8 Ways to Spot a Sloppy Seller When Buying an Investment Property
There are a lot of investment properties out there for sale. Many of them are owned by savvy sellers, shrewd in the ways of property sales. There’s a certain percentage, though, that are owned by people who quite plainly have no idea what they’re doing.
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You can often spot a sloppy seller in a few ways. They leave telltale signs in the way they try to sell investment properties that give away their inexperience. I’m not saying that you should swindle anyone or anything, but you can use their inexperience to your advantage to help you save money when you buy investment properties. Here are 8 signs to look for to identify a sloppy seller.
1. Unflattering Photos. The internet is awash with photos. Sharing sites like Instagram, Flickr, Pinterest and Tumblr have proved that people love looking at and sharing photos online. Most residential real estate professionals have realized this and made adjustments to the way they display properties online, investing in professional photography to entice people to ditch the virtual tour for a real one. If an investment property’s online listing lacks flattering photos, you may have stumbled across a sloppy seller. This alone shouldn’t be used to identify a sloppy seller, as the property may just be in that much need of updates or repairs that no photos could flatter it enough.
2. Unkempt Grounds. One sure sign of a sloppy seller is a sloppy looking property. If they can’t be bothered to put anything into the maintenance and upkeep of the building and the grounds before putting it on the market, the value of the property and possible sale price can be squishy. If you’re an investor who doesn’t mind putting some work into a property, you could get a diamond-in-the-rough property for a steal. Because making the property look nice is the most basic thing one can do when trying to sell it, shabby-looking grounds are a better indicator that the seller might not be so savvy.
3. Race to the Bottom. Smart sellers and real estate agents offer price drops that will make enough of a difference that buyers will take notice. They don’t make practically imperceptible cuts here and there to sell investment properties when they don’t move. Your real estate representative or broker should be able to help you find out how many price reductions have been made on a listing. Insignificant price cuts over some months can be a signal that the property owner asked for too much in the list price, that they aren’t listening to their real estate advisers, or both.
4. Stale on the Sale. The opposite of too frequent price reductions is waiting too long to change the price, leaving it to languish on the market. Properties with stale listings are often that way because the seller set too high of a price in the first place. Again, your real estate agent or broker can help you check to see how long the property has been on the market and compare it to other similar listings in the area. If you know a property has sat unsold for a long time and you make an offer, keep firm and don't give much leeway. The seller may be just so exhausted with having the property on the market that they agree to what you're ready to pay just to be rid of it.
5. Ready to Be Rid of It. Sellers that are ready to be done with the property aren’t necessarily sloppy as much as they are simply “checked out” of the whole process. A seller in a hurry to unload a property may be willing to accept the next offer that comes their way, even if it is a lower price than they expected. Just make sure that you have the property inspected before you buy it. They could be a shady seller that knows something major is wrong with it, as opposed to just a sloppy seller.
6. Asset Liquidation. Sometimes a seller doesn't have a lot of control over the situation due to partner split, bankruptcy, pending foreclosure or other financial reasons. Local newspapers and classifieds could clue you in to companies looking to liquidate. State tax records that don't add up could be an indication of financial issues. An experienced commercial real estate agent might even be able to dig up all the details about why a property may need to be sold fast and cheap.
7. Unskilled Representation. A rookie commercial real estate agent may not successfully embolden the seller to engage in an effective counter-offer strategy if you make a low bid. Giddy at the idea of adding a win in his or her sales column, the new agent may encourage a seller to accept an offer rather than risk losing the deal. Additionally, agents that are new and inexperienced with real estate in the area may make moves that inadvertently hurt their clients. You can find out if the agent is licensed and discover what properties he or she has sold locally. If you get the idea seller's agent is inexperienced or a blunderer, make a lower offer on the property.
8. No Representation. Unless you’re an expert on real estate evaluation that’s experienced in the local market, there’s no excuse for not hiring professional help with such a major investment. Still, there are those who just sort of wing it when it comes to buying and selling investment property. They may do many of the things I’ve listed here already: Unflattering photos, unkempt grounds, pricing it to high and letting it languish on the market. But because they’re inexperienced and like to do things their own way, it may be harder to find these properties. They may not be listed online; they could simply have a sign posted in the front window. Once you find them, the people who own them could be hard to negotiate with as well. But that doesn’t mean there isn’t a deal to be made.
There's more to finding a good deal than knowing how to identify a solid piece of real estate. Though it's property that is trading hands, it's the people involved who determine how the numbers add up. As I said, you can use a seller's inexperience to buy investment properties for a lower price, but it takes some investigation and knowledge on your part and that of your real estate agent to spot a sloppy seller. But if you can identify one as an owner of a property you've had your eye on, you may have a little bit of an edge in the negotiations. Use these tips to try and spot a deal.