With the economy the way it is right now, foreclosure rates haven’t been this high in decades. This means, for real estate investors, that we’re in a time where reasonable offers from sellers are rarely ever refused. Home owners want to sell their properties as quickly as possible before the bank takes siege. Vital knowledge to have, as a real estate investor, is to know how to determine a subject’s market value promptly. The key to getting a rough estimate of the property value is to know the right questions to ask. These will also help you determine if the person you are speaking with is a good lead or a waste of time:
- Find out if they have already had a professional appraiser come see the place and evaluate it’s worth.
- If not, ask the client how much they think their home would be appraised for if a professional were to have a look at it.
- Then ask them how much they think it’s really worth. These two usually differ because the client normally thinks their property is worth more.
- Ask if they have a mortgage on it, a second mortgage, or any other such ties, and then discover how much they owe.
- Then, an important question to raise is how low would they be willing to negotiate for, if it were to be paid off and closed quickly by you or your company? How soon could they move?
Now, if you find that they are expecting a bit too much for their property, here are a few useful inquiries to make to help you determine the actual condition of the home, instead of the inflated vision they have of the place. Their inner dialogue and verbal answers to these questions will also help convince them that it is in their best interest to accept an offer that is lower than what they are anticipating.
- What would a first-time visitor rank the exterior appearance of the home on a scale of one to five, five being exquisite?
- What adjustments would need to be made for it to be considered a five and how much might these fixes end up costing?
- Then ask these same questions again, but applying to the inside of the home.
- Always figure in paint and carpet, just in case.
When you are quite sure that the client is a good lead and are about to set an appointment time, but want to verify the deal and calculate the equity first, just ask them if they can hold on for a minute while check your schedule. This gives you time to calculate and confirm without having to call them back and possibly lose the opportunity.