Zillow "Pre-foreclosure" status

28 Replies

Zillow is showing a home in the neighborhood next to my primary residence (literally one tenth of a mile away) in "pre-foreclosure" status. It states the loan is in default and even gives the foreclosure attorney's name and number. However the home is well kept with the grass cut, no for sale sign in the yard, and it seems the owners take pride in the appearance (decorations on the front door). Does anyone have experience with the pre-foreclosure listing in Zillow? How reliable is it? Is this an opportunity for me to jump on a distressed property before it gets to market?

@James Palassis Most, if not all counties in the US require a filing of Notice of Foreclosure if there is to be a foreclosure. You can look on-line at your County Records and see what has been filed. Some states like Texas are move privacy oriented and you have to work harder, but it is still public information for various reasons too complex to go into here. Also, most states have a Foreclosure Trustee that maintains a list of pending foreclosure you can call. Keep in mind, the owners can "cure" the default before the sale, sell the house, file a bankruptcy to stop the sale, do a "deed in lieu", sell privately, pay off the loan completely, do a loan modification with the bank. Just knowing of a potential foreclosure is simply the first step. There may be other loans or IRS liens or unpaid property taxes or a pending lawsuit. I've done these for decades and have made a lot of money on them. But, you really need to know what you are doing. It is all learned information.

I'd go say hello, im here in los angeles area and i have a property radar membership, which i use to door knock. they only give a bit more info, the advice from @Account Closed about on-line county records might be good, but im from north carolina and if there anything like south carolina & what im used to might be behind the times with online records. maybe have to do some digging in person. I would say they neighbor route is a good intro if you go over to feel them out, and then brushing up on there options so you can offer to help or atleast explain the many options they have is how i go about the awkward situation they may be in. just my 2 cents.

I have looked into this a little and it has been a dead end.  In my small town there were 2 I tried to get more info on.  The first, I left a note in the mailbox and the owner called me - they had already lost the house and moved out.  The property was foreclosed, went to online auction evetually but I couldn't get in touch with anyone to make a realistic bid based on condition of the home... The other property went into "pre-foreclosure" status about 2 years ago and the bank just listed it at a ridiculous price.

Not a bad idea to reach out to the owners or whomever but I wouldn't hold your breathe. :)  

I call pre-foreclosures 4 times a week and it's a numbers game. You need to talk to quite a few before you can expect results. Many either pay off the debts or do a loan modification and restructure the debt so the house doesn't get foreclosed on. Since Los Angeles is appreciating most people have equity to refinance and save their house. 

When calling them I am straightforward and honest. I tell them I'm an agent and offer them a backup plan in case they need to sell their house. I have investors that can provide them cash offers or I can help them get top dollar by listing it on the MLS.

It's worth a try to give them a call or door knock. You might get lucky and land a deal! Tell them you want to buy their house for cash and see where it takes you.

And then there's the issue of homeowners suggesting that Zillow lists false foreclosures. Don't know how often mistakes happen, but I'd be curious to know. I was checking properties for sale in Reno, Nevada, and was surprised to see the sea of blue dots indicating distressed properties. Bubble 2.0?

Right now my home is categorized as pre-foreclosure in Zillow with an estimated foreclosure amount that is over $1m.  In reality, I have a business loan against my home that is in default as a result of pending litigation related to a business venture.  I dont have a first mortgage...  The bank filed a complaint against me for about $180k as the litigation plays out - which is their right.  I wouldnt have know that the info displayed in Zillow is off the wall if it didnt happen to myself.  

@Chris V. - @Nick C. is correct. Most 'cash' buyers are using OPM - Other People's Money. That is either hard money or private money and not conventional loans that take 30 days to close with financing and appraisal contingencies.

@James Palassis - I'm game if you bring the cash! Come on over to LA and we can find some buyers!

If anyone wants to literally bring cash to someone's house to give them an offer in the Los Angeles area, I'll gladly door knock with you! I door knock 600 - 1000 houses a month. I wouldn't mind doing targeted door knocking on some Notice of Sales where the house is getting close to auction. I can pull the list and you bring the cash!

On topic, I have wondered the same things about these "pre-foreclosures" in my neighborhood. Guess it doesn't hurt to ask to try to contact the owner and ask.

I saw one with a yellow paper on the front door for like a week, house is well maintained, looked it up in county tax records, and it appears to be the owner's primary residence. I planned to mail her a letter expressing interest in buying her house. Just didn't think she'd like me walking up and asking. Is this something I just need to get over? Do you have key phrases you use in conversations while door knocking, to keep from getting doors slammed on you?

@Art Ritter - LOL! Knock in the Hollywood Hills and you can probably get all kinds of 'illicit substances'. Probably easier to get then houses! I just hit 63 doors today and only 1 possibly buyer referral.

