The 3 Types of Real Estate Sellers and How To Deal With Them

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Did you know that there are three types of sellers? Did you know that if you don’t learn how to recognize these three types of sellers that you can waste hours upon hours of your valuable time? Well, there is. And like most things about this business I learned the hard way, so hopefully after reading this it’ll save you a lot of time and headache.

The first type of seller is the motivated seller

These are our favorite. These are people who call you and have a desperate situation and need to sell immediately. They might be behind on their payments and about to lose their house, they could be going through a divorce, or they could be a tired landlord who wants to get rid of their nightmare rental property. With these sellers you don’t actually have to do much “selling”. When you are gathering information about their property, they tell you every little detail you want to know without hesitation. They don’t question you about anything and just want you to end their pain or stress.

When you show up at the seller’s house and sign the paperwork, they don’t even read it over; they just quickly sign it (I’m still amazed every time this happens. I can’t believe how quickly they turn over document after document without actually looking at what they’re signing. Unfortunately, this is one of the reasons there is a lot of fraud in this business. Because dishonest people can easily take advantage of desperate sellers). Anyway, these types of sellers are ideal and these days are pretty much the only type of sellers that I deal with.

The second type of seller is a luke-warm prospect.

This is the seller who calls you and says “I might be interested in letting you take over my payments, please tell me more”. Or, “If my house doesn’t sell this month, I would entertain letting you do a rent-to-own with my property”. Or, “I thought I would be stuck renting the property out, but if you can find a way to take it off my hands I’m all ears”. These types of sellers have to be handled gingerly.

Whereas, with a motivated seller you can show up at their house with your paperwork, special reports and immediately sign everything. You can’t do this with a luke-warm seller because you will scare them off. You need to probably meet them in person first to look at the house, to build rapport and to “sell” them in person. Obviously, since they’re luke-warm this deal probably has a 50-50 shot of closing. Perhaps you will say something that the seller likes and you’ll close the deal, or maybe you won’t. If you’re a new investor and have more time, I would try and work with as many luke-warm prospects as you can. Because you need the experience and because you’re not super busy closing multiple deals a month (but remember the key is to not put pressure on these people or you’ll frighten them away).

The third type of seller is the unmotivated seller

The unmotivated seller will drive you crazy, break your spirit and make you want to quit this business. So how do you identify an unmotivated seller? First off, when you’re asking them questions about the property they will refuse to give you certain information (most likely the mortgage balance or their monthly payment amount). And they will utter the deadly words “make me an offer” when you ask how much they’re asking for the property (Never, ever name a number first). Remember, you cannot force a deal. If someone doesn’t have a pressing need to sell, then the best salesperson in the world won’t be able to convince them to sell their house. Also, you’ll make yourself crazy by driving all over to different sellers houses thinking that if you meet them in person then they’ll want to work with you (they won’t).

When I first started in this business I spent hours in the car driving around from one unmotivated seller to the next, because I didn’t properly screen them and because I thought if they met me in person and liked me, that they would sell their house to me.

So, when your phone rings and the next lead comes in, make sure you know which category the lead falls into, and if it’s worth your time to pursue it.

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.