How to Find Motivated Seller Leads for Real Estate

What’s a “Motivated” Seller?

To a motivated seller, their property resembles a mosquito around 2:30 a.m. in the bedroom. It’s a pain in the a***.

So this type of seller wants to get rid of it as soon as possible to sleep well again. He is, therefore, likely to:

• Accepting lowball offers and being willing to sell 10-30 percent below market value
• Accept favorable terms, such as zero percent interest, financing, or no money down

What’s The 80/20 Principle?

According to Wikipedia, the Pareto principle is the law of the vital few or the principle of factor sparsity.

It states that roughly 80 percent of the effect comes from 20 percent of the causes for many events.

Business management also hypothesizes that “80 percent of sales come from 20 percent of clients”.

Many natural phenomena have been shown empirically in mathematics to exhibit such a distribution.

So, we can safely say that this principle also applies to marketing methods.

Finding Motivated Seller Leads for Real Estate- 22 Examples of What You Usually Find on the Web

When looking for methods to find motivated sellers on the web, you usually get bombarded with long unordered lists and different ways, such as these 22 methods:

• Network with hundreds of business cards and let everybody know that you solve problems for motivated sellers
• Driving for Dollars and look for For Sale By Owner (FBSO) signs or vacant houses, or occupied but messy homes
• Go to unemployment offices and leave flyers there
• Post-one-page flyers on bulletin boards at large stores
• Advertise “We Buy Houses” on Craigslist
• Do some guerrilla marketing by being a walking billboard
• Direct mail to:
• out-of-state landlords
• absentee owners
• vacant landowners
• divorce attorneys
• estate/probate attorneys
• credit repair agencies and credit counselors
• HUD/VA foreclosures
• owners who have owned for 15 years or more
• pre-foreclosures
• properties purchased between 3k-20k within the last five years
• specific zip codes
• people arrested for violent crimes
• realtors
• laid-off employees
• owners of section 8 approved properties
• owners of properties with liens: mechanics liens, tax liens, HOA liens
• bankruptcy court listings
• CPA firms
• people getting their cars repossessed
• carpet cleaners
• charitable groups/churches
• city & county inspectors
• people having garage sales
• hair salons/barbers (because they are social hubs)
• insurance brokers
• owners of multiple properties
• water, gas, and electric company shut-off lists
• Cold call FSBO sites
• Cold email to Craigslist rental property ads
• With the help of a realtor partner making lowball offers on the MLS
• Use bandit signs such as “We Buy Houses.”
• Network with other investors
• Post Newspaper classified ads (“We buy houses”)
• Make contact with sales reps for new home subdivisions
• Reach out to mortgage companies
• Contract a bird dog
• Advertise on boards at nursing and retirement homes
• Put door hangers on target properties
• Have mail carriers notify you of vacant properties
• Advertise in penny-saver papers
• Buy leads from Data Tree, AgentPro247, ListSource, MelissaData, Real Quest 
• Do a social or search PPC campaign

So, as you might have noticed, you can come up with a pretty hefty list very soon.

What’s the 80/20 in That?

It becomes overwhelming if you already have a team of people in your business that can dedicate enough time to each of those methods.

But even with a team at hand, finding the 80/20 principle in these methods might be helpful, so it can focus on the 20 percent of practices that generate 80 percent of your leads. 

You can find this by asking what 20 percent of all these methods could bring me 80 percent of highly motivated sellers, as you can see in the book “The One Thing.”

What is the one method or thing you can do that makes everything else easier or unnecessary?

What Can We Do to Find That Out?

We will need more data about the different methods and criteria we can base on to make other decisions about priorities.

Suitable criteria are scalability, the necessary time intensity for each method, and testability.

All three kinds of influence each other proportionally.

Something easily scalable is usually not time-intensive but has a nice leverage effect by using technology or freelancers by outsourcing or hiring employees.

And by using technology, you can test it until you have a winner.

Knowing about the scalability is essential because once a campaign is a winner, and assuming you want to grow, you might like to extend the campaign somehow.

