How to alk to homeowners in preforeclosures

Question

Hi  my name is Anthony Kondor  I am a residential re-developer and Investor and I want to start talking to homeowners that  are in pre foreclosure. I have phone numbers of homeowners who are in pre-foreclosure and I want to talk with them, and help create a win win solution for both of us.Is there any scripts I can download or any Podcasts on speaking with a homeowner and successfully negotiating a deal to buy their house to do a successful fix and flip project, thanks and please answer, all posts will get votes!

Darrell Shepherd · Answer

You aren't going to be able to find someone in preforeclosure a new house with your realtor license, they cant get the loan.

You better have a thick skin if you are going to call preforeclosures and say "I hear you are in foreclosure, can I buy your house for less than its worth?"  I used to work the hell out of that market and would even get some nasty calls from my mailers.  I know guys that door knock, though, so just depends on how big your balls are...

Like has been said, you probably want to back door your approach.  I don't know about now, but back in the day half the people going into foreclosure found out by their mailbox getting filled up with postcards.   You wouldn't believe how much some of them got, I'd see the stacks when I went in to close on buying them and they'd be in a stack on the table.  I'm sure thats gone down with the general lack of equity but still.

I tend to like them calling me instead of the other way around but if I were to call them it'd be more like "Mr. Jones, my name is Darrell and I'm a licensed real estate professional that works with investors in your area and they are looking to buy a house in (whatever neighborhood).  Would you be interested in selling if the right offer came your way?"   That'll probably get a "how much?" type of answer, to which you can get into several things depending on if you are flipping it yourself or trying to wholesale/list it.  If you're licensed, know your laws.

I'd probably say something like "well, that depends a lot on price, condition, and how fast you'd want to close.  I can cover all that on the spot if I saw the house, want to give me about 15 minutes of your time and I can tell you while I'm there?"

Actually in my case the last thing I want to do is drive over and look at a house unless I know I'm going to buy it, but if you are new its a good exercise to talk to sellers and make some rough repair estimates.  I'd personally be more direct trying to prequalify him.  "Not sure the amount, but I do know they can pay cash and close quickly if you are willing to sell at a price that works for them, if someone could put the cash in your hand within a week, what's the least you would take?"  (whatever they say is never the least they'd take) "is that the best you can do?"  (almost always a "I thinks so").  "OK, if someone wanted to get top dollar on a retail sale, what would it take to make the house perfect (key word)?"  I actually run the numbers on this and roughly estimate repairs.  I usually pretty much know my offer when I pull up based on ARV and what they told me, then adjust as I walk through.  I make an offer on every house I look at, 90% while I'm there.

Lots more to it than that and "scripts" aren't what I do when I'm on the phone because you are dancing around based on their attitude and responses, but that's the general line of attack I'd do if I was going to be calling people.

Jay Hinrichs · Answer

@Roy Schauer

having worked this hard for 5 years here in PDX.. I had a team of door knockers so I only came into the scene for the final close.

But from my perspective the folks were in denial.  Uncle henry is going to loan me the money to bail me out.. I am going to sell that boat in the driveway.. or back in the day you had the real Thieves the mod companies that would blanket the country ripping people off for 1 to 2k and promise help them but really do nothing but help them lose the house.. most based in FLA for obvious reasons. ( judgment proof state).

So to be successful at this I finally learned I only went to homes were the sale was within 1 to 3 days.. at that point they realize they need to deal with me.. and most of my competitors did not have real cash they were newbie wanna bee's who needed to wholesale or use a HML.. so that knocked down the competition plus they did not have the connections at the title co I had were I could get title done on the phone in real time. so I knew exactly were I stood.. and then could get 20 to 50k cashiers check and run a courier in person up to Seattle to northwest trustee services and redeem the day before the auction.  this is how you get deals.

And like OP have said.. by the time someone has gone through the process they have gotten 100's of letters and post cards.. with all sorts of Korney verbiage.. the One I like the best .. is the I was just like you line.. I too lost my house I too fell on hard times.. I am just here to help you blah blaH BLAH  ALL wholesaler guru rhetoric so when these folks get the exact same message almost verbatim they become desensitized to all these nice people that were also broke and just out to help them.

I came in the complete opposite.. I can in and said the opposite I had a letter of intro from my commercial bank backed up by REAL proof of funds.. so they know I was real. And then I performed.. usually renting back to them.. this is how you get the deals they don't want to move.. even if you bought it and gave them some money its not about that its aobut keeping the kids in school or the embarrassment of telling friends and family why I had to move... etc etc.

