Understanding Intentions: Spotting A Good Deal
By JD Esajian on November 25, 2013
More often than not, spotting a deal is as equally important as knowing when a deal will not come through. If you are not careful, you can waste many weeks working with buyers or sellers that never truly had any intention of moving forward. Fortunately, there are some warning signs that you can decipher from talking to the parties involved. Understanding sellers and their intentions will save you both time and money.
When working with a seller, you need to find out their motivation, timeframe and expected purchase price. Just because they placed an ad online or called you to discuss a sale does not mean they are really serious at this time. It is possible they need to sell, but it is also likely that they just want a better feel for the process. If they will not let you see the interior of the house or are looking for 20-30% more than what the comparables are, they probably are not a serious consideration. If they drag their feet when it comes to meeting you or getting documentation back, they may not be as interested in moving forward as you are. This could indicate that they just want you to make an offer so they can delay a foreclosure or short sale process.
Working with buyers can be a little more difficult to determine their degree of seriousness. That being said, there are clues that you should pick up on. A common red flag is if they want to close quickly, but they have put credits and contingencies in place that are abnormal for quick closings. To cover yourself, ask for a deposit. If they are not willing to put down a sizable deposit, this is another red flag. Not having invested anything allows them to walk away from the deal at almost any time without repercussion. Typically, the smaller the deposit, the less interested they are in the property.
If you decide that a buyer or seller is not serious, do not immediately dismiss the deal or the individual. You can keep the buyer in your buyers list and alert them for future deals. If you have a seller who is on the fence, follow up with them every few weeks or so. What they may want today can drastically change in just a few weeks. If they are shooting for the moon, kindly explain to them what the process is and give them a realistic idea of the price supported by comparable listings or sales. It may take some time for reality to set in, but when it does, you want to be the one they sell to.
Working with buyers or sellers that aren’t ready to sell could take valuable time from away from working on more promising deals. In your eagerness to push the deal forward, make sure you ask the right questions and listen to the answers. There is nothing worse than spending time on a deal you expect to close only to find in the 11th hour that it is not. This is usually prevented by what you ask in the initial conversations and how you respond to the answers.