How do you advertise for people in foreclosure

Question

I am wanting to advertise to people that have been getting letters from their bank that they are going to foreclose on them and I want to talk to them before  a NOD if filed.

How do you advertise to these people?

Bill Gulley · Answer

First, pre-foreclosure is something new folks in RE need to stay away from due to federal law. You're not the only one Chip, what I see on BP is that, at least from the way many newbies talk (including guru types) is some insistent disregard to caution. I guess that comes from being desperate or lack of knowledge, or both.

So, for those hell bent in getting involved in an area they have no clue about;

Don't target advertising at folks in default, advertise as if you had no clue that someone might be having difficulties. People know if they are in default, if they see what might be an opportunity to get out of a foreclosure, they will be more receptive to simply saying "I buy homes".    If you even imply that you can "help" someone in or to avoid foreclosure without the proper license you're in violation of federal law, that can be a $100,000 in fines and/or 10 years in some freaking federal prison.

In a small town, like Ft. Smith, you can simply "brand" yourself as a problem solver dealing in RE, situations of thin equity or getting people out of paying a mortgage.

I realize this area seems like easy pickings, it's not, as after notice, you need to move quickly, you need to know what you can say and what not to say and gurus don't teach that nor do they even know. If they mention the issue, don't address the matter as if you know something, other than you understand that they need to sell.

The thought is that you can get equity, that really is a rare transaction in reality, it's not as lucrative as the gurus sell it to be.

The real estate side is not the whole side of dealing with these people, it is as much about lending laws, credit laws, collections, mortgage administration, foreclosure law and an understanding consumer credit issues as it is about the property. Which is why newbies and probably 90% of any residential investor doesn't have a clue about the full spectrum of what needs to be recognized and that's 120% of all newbies.

If you must go there, get a HUD Credit Counselor's license, your other option is the get a law degree and pass the Bar.

:)

Simon Campbell · Answer

I agree with Bill Gulley here. Your target audience are people who already feel like a personal failure. Having a stranger approach them and basically rub their nose in their failure - even if it is simply stating that you "know" - you are going to get more doors slammed in your face than grateful sellers.

Simon Campbell · Answer

The problem with a short sale is that it will trash a person's credit similar to the actual foreclosure. I do not believe that most homeowners understand the impact to their credit when they chose the short sale option.

John Quebedeaux · Answer

Short sales is a better way to go

John Quebedeaux · Answer

He means Bankruptcy

Jennifer Talcott · Answer

Hi Lamar,  What does "BK" mean?

Lamar Tisdale · Answer

@Bill G.

I am a licensed realtor in South Fl. and have personally completed 17 short sales myself for individuals within the past year and i'm currently working on three more that want to avoid foreclosure.

Some came from DM which I do monthly so do you think that I may be in violation as a licensed experienced short sale real estate agent.

I discuss/inquire all options with the seller ie loan modification, foreclosure, short sale even BK if they qualify.

Most sellers once educated on there options and those that don't qualify for loan modification's choose the short sale option as there best exit strategy. Especially if they want to avoid foreclosure and qualify for relocation funds.

I do not mention foreclosure in my DM but I do disclose that I'm a licensed experienced SHORT SALE Agent and my services are always FREE!

Simon Campbell · Answer

That is so true. If there was sizable equity in foreclosures, then the owner would have been either able to refinance for a better rate or sell the property quickly to get out from the debt. Often foreclosure properties are close to underwater. When you add on the penalties, added interest, late fees and attorney costs - it often quickly exceeds market value.

Frankie Woods · Answer

Great discussion guys, thank you!

Bill Gulley · Answer

Simon, that's a good point!

Even the psychology of dealing with such folks takes a bit or experience, initially, they may appear to be motivated sellers, they usually take on other attitudes or personas after the initial contact. They are distressed and it takes a bit more than salesmanship or whizbang talk to carry them to settlement, if you can actually get them there. It's just not a place for newbies to start out as these types will often seek others to blame for their misfortune as things progress. Generally, while they may be motivated to get out from under the problem, they are not going to be happy with the outcome. Since federal laws have been enacted to protect these types of sellers, the risk of having some issue or complaint has increased to a point where it requires a more sophisticated and guarded approach in dealing with with these matters, newbies just can't go there. The skills required go beyond acting as a buyer of a property, getting into credit counseling, explaining what options they may have to save face, or moving on financially with their lives. If they feel they got the wrong advice or a price that was too low, they have recourse to make claims against the dealer/operator...it's just not something newbies should get involved with regardless of the perceived profits that may be had.

And in reality, usually there isn't a greater profit to be had, most are marginal deals. So for the risk and the potential profit, pre-foreclosures are not what they appear to be. :)

How do you advertise for people in foreclosure

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