I only did this with properties that would net me at least 30k on a quick sale.. so I never also went the no equity route never saw the purpose in that.

then the anti stripping law s came in and in our states you can't rescue one in foreclosure and rent back to them its illegal.. you also must share a % of your gain if you resell in a specific amount of time.. now people violate the laws all the time but for me with big exposure it put me out of that model I Have not done it since the laws passed.

Jay Hinrichs · Answer

Chris T.  each state is different however CA OR WA were VERY proactive and early adopters of the crimes against those losing homes by wholesalers ( with bad intent).. ergo the laws.

what you ran into is FEDERAL law if you buy a courthouse steps with a tenant in place that has a legit lease and they pay on time you have to honor the lease you may not have known that when you bid.

when you buy sheriffs sales there is no equity skimming laws.. perfectly legal and acceptable to buy at court house steps.. Only risks are

1. long term lease that is valid and your can't liquidate if you wanted to

2. house gets trashed when they move out and you have no recourse

3. House gets stripped on the way out and you have no recourse

and many other potential pitfalls in the auction bizz

Roy Schauer · Answer

@Anthony Kondor your road is paved with good intentions, and from your perspective, why wouldn't the home owner want help, want some money in their pocket, relieve the stress, deal with you to make their life easier.  Your assuming they are being rational. Typically if they are in foreclosure, there is probably a lot more going on behind the scenes that your not seeing. Death in the family, divorce, job loss, etc...compound that with the deluge of creditors calling and mailing, not to mention the investors and realtors just wanting to help them in their moment of need and you start to kind of understand the people your going to be working with.

They are highly sensitized, bordering on paranoid, overwhelmed, stressed to the max and most have shut down and are burying their heads in the sand waiting for it to get better or fix itself.  Most people do not choose to live this way, it's a series of circumstances that has created it, whether by poor choices, life in general, random acts of god, or a combination of all of these.

Generally, there is a consistent lack of knowledge across the board.  They just don't know what to do, where to start anymore because it's just all so much to deal with.  I myself prequalify potential deals. I don't do mass mailing, I do targeted marketing to individuals who meet my criteria that I think with 90% certainty our company could help them. Being sincere and knowing when to stop talking and just listen is an invaluable trait. Once they do start telling you their story, your gonna get more than you bargained for because you just became their therapist in a way. They probably have been hiding what they have been going through from friends and family due to the shame and stigmatism that's attached to it all,  I have a fellow investor who is a realtor who's family owned a construction company. Things happened, work slowed, there was an accident that cost them too much money and then my friend was telling me his parents called the whole family together to let them know the bank notified them of their 30-day vacate because their property had been sold at the courthouse auction. The rest of the family knew nothing about this until that moment even though it takes about 6 months to foreclose on a property in our area.

I hope this gives some insight into what your looking to work with. Put yourself in that position and think about what approach would work to get your attention or make them want to deal with you versus all the rest of the work trying to get their attention.

Chris T. · Answer

I used to sell books for the southwestern company out of nashville, tn for a summer. Great experience for sales, but every student newbie has to memorize a script, and use that as a guideline. After gaining more experience, one will personalized their own approach. And i'm sure it is no different in the RE world.

Derrick Williams · Answer

@Anthony Kondor

What I have found out about home owners in pre-foreclosure is, most aren't thinking about selling. So you may want to start by giving them other helpful alternatives (Modifications, etc...). Build a rapport with them, THEN if all else doesn't work out , you will be in perfect position for the sale... Just a thought.

Chris T. · Answer

@Jay Hinrichs

Great strategy you have used in the past! Going against the masses and differentiating yourselves. Is this "anti stripping" law introduced to the majority of the country? I tried to google it in the state of IL but I can't find much that is related to real estate. Is there a legal term for it? The reason why I am asking is we bought a house through a sheriff auction. Long story short, the occupants of the house are not the previous owners but tenants' of them. Since we couldn't evict them the first time, we have proposed to sell the house to the tenants. And we have collected 3 months of rent from them while we're waiting for their decision to buy or move. Our mindset is instead of evicting them (after serving them), it is better to work with them. Use carrots instead of sticks.

I had asked Account Closed Did you find the script you were looking for? Sorry I kinda high jacked your post here.

Adrian Chu · Answer

If the house is in pre-foreclosure, chances are you still have to deal with a short sale situation?

Anthony Kondor · Answer

@Joshua Dorkin

I have the phone numbers of several homeowners in pre-foreclosure and I want to provide a win win solution, how can I Talk to the homeowners engage and be able to buy their house and renove and resell it , any scripts or dialogue I can use, Thanks!

Anthony Kondor · Answer

@Derrick WilliamsOk appreciate it but if the house has enough equity in it and If I can buy some of their equity and let them leave with cash and good credit , they can definetly find a new house and by me being a realtor I can help them with the search of a new house!

How to alk to homeowners in preforeclosures

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