Case Study:

A Real Life Example Of Satisfying Seller's Needs.

Buying homes from private individuals is very different than buying real estate from the government entities like HUD and VA, or banks’ REO department, or at auctions.

All of the above are pretty much faceless, emotionless entities and their employees. Their selling decisions are made based on facts and figures. There is no personal emotional attachment to the property or personal circumstances of the seller that affect the selling process, prices and terms of sale.

Occasionally the sale may be affected by the financial circumstances of a particular entity. However, the pertinent information about those circumstances is rarely easily available.

Not so, when you’re dealing directly with the homeowner who’s selling the property. That’s when all the personal factors and circumstances come into play and will decide the outcome of the sale.

That information isn’t hard to get. Often, home sellers themselves volunteer that information.

Perhaps the easiest way to illustrate this point is with the real life example.

1. The Motivated Seller.

The owner of the very first investment house I bought in 1991 was in the latest stage of the pre-foreclosure. He was several months behind on his mortgage payments. The house was scheduled to go to the foreclosure auction within a couple of weeks from the day I called the owner.

The value of the home was about $75,000. The owner's loan balance was only $33,000. Additionally he owed about $3,500 in back payments, attorney fees and late fees. The owner was facing an imminent foreclosure and credit damage, so he was extremely motivated to sell. He was willing to sell for $46,000, or at $29,000 discount from the market price of the home.

2. Seller Needed Money, But Other Investors Didn't Offers Him Any

He was already approached by the pre-foreclosure "vultures" who offered him nothing, but to take over his house and save it from going to the auction. He was holding out for more. Then there were several others who offered him what he was asking for and even a little more, but wanted him to finance the entire purchase price. It couldn't and didn't work for him.

3. Understanding Seller's Real Bottom Line Needs

At the price he was trying to sell, $46,000, he would be getting about $13,000 of his equity. Of course, he'd have to pay the back payments and fees to the bank. Still he'd end up with about $9,000 of NET equity.

After talking with the seller I realized what he really needed immediately was just enough cash to stop the foreclosure and a couple of thousands for moving expenses. He still wanted to get the rest of his equity, but it wasn't urgent - he could wait for it.

4. Structuring An Offer To Create A Win-Win Solution

What I offered him was to take over his loan and pay him the $12,000 in equity he wanted. However, I negotiated to pay only a half (or $6,000) of that equity in cash - just enough to cover seller's immediate cash needs.

He agreed to accept the remaining half in the form of seller-financed note with monthly payments. He still ended up getting about $2,000 in cash at closing -enough money to help him move and pay the rent and deposit on a new place.

5. Conclusion

Learning the information about the seller, his situation and immediate problems may hold the keys to you acquiring a property with the great profit potential.

However, it’s extremely unlikely that you could get the deal like that done totally without money.

The example above is a pretty typical case of a motivated seller you might find in your market place.

In fact, I got a phone call the other day in response to my "I Buy Houses" classified ad in my metropolitan newspaper from a home seller who had different reason for his motivation, but similar needs.

He was getting divorced, owed back property taxes and needed about $16,000 in cash to pay the bills and split the rest with his ex-wife. He was willing to give the house away for about $35,000 below market price.

I bought his home because I was able to produce the cash he needed.

If you're trying to find only those who'll give you their home without any money changing hands - you won't be buying homes from all those real people with real needs.

Out of thousands of home sellers who might have homes on the market for sale in your area right now - you will only be able to buy from some 1% of them, or even less. To get your deals done, you'll have to target only those who are absolutely desperate. So desperate in fact, they don't care about anything and they'll just be willing to accept those "no money down" offers.

There are 2 major problems with this approach:

1. There Are Too Few Of Them, So They're Extremely Hard to Find (Like a Needle in a Haystack), and

2. Every Investor In Town Is Looking For The Same Kind of Sellers.

Welcome to the club! You're not alone in your quest for real estate riches. Oh no! Thousands of "wanna be" investors go to seminars, buy home study courses, enroll into tele-classes, coaching and mentoring programs -- every year -- all with the hope to strike it rich in real estate.

And there're hundreds of those investors in your very town who all heard the same story about "no down payment creative financing". As we speak, they are trying to find those elusive desperate sellers who'll just give them the house without any money.

Don’t you be one of them! (continue reading my report to find out how to separate yourself from the crowd).

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