Hi. I want to talk to you today about finding motivated vendors for your property purchases, when you’re investing in property.

Now, there are two types of vendors. There are motivated vendors in a down market like this, and there are distressed vendors. Distressed vendors are the ones who have to sell, no matter how bad the market, no matter what the conditions. They have to sell. They cannot hold on. They don’t have the luxury of riding it out.

So, divorce situations, mortgages situations, maybe deceased estates, where all the relatives are clambering around and the beneficiaries want their share here and now.

They are the ones who are going to put it on the market and just take whatever they get. But there’s another type of vendor who’s just as good for us as property investors – and that’s a motivated vendor.

A motivated vendor is one who has tested the market. They already know how bad the market is. They are feeling bad about having their property on the market for a long time, and they are very, very motivated to sell to anyone.

So when a property seller first puts their property on the market, they are excited. The agents talk them up. The agents tell them they’re going to get a great price. They’ve invested in a marketing campaign, they’ve cleaned the house, they’ve spruced it all up, and they’re expecting the best. They are probably even exceeding market expectations and thinking their house is so beautiful and it’s entitled to a really good sale price.

What happens then is over time, it stays on the market, and stays on the market, and the agent conditions them. Sometimes they have a buyer, and the buyer falls though. Sometimes, that happens several times. And every time, it’s open for inspection, and a buyer falls through, the agent says to them: “You know what? The market’s not there” Because, the agents are taught to make sellers lower their prices. So the agent is pushing them down.

In these situations, the agent is your friend. You are wanting to offer a deal that’s perhaps a bit more flexible, and this type of vendor will take it because they know they’re not spoiled for choice. They know that supply exceeds demand, and they’ll be grateful for any offer they can get.

So you can have things like longer settlements, smaller deposits, all sorts of flexible terms. The other thing you can do is lower the price, because the agent has been conditioning them for months to take a lower price.

So, look for properties that have been on the market for three months or more; the longer, the better. It usually means that the vendor is ready to move and will do anything and you can control the deal better and make an offer that suits you.

And be a bit cheeky about it. And don’t worry about it. The worst thing they could do is say no. Happy house hunting!