Knowing that you can test it quickly, you can improve campaign iterations simultaneously than less testable and more time-intensive marketing methods.

Finding the 80/20 is also finding the place or point where you can apply the best leverage.

So, by applying these categories, let’s put some order in the messy list above.

Here is the ordered version by category of time and scalability.

Most time-intensive, less scalable, and less testable:

• • Driving for Dollars and looking for For Sale By Owner (FBSO) signs or vacant houses, or occupied but messy homes
  • Do some guerrilla marketing by being a walking billboard
  • Go to unemployment offices and leave flyers there
  • Post flyers on bulletin boards at large stores
  • Use bandit signs such as “We Buy Houses.”
  • Network with other investors
  • Put door hangers on target properties

Less time-intensive, better scalable, and moderately testable:

• • Advertise “We Buy Houses” on Craigslist Cold call FSBO Sites
  • Cold email to Craigslist rental property ads
  • With the help of a realtor partner, making lowball offers on the MLS
  • Post Newspaper classified ads (“We buy houses”)
  • Make contact with sales reps for new home subdivisions
  • Reach out to mortgage companies.
  • Contract a bird dog.
  • Advertise on boards at nursing and retirement homes
  • Have mail carriers notify you of vacant properties
  • Advertise in penny-saver papers

Least time-intensive, most scalable, and easier to test:

• Buy leads from DataTree, AgentPro247, ListSource, MelissaData, Real Quest
• Do a social or search PPC campaign
• Out-of-state landlords
• Absentee owners
• Direct mail to owners of vacant land, divorce attorneys, estate/ probate attorneys
• Direct mail to credit repair agencies and credit counselors, HUD/VA foreclosures, owners who have owned for 15 years or more
• Direct mail to pre-foreclosure properties purchased between 3k to 20k within the last five years, specific zip codes, and people arrested for violent crimes.
• Direct mail to realtors, laid-off employees, owners of section 8 approved properties, owners of properties with liens, bankruptcy court listings, CPA firms, people getting their cars repossessed, carpet cleaners
• Direct mail to charitable groups/ churches, city and county inspectors, people having garage sales, hair salons/barbers (because they are social hubs), insurance brokers, owners of multiple properties, owners of vacant land, divorce attorneys, estate/probate attorneys

Why is that?

With paid advertising, you don’t need to drive somewhere or contract a freelancer using a walking billboard with your offer on the side of a street.

So this makes it less time-intensive. You could do it in your pajamas from home.

Then, you want to make several test iterations, such as doing an A/B test using different ad creatives.

For the walking billboard, you would need two people with different ad creatives switching places, maybe hourly, to determine which billboard works best.

This is not the case with pay-per-click campaigns.

Here you can create different versions of an ad and let technology do the rest.

And once you have a winning campaign, how do you increase your exposure with a walking billboard and scale?

You would have to hire two walking billboard people, maybe 10, and use other places where they can stand on the roadside.

The problem with this is that your results might get skewed.

Because what works in one location might not work in another area.

So, you might have to do even more tests to get a winner for each location.

This is not the case with pay-per-click advertising.

It allows you to increase your daily budget and reach with a winning ad or display the ad not only on Facebook mobile devices but also on desktops, or in the case of Google AdWords, not only in the search results but also via display ads on different relevant websites.

This situation is similar to direct mailing, where you can just send out more winning mailers to the same zip codes or add more zip codes and extend your area of reach.

Conclusion

So, you can use time intensity, scalability, and testability.

For what?

To quantify different marketing methods to find motivated seller leads for real estate and thus find the 80/20 in the other methods.

But that’s not to say that the other two categories shouldn’t be done at all, but maybe not right from the beginning.

Once you can create winning campaigns in the least time-intensive, most scalable, and most testable category with all three separately or, ideally, complementing and synergizing with each other, you can move to the other more difficult categories.

Stay tuned for the next article because I will discuss how offline and online marketing methods can synergize.