: "How do I deal with bank owned (REO) properties to get them when the price listed is higher than I’m offering? How do I make the sellers get motivated?"

Answer:

For starters, it’s pretty hard to motivate someone to do much of anything.  Let me give you the example of my 6-year old daughter. 

It would be just about impossible for me to get her to eat bolonia.   It doesn’t really matter if I offered her ice cream every day for the next month, she just plain wouldn’t eat the stuff.

It’s not much different with a seller who just is motivated to take one of your offers. 

So before you spend much effort on chasing the property, you must first know either the property is already priced close to where you think you want to be.

There is one notable exception. 

You may be able to force a motivation on the sellers.  You have to be careful how you do this, and I wouldn’t advise be deceiptful. 

You could in some way taint the property.  In other words, you create a problem in mind of the seller that may not have been there before. 

One example is mold.  Some investors will go to the trouble of doing mold testing on a property.  If they get a positive result for mold, they will present that to the seller.  That seller now has a duty to disclose that mold result to other potential buyers. 

Let’s say the seller is asking $100,000 for the property.  You want to buy the property for $50,000. 

What you can do is submit that $50,000 offer with evidence of  problems, like mold. 

What you are really after is not evidence of problems like roof leaks (i.e., it needs a new roof), but evidence of things that seller and that real estate broker have to tell other buyers.

A few examples of those might be evidence of foundation issues.  Or mold.  And then an estimate of what it’s going to cost to fix the problem. That’s one way to manufacture motivation in a seller."