Most real estate investors have no idea what their time is truly worth. One of the most common mistakes investors at all experience levels make is wasting time with unmotivated sellers.
If you make an average profit of $20,000 per deal, how much is your time worth? The sooner you learn how to quickly get rid of unmotivated sellers, i.e. time waster, the better off you will be. For simplicity sake, let’s break Seller leads into 3 categories.
1) Slam Dunks
These are leads which have two important ingredients. First, the seller is very motivated. Second, through your creative problem solving strategies, you can help the seller and still make a profit.
2) Worth Following Up With
These are leads which don’t meet your buy criteria for one reason or another, but could in the future. For example, if the seller is only one month delinquent on his mortgage payment and has some equity, but just isn’t very motivated yet. Even though the seller doesn’t want to sell at a large enough discount to make this deal attractive today, he very well may in a few weeks when the mortgage company files for foreclosure.
3) No Deal
These are leads that just aren’t worth your time to follow up with. For example, a seller with no equity and a week before the house goes to auction. Instead of pursuing a short sale you decide this deal is just not worth wasting time on.
If you want to be successful in this business you absolutely cannot afford to not pursue the first two types of leads listed above. A follow up system of some sort is necessary for you to succeed. I typically follow up with sellers at crucial dates based on their situation. For example, a couple of months ago I put a house under contract that I had been following up on for 4 months. When the seller first called me after seeing my Lucky Buys Yucky Houses® infomercial on TV he was only 2 weeks behind on his mortgage payment. He just liked the commercial and called to “test the waters”.
After speaking with him I quickly realized that he was not motivated enough yet to sell me the house at an attractive price. However, I knew that there was a good chance he would be soon. So, I followed up with him in 3 weeks and then again in about 6 weeks.
Finally he realized he was in a bad position and I negotiated a nice deal. I helped the seller to avoid foreclosure and walked from the deal with a $14, 397.00 pay check.

If I would have just walked away from that seller the first time we spoke I would have never made a dime. However, I made a few phone calls and ended up making almost $15,000.00.
Now revisit the question I asked earlier. How much is your time worth if you can make these kind of profits from a few simple phone calls?
This is why it is absolutely imperative that you have a system in place to quickly eliminate time wasters i.e. no deals.
To determine what is a deal vs. what is not, I use a pretty simple formula.
1) Determine the approximate value of the seller’s house
2) Find out what they owe
3) Ask the seller what kind of work needs to be done to bring this house up to perfect market condition. Note: this is an area where the more you can probe the better, because sellers tend to get in a better mind set to take a discount after thinking about the headaches of making repairs to their house
4) Determine how much I can resell the house for if I were to purchase it
From here it’s a pretty straight forward process. I simply subtract the repairs to be made from the value of the house and then subtract the amount to be paid to the seller. This leaves me with my potential profit.
Granted, there is more that goes into the process if you are going to end up turning the lead into a deal, but this simple formula saves me a ton of time. I can at least get a very good feel for where the seller is mentally and whether the lead is worth pursuing.
By getting the answers to these 3 questions I can usually get a real good idea if I should stop wasting time with the lead or keep pursuing it. If I feel the lead is a “slam dunk”, I sign it up right away. If not, I investigate further and then either a) sign it up or b) put it in my follow up file.
I believe in the KISS formula (Keep It Simple Stupid). With the system I use to generate motivated seller leads, I simply get to many leads to waste a bunch of time with unmotivated sellers. If I get 500 leads in a month and I am busy driving around and talking to sellers who aren’t motivated enough I will go broke. This is a lesson I learned real quickly when I started using mass media to advertise. It would behoove you to learn this lesson quickly as well. Your real estate success depends on it!

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