How to Screen for Quality Buyers In Your Wholesale Real Estate Business
One of the most important aspects of your real estate business will be to have a list of quality buyers. The effort you put into building your list of buyers should be taken lightly. Remember, the buyer is your bank and the key to your success in real estate. So what do you ask a potential buyer to make sure they are “quality buyers?” Here are a few important questions to ask. The more qualified your list of these people, the faster you will close deals without headache.
1. Are you able to pay with Cash? In real estate Cash is KING. The more cash buyers you have on your buyers list, the more money you will make. This should be question number one. Of course many buyers will tell you they have a line of credit or that they will be borrowing the money but nothing comes close to the ease of working with a cash buyer.
2. Can you put down an earnest money deposit? This is important because it shows your buyer is more than a “tire-kicker”. He/She is a player and is willing to put up some of their own money to prove it to you. Many deals are lost because of broken verbal promises. This question eliminates that issue.
3. What profit margins are you used to dealing with? The truth is, some buyers are going to be more greedy than other buyers. As an investor, you are trying to make money while at the same time leaving a good amount of profit on the table for the buyer. If you know where this person stands on how much profit they are willing to give up to you, you can then negotiate with the seller confidently and accurately predict how much money you can walk away with.
4. What kind of properties do you like to buy? If you deal in lower-end properties then having a buyers list of luxury home buyers seems pretty silly doesn’t it? If you know the types of houses your buyer prefers to work with this will further save you time and certainly close more deals. You can segment the list and really save yourself time and headache. These four questions alone will help you begin to have a list of hot prospects who will eagerly snatch up your deals when you have them available and give you the least amount of unforeseen issues.
If you want to learn more about real estate investing and “The REI Lifestyle,” please visit Wholesale Real Estate, then visit Michael Kimble’s blog at Wholesale Real Estate blog.
