Understanding the motivations of a distressed home owner is key to the lead conversion process. Reasoning will allow you to decide how to communicate but more importantly will give you ammunition when dealing with owner objections. You want to list their property, Right? Give them the reason! Part of the sales process is getting the potential client to consider things they have not considered for themselves. You accomplish this by communicating the advantages and benefits.
Motivation – the reason or reasons one has for acting or behaving in a particular way.
Remember your approaches will be different based on the 7D Theory category. Convincing an heir to sell their property because they have a lot of equity will be a more comfortable conversation. You will just need to communicate your marketing value proposition and how you can bring multiple high priced offers. A distressed home owner that is losing their house will require a different approach.
These are some of the motivations you can use when you are completing your exterior inspection reports for the DEATH or Probate category. These are the reasons our letters say there are serious consequences to just walking away.
All researched leads will have a generous equity position. This will always be one of the best
reasons to sell. You can’t take it with you. Rather than stare at four walls with empty pockets, they find it more financially expedient to sell and use the funds to pay off debt or other things. Property values have risen dramatically since the bottom of the market in the summer of 2011. This allows the decision maker or heirs to buy a home that fits their lifestyle better. So they cash in, taking advantage of appreciation in property values.
Tax Benefits (Single Spouse)
Generally, our probate research will find properties where both the husband and wife are deceased. In Florida and Georgia, single spouses who sell their primary residence will generally not be required to pay capital gains tax on the first $250,000 of profit generated by the sale. Spouses filing a joint return may exclude the first $500,000 gained from the sale of their home. Avoid giving sellers tax advice as it is illegal for a realtor to do so. Always refer them to one of the Eureka Team’s probate or tax attorneys.
Empty nesters can really benefit from selling while rates are low. It’s freeing to sell a large home, pay cash for a smaller one and invest the rest for your retirement. – Dave Ramsey
Tax Benefits (Inherited Property)
If you inherited property you probably won’t have to pay taxes in Georgia. The basic exemption on inherited property is taxed at $5M so most properties won’t pay estate taxes. Inheritance taxes are different from estate taxes, which are collected by the federal government. The heir will have to pay capital gains taxes. However, you will only have to pay capital gains based on (the stepped-up basis) the difference between the selling price and the current appraised value The original amount that the deceased owner paid is not considered. If you take a loss and sell the house for less than the appraised value, then you can actually deduct the loss (up to $3000 per year) and avoid paying any capital gains tax. This is why an appraisal is so important. Again, avoid giving sellers tax advice as it is illegal for a realtor to do so. Always refer them to one of the Eureka Team’s probate or tax attorneys.
Downsizing a home is a key reason why empty-nesters move. The children have gone to college and moved out, and now the parents want a smaller place. Understanding the age of your decision maker can help you to decide your approach. Physical ailments make it difficult to climb stairs, walk long distances, clean their pool or complete their own landscaping. the older you get, the harder a big house is to maintain, and the better an apartment or townhouse looks: And since refitting can be expensive, it’s often more expedient to move to a place with a preferable layout or a condo complex with a maintenance staff. When one half of a couple dies, the survivor often finds the home too big or too full of sad reminders to remain there. Maybe grown children find the familial home impractical to keep after their remaining parent goes.
Continued maintenance and update of a property can be expensive. Some home owners do not want the hassle or expense of putting on a new roof, replace the siding, or buy a new air conditioning unit. This is another great reason to recommend a Eureka BPO (aka Appraisal) Your appraisal will give the decision maker two different vales. The first value is called the AS-
IS value and second is the ARV or After Repair Value. By doing this analysis, the decision maker can better decide if they want to invest additional money to get a higher price. Maintenance issues are good reason to bring up with older empty nesters. It could be easier to buy a newer home. When you figure the life of most residential infrastructure is about 15 years, it could make sense to get out before it’s time to spend big money.
Take Advantage of a Good Market
Discuss the high demand in the Alpharetta area as well as the “Shift” with the decision maker using market analytics. The average home price is up a whopping 38% in Alpharetta since the market bottomed out in 2011. The area has experienced (on average) a solid 6% growth over the last 3 years. However, in the last 6 months prices have decreased 4%. Prices cannot continue to go up and we forecast a leveling off soon. Demand is still high in this area as the median home price is contracting in 32 days. Now is a great time to sell and take some of that money off the table by maxing out at the top of the market.
Note: Decision Makers don’t have to Claim the House If They Don’t Want To
Even if you’re supposed to inherit a house, you may decide that you don’t want it. If the mortgage is underwater, meaning that the amount owed on the house is greater than its value, you may be better off letting the house go into foreclosure. The decision maker should disclaim the property. This is why research specialists will not submit probate leads that are underwater.