@Chris V. - If you want to do buy and holds through an agent then don't worry about it. If you want to find deals yourself then you might want consider going that route. You can spend a lot of $$ on marketing which takes a long time, but is great leverage of your time. The more aggressive option is to cold call and door knock. It will save you a lot of money but it takes a lot of time and effort. It's a great character building experience! I don't have a sales background so it was really tough for me in the beginning. The first day I went door knocking (with my mentor), my palms were sweaty and I was incredibly nervous and absolutely terrified of the rejection. 1000s of doors later I knock with a smile on my face looking forward to help solve someone's problem.

I actually tried to buy in cash one time. Title company wouldn't do it. Stupid AML laws and big government IRS BS.

I also closed a bank account and said I want to cash it out. They asked me where I wanted it wired. I said "no. Cash". They said they'd do a cashiers check. I said "no. Cash". I had to wait 3 days and go in before they opened.

Government loves the idea of cash going away.

For the ones experienced with door knocking preforeclosures, how would your typical conversation go? What would you ask and how would you address various problems?

Is there a podcast that covers this topic? 

What are the chances of buying a preforeclosure with a VA or FHA loan?

@Nick Hedberg I would love to pick your brain about knocking on 600 - 1000 doors per month

  1. How many doors are you doing per day? 
  2. What times and days are you knocking?
  3. What would you say is your "door knocked" to "door answered" to "listing" ratio and what is your "door knocked" to "door answered" to "wholesale/flip" ratio (example 1000 doors knocked, 300 doors answered, 1 listing, 1 wholesale)
  4. Would you mind sharing your script with the forum?

Thanks in advance!

@Shariyf Grevious - No problem, answers below.

  1. How many doors are you doing per day? 30-80. My record is 100 in a session and you will be exhausted!
  2. What times and days are you knocking? The best time to door knock is whenever you are free. Just get out there and knock on some doors (as long as it's light out...). Personally I like to go between 4-8 because people are generally getting home from work. Roughly 30% of people are at home any time of the day.
  3. What would you say is your "door knocked" to "door answered" to "listing" ratio and what is your "door knocked" to "door answered" to "wholesale/flip" ratio (example 1000 doors knocked, 300 doors answered, 1 listing, 1 wholesale).
    1. Door knocked to door answered: 20-35%
    2. I go by leads and I as an agent I generally get at least 1 lead per 50 doors. Once I've knocked an area multiple time I'm closer to 1/30 that might convert in the next year. I'm also knocking in hyper-competitive areas like Venice, Santa Monica and the Del Aire area of Hawthorne. 
    3. Other comments: I do geographic farming (knock ever door in the neighborhood) and targeted knocking (NODS, NOTS, affidavits, divorce, etc.) I've noticed you will get a much nastier response from the targeted groups and maybe 10-15% open their door. They are being knocked, called and bombarded by people that want to buy their house. Keep your head up and don't take it personally.
  4. Would you mind sharing your script with the forum?

My agent script:

Me: Hello, I'm Nick Hedberg, your Venice neighbor and local real estate agent. Here is a local market update (hand them update) and I just wanted to see if you have any questions about this crazy real estate market.

Them: No - I don't want to sell (Yes, they say they don't want to sell even though I didn't ask them)

Me: I understand (step back and throw my hands in the air)! I live here and I'm not selling either. WHO do you know that might be looking to sell in the near future?

Them: (No one or starts talking about neighbors)

Based on their reaction I'll either ask how long they have lived in the neighborhood to continue the conversation or offer referrals and end the conversation. It's a numbers game and it's rough at the beginning. Build your confidence and expect to knock on a quite a few doors before you get leads. Name of the game is follow up. Don't expect to buy a house while door knocking, aim to get their contact info and set an appointment to come back. Follow up, follow up, follow up!

After you have knocked on the door take a step back and don't crowd the door. Stand at a 45 degree angle and let them get a look at you through the peephole. Smile. Wear lighter or pastel colors to appear less intimidating. Wear a name tag and look professional. People are terrified of being robbed or scammed. Once they have opened the door take a small step back to give them space and make them feel comfortable.

The key to a script is finding something that works for you. Read a bunch of scripts and figure out what you like. Find a way to add value and build rapport. Leave a flyer or a value add with them. Let them get a couple "No's" out of their system. The answer to the first question is almost always "No" regardless of what you ask them.

Originally posted by @Cody L. :

I actually tried to buy in cash one time. Title company wouldn't do it. Stupid AML laws and big government IRS BS.

I also closed a bank account and said I want to cash it out. They asked me where I wanted it wired. I said "no. Cash". They said they'd do a cashiers check. I said "no. Cash". I had to wait 3 days and go in before they opened.

Government loves the idea of cash going away.

 I would never walk around or get into my car with that kinda money that's crazy man! I have never had that much more bet 10k and I was scared with it in my pocket up north when I went bought my new to me truck.