When are short sale leads "ripe" for picking?

Question

I have been looking for short sale leads from a foreclosure lists website. The company I am scouting for believes in visiting the houses in person, as these people are already getting plenty of mail and phone calls. For my first day of visitng properties from the list, I visited the properties that had been on the list the longest, figuring they were closest to foreclosure. These leads were from January. However, most of these were vacant (I assume the website didn't update when properties had been foreclosed on already).

What is the best age of these pre-foreclosures to try to begin a short sale? I was thinking of going for ones from April next, because those are approaching 90 days. Any thoughts? Thanks

Dave P. · Answer

DJ,

What is the purpose of your visit? Are you meeting the home-owner to offer a solution via purchase of their home?

If that is the case, then I wouldn't over think it. I would focus on talking to as many people as possible regardless of "age" of list. I would look to find as many homes in an easy to work area and hit the dense areas first. It is a numbers game, the more people you talk to, the better chance you have of finding a win-win situation. The less driving or walking you have to do, the more you can talk to.

Good Luck.

David Diaz · Answer

djdemers,

This is a tough question to answer. Reason why is there could be multiple answer for that question, the answer depends on what are the state law in regards to Foreclosure. Each state has different time frames in where the bank foreclosures on a property. So you should check your local State laws to see what time frame a homeowner has before the property is foreclosed on. You want to give your self at least 30 days to do a short Sale before the auction. For example in the state of Illinois we have a about 9 months to work a short Sale. Thats the time frame from when a Homeowner misses their first payment to when the house goes to auction. After it goes to auction they have an additional 15-30 to redemy the property.

The more time you have to work the short sale the better. Also the closer you get to the auction the greater the chance the bank will want to negotiate with you, especially if its a Sub-prime mortgage.

Account Closed · Answer

Spencer, since you are knowledgable, could you explain: is it worthwhile to: 
1. Contact a pre-foreclosure owner who has a 1st and 2nd.
2. Get them to sign the necessary paperwork allowing you to contact the lenders.
3. Contact and pay off the 2nd to create some equity.
4. not be able to deal with the 1st for the short sale, but convince the 1st to reinstate the loan, and buy the deed sub-to.

Does that make sense? I was thinking of ways to go into a short sale without having to get a loan. Thanks, Mike

Spencer B · Answer

By far the easiest way to find where the owner has moved to is to mail them a postcard with "return service requested" via USPS.  USPS will return the postcard to you with a sticker showing their new address.

Generally, the best short sale deals are those with 2 liens @ approx. 100% CLTV.  Short (or buy) the second for pennies, and create your equity there.  If you can short the 1st as well, icing on the cake.

In reality, the best deals are those with the best BPO's, which generally make or break any short sale deal.

Account Closed · Answer

Just because they are vacant doesn't mean they have foreclosed already. In my area owners frequently decide to bail out, and walk away from the home. I look up the tax assessor website and see if they have a change of address listed, and also look them up on 411.com or whitepages.com. and then see if they will work with me. Good luck, Mike

When are short sale leads &quot;ripe&quot; for picking?

When are short sale leads "ripe" for picking?