Eight Important Questions You Need to Ask a FSBO

You are looking for "don't wanters" that they just want out.  Your goal is to get those vital information as promptly as possible.  Remember that your time is even worth more than money or gold. Long discussions are only for properties that have some chances of working out for you.

Likewise, look at properties only after you have them under contract. In four hours you could negotiate over the phone on twenty-five properties but could probably visit only four or five within a small geographic area.  Let your fingers do the walking.  You  could gather more useful information over the phone without leaving your home by getting all the vital information you need if a certain property is even worth your time for a personal visit. 

And the nice thing about doing your phone screening first is you could have the means of screening multiple properties efficiently.  Work smarter not harder.

Of course, it would be good to know the basic physical description of the home like how many bedrooms, baths, living room, dining room, garage, laundry room, square footage and even the age of the home.  But knowing the financial situation and seller's motivation are your ultimate information you needed to know if there is a possibility for you to make a profit in buying a "FSBO" property.

The questions you would at least need to ask a "For Sale by Owner" are:

1. Just out of curiosity, why are you selling? Right from this question alone you could find out if you have a serious motivated seller or just someone who's just trying to fish for buyer or who is just trying to feel the market.

2. How much cash do you really "need" the day we close? Most seller wants more.  That's why you will ask them how much they need.

3. What are you going to do with the money? You are looking for an answer like: We are going to take part of the money and invest it. Give the seller the opportunity to invest in his own home at 10% interest. This is your third mortgage.

4. Have you already found the home you will move into?  Sellers will be more anxious to sell if they already bought another home because they will be stuck with two mortgage payment s.  A more pressing situation that would be to your advantage is for sellers who doesn't even want to get involved with remote property management.

5. How does your asking price compare with others in your area that are similar to yours and have sold in the last few months? This will give you the hint if the seller just pulled out a wild figure pricing his house.  Most sellers inflate their figures.  Who doesn't, the higher price more profits for them.

6. How long has your home been on the market? If their home has been on the market for more at least more than three months, reality have probably sink in that their home might not be a hot seller at all. 
    a. Have you had many offers? Another clue that could give you an idea of the competition and the appeal of the home.
    b. Why do you think it hasn't sold yet? Sometimes out of the blue they will tell you the real reason why it hasn't sold yet.  But it's possible that they will not disclose it completely because of their worry that it would drive away prospective buyers.

7. How much is now owed on the property? This is where you will determine how deep you got to dig into your pocket or even if you have to pull some resourceful ways of financing this property.
    a. Is the loan fully assumable? Is it FHA or VA?
    b. What is the interest rate?
    c. What are the monthly payments? Does that include taxes and insurance?

8. If I could get you all cash within the next ten days, what is the lowest amount of cash you would need for your equity? This interview process is the most critical aspect of qualifying property and sellers. After fifteen or twenty conversations you will find yourself comfortable and proficient with the questions and with the need to probe for in-depth and honest answers.

A final question you might want to always ask: Do you own any other properties besides this one?

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Are You a "First timer" or Just "Starting" Foreclosure Investor? Feel free to ask me by leaving your questions on the comments section below and I will personally answer your particular questions through the videos.

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