I have gotten my first deals from the MLS, but have noticed a few neglected homes while driving around my hometown that I want to send some letters to. This is my first attempt at generating leads in this manner and I wanted to have a kind of script in place if I get any calls back. What questions are good to ask and what are helpful tips for talking to potential sellers? What is the best way to sound confident and professional?
Why are you looking to sell?
What kind of repairs does it need?
How much do you owe?
What's the least amount you will accept assuming I'm paying cash and closing very quickly?
Ask these questions every time and you will know if you have a motivated seller and a deal.
Hey @Susan Grinde . I don't recall where I got this from, but this should help you...
Motivated Seller Questionnaire
A motivated seller questionnaire is the simplest and most useful tool for screening motivated seller leads. The motivated seller questionnaire is especially useful for screening real estate leads and sellers that come through blanket marketing methods like bandit sign marketing, flyer marketing and other more specific real estate lead generation methods.
The single most damaging mistake made by beginner real estate investors is not being selective enough about who they spend money, time and effort dealing with. The sample motivated seller questionnaire (and explanation paragraphs) on this page will equip you to avoid this common newbie mistake.
If you're new to wholesaling or creative real estate investing, you can save yourself a whole lot of mental and financial anguish by asking a series of two or three questions to help you decide whether to deal with a property seller or not.
The information you gather from a well crafted motivated seller questionnaire can also help you determine whether the property in question is worth investigating further, regardless of what you find about the urgency of the seller's situation.
The section below will take you through a shortened sample form and discuss each section in detail.
- Full Name
- Home Phone
- Work Phone (maybe fax also)
- Spouse Name (if any)
- Email Address
- Property Address (For Sale)
- How did you find us?
- Who helps you make major life decisions?
The reason you must capture this information as soon, as quickly and as completely as possible is because the phone line can cut off, or the seller might waver temporarily at the beginning of the contact process and you want to make sure you can get in touch with them somehow if that happens.
Although the property address might seem out of place in this part of the questionnaire, it's there so that you can do some preliminary due diligence research on the property. The last question is to help you monitor and track the effectiveness of your various marketing methods and tools...it can also help give you a preliminary idea of how motivated the seller is.
For instance, people who contact you through bandit signs will tend to be more 'out of options' than people who contact your newspaper or yellow page ads.
Screen for Motivation
- Is property currently on the market?
- If yes, how long has it been listed?
- Why are you selling?
- Have you listed your home with a real estate agent?
- What is your plan if your house doesn't sell?
- Do you have any written offers yet?
- Who lives in the property right now?
These are some of the types of questions that will help you determine what stage of motivation (read: desperation) your seller is in, and whether they've really thought through what their options are...
It's what you do here that starts to differentiate the ethical wholesaler from everyone else. If people have other reasonable options, an ethical wholesaler begins to educate them on those 'better' options, right about here. You might be shocked when they come back to you anyway... because the convenience of dealing with you as someone they now trust is 'better' to them than getting top dollar for their house.
- Are your mortgage payments current?
- In the process of divorce or separation?
- Downsizing? If so, why?
- Job relocation pressure?
- Pre-foreclosure notice received?
- Potential problem with co-owners? (Divorce, probate, business, etc)
- Property habitability issues due to severe property damage?
- Other need for fast and immediate lump sums of money? How much?
The questions in this section cut to the heart of why a property owner might run out of options to sell their house the conventional way. Many of the solutions you have to deliver to get substantial discounts on property would have to be solutions to headaches that nobody else (including the seller) wants to tangle with.
If you can't find any compelling problem in this section, you should seriously consider moving on with your life by referring them to some sort of service provider that might be more appropriate for them. 'Service providers' could include real estate agents, accountants, attorneys or even a non-profit organization like NACA-Neighborhood Assistance Corporation of America (not that they don't have their issues).
Property Inspection Report
- Property style: (duplex, rambler, Victorian, Spanish style, etc.)
- Square footage
- Age of property
- Neighborhood Quality scale
- Property damage report (Roof, Foundation, HVAC, electrical, plumbing)
- Any other improvements needed?
This section is about the physical condition of the property and to a certain extent, the neighborhood. Motivated sellers screening involves knowing how to ask open-ended probing questions about the property, to get more accurate and time-saving answers.
For example, instead of saying, "How is the roof? Good? Bad? Ugly?", you should ask instead, "When was the roof last replaced?"
Some landlords and property owners will call you assuming they can scam you into overpaying for their property...these may be motivated sellers later on, but at the moment, they're not worth dealing with and your screening process needs to be able to flush them out.
- Asking Price
- Mortgage loan balance
- Any 2nd mortgage on property?
- Lenders for 1st (and 2nd) mortgage
- Interest rates on outstanding loans
- Are loans fixed or variable? What are loan terms?
- Do you have all your loan papers accessible?
- Are there any other liens or debts on your properties?
- If yes, do you have lien papers?
- By how much are you behind on your mortgage?
- Have you been sent a foreclosure date? What date?
- How much rent per month? Proof? (if rental property)
- Any non-rental income from property?
- Any HOA (Homeowner's Association)? How much are HOA payments
- How much for PITI (Principal, Interest, Taxes, Insurance)payment?
- Utilities costs (Gas, Electric, Water) for the past 6 months
This part of your motivated seller questionnaire gives you the information with which you'll be able to decide whether the property needs a short sale, whether seller financing is an option, and how to structure a deal or an offer that can work for both you and the homeowner.
