Being focused on real estate investments, you are probably already aware from past experiences working with motivated sellers that letting go of a home that holds deeply personal and emotional memories can be difficult. However, an emotional attachment to a home can actually lead to more dire circumstances for sellers, reports ZipRealty agent Stephanie Friend. In fact, “If a family has an emotional attachment to the home,” she says; “It’s even less likely to see for what the owner thinks it’s worth”[1]. While this may be a red flag for real estate agents who are hoping to successfully sell the house at a good price in the traditional market, emotional attachment can actually be a positive indication for real estate investors hoping to get a good deal on a distressed property because emotionally attached sellers are more likely to “hold out” for top dollar or even more than top dollar because they cannot bear to let the home go for less than they feel it is worth.
Additionally, explains VP of marketing and technology at Long Realty Kevin Kaplan, if a price is set too high at the beginning of the sales process, sellers will lose out on many prospective buyers who, along with their agents, are more likely to pass over the property simply because it appears unreasonably out of range. Again, this is bad for the seller and a red flag for the agent, but may lead to a better situation for an investor interested only in distressed properties because ultimately that house will not get the interest that comparable properties will garner. This leads to longer times on the market, which is one of the main things that many wholesale “gurus” teach their students to look for when they are scouting for properties because it indicates that the homeowner may be getting desperate to sell and willing to accept a discount.
When you encounter emotionally-attached sellers, do you steer clear or move in to investigate the opportunity?
Thank you for reading! Your comments and questions are welcomed below.
[1] http://azstarnet.com/real-estate/article_29e8462a-504c-592a-a2e3-c73fb0acf2f6.html
I have found it depends on their first few comments. Some it is best to immediately walk away and let someone else beat their head against the wall. Others a person can make a reasonable deal with and everyone will come out okay and you will not have some idiot talking poorly behind your back, destroying what you have worked hard to create. Reputation is very important and attempting a deal with someone that is going to work at destroying your reputation is worse than any gain you might make from the deal over the long run.
Sour sellers are best left to their own devices, ones looking to be benefited are plentiful and add to your reputation instead, creating more business for you in the long run.
A good example is some sour minded person on another post of Bryan’s calling for the imprisonment of all the bank CEOs and closing the banks. Stuff like that leads to anarchy and they think they are doing people a favor by poisoning the waters. Instead they only make everyone’s life miserable and bring everything to a standstill because of their own ignorance.
So if the Red Flags pop up, run the other way, over time the Flag may turn greener, but if it is one I have found to be Red earlier, I still walk away, reputation is too important to squander for a few dollars and they will always blame your for their own short comings in life.