You'll also need this information to properly market the house to your investment property buyers.
If you're a new real estate investor, I hope you arm yourself with the information on this page to work out win-win-win solutions for your sellers, your buyers and yourself.
Motivated Seller Questionnaire Red Flags
The power of the motivated seller questionnaire is that it helps guide your interview process, and gives you a framework to make the screening as conversational as possible (In other words, it's a script, without the mechanical sounding words and phrases).
It helps you in the 4 following ways:
- Avoid Outright deception by prospective property sellers
- Properly screen your inbound leads for seller motivation
- Helps screen out irritable, irrational, potentially psychotic people you should never, ever deal with
- Helps you build rapport with target ideal candidates
- Supplies information to help structure your deals
Avoiding Outright Deception
I've had a property owner tell me "..All the house needs is less than $5,000 dollars in repairs, and it's ready..." on a house that clearly needed so much work ($35,000 to $40,000 dollars) that no buyer or agent had ever called him back.
Better Motivated seller screening
Being a successful real estate wholesaler is a matter of alignment. Your services are only appropriate for a small segment of the property owner and investor buyer markets, and you have to make sure that you deal with the right people only. Being a successful real estate investor or wholesaler starts with not being shy about asking all the questions you need to get the answers you have to have.
If you're dealing with a motivated seller and you're too squeamish to ask all the questions required to build the required rapport and ask all these questions, you'll definitely regret it down the road and it may be too late then.
Avoiding the Almost-Insane Customer
I really apologize to you if you're one of my sensitive readers, but you'll find out if you really want to go out there that some people are really emotionally maladjusted enough to be considered almost-crazy.
Every landlord or homeowner that I've ever regretted dealing with came with warning signs at the very beginning of the communication process; warning signs I should have heeded. There's no amount of money worth the hassle you'll get by dealing with someone who's going to lie about what you said, lie about what they said, change their minds 2 or 3 times a day, and then run off with your money! I hope I've said enough. Do as I say, not as I did.
Building rapport with sellers
This is one of the most under-estimated aspects of making money in real estate. All other things being equal, having a nice rapport with the seller can mean having a 120 day settlement term rather than 5, greater flexibility to inspect, or show the property and countless other details that can make or break your deal. Having a seller information script that you can use in your initial conversation goes a long way in helping you build that rapport.
Be careful to use a conversational (but authoritative) tone when going through the information gathering process using the motivated seller questionnaire.
What determines whether you have a wholesale deal, a short sale, lease option or Seller financing (Subject-to) deal?
The structure of financing currently on the house, the mortgage balance, the sellers other financial assets, and so on!
If you don't have these pieces of information, no fancy real estate deal analysis software being peddled by the real estate money gurus will help you.
On the other hand, if you have all that verified financial and house payment information from the seller, you can do all the real estate deal analysis you need on a paper napkin and be successful.
What's the moral of this story?
Your motivated seller questionnaire can help you land a deal and being squeamish about asking the questions on the motivated seller questionnaire, is probably a sign that you should look for one of the thousand other ways to make your fortune. Good luck!
Wow! That is a lot of questions and a bit intimidating for this newbie (maybe I am being squeamish and need to continue with the MLS to find other properties).
(As I am writing my response I am beginning to think that I just need to dig in and stop being squeamish! I am going to just do it. I will put together a form with these questions on it and a place to write in the answers so I will be thorough and organized. What have I got to lose?)
Since I am interested in Buy and Hold, and the questionnaire seems more directed to Wholesale, would you use all the questions?
Hey @Susan Grinde . This questionnaire seems long because it provides in depth explanations for each sections and explains why you should be asking these questions. I have used this guide and these questions for a long time and I have never had anyone refuse to answer any of the questions. The main purpose of this set of questions is to determine timing and motivation. If you don't have a seller with the right time frame and motivation you are wasting your time talking to them.
Once you have determined the homeowners timing and motivation you can proceed with the rest of the questions if they are ready to sell and motivated to do so. But as the explanation states, "If you can't find any compelling problem in this section, you should seriously consider moving on with your life by referring them to some sort of service provider that might be more appropriate for them."
The remainder of the questions will help you to determine the best strategy for the deal, whether it needs a short sale, whether seller financing is an option, and how to structure a deal or an offer that can work for both you and the homeowner. It is not just for wholesale deals.
Read over the whole thing, and then read it again and again until you are comfortbale with it. Read it out loud. Practice with a partner. Read it to your dog. Just read it and say it out loud as many times as you can and as often as you can. Before you know it it will be second nature to you and you won't even need the paper in front of you.
Good luck! You got this... go get em!
Great advise to read it over and over again (I guess my dog is not a motivated seller as she just went back to sleep and ignored me).
Thanks for the encouragement. I need the occasional gentle nudge to keep me going down this road of real estate investing.
Ask Peter Fortunato's famous question " why are you selling such a beautiful house like this"
@Braden Smith Thanks for your recent post. Those are great questions! I'm in the process of making a list of questions and this helps tremendously.
Further reading on this topic:
@Braden Smith I just came across this post and your questionnaire is really helpful. I really appreciate your generosity.
Thanks so much!
Just read through that questionnaire, @Braden Smith . Thanks for posting and linking back to it!
WOW! What a great post. Thank you for sharing so much information. My partner and I are swimming through the minefield of seminars, webinars, books and podcasts. This helps streamline the wholesale process.
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