Cold Calling Pre-foreclosures

28 Replies

Hi Everyone,

I'm cold calling pre-foreclosures and I'm having a bit of trouble with my approach.  At first, I was approaching them as a real estate investor that buys homes for all cash and etc, but I noticed that I would get a hard no, not interested, or a hang up. After that, I would ask about their pre-foreclosure then they would say they got it handled then that's that. I did find that a few would talk a bit more so it looks like I'm going in the right direction. I really want to perfect this skill.  I was wondering how you all approach your pre-foreclosures when you are cold calling or door knocking?  Any good examples of investors speaking to pre-foreclosures?

Thing is these people get called at least 3-4 times everyday by people wanting to do the same thing. 

Can you post your script? From there I can tell you exactly what to change and how to approach it. For example, are you saying Mr. LAST NAME or calling them by first name? This makes a big difference

Right now, I'm just saying: Hi, may I speak to _______ (Mr. Last Name)? ( homeowner response), My name is Gi'angelo from Demiurge Investments.. we are a real estate solutions company.. and I was calling because I saw that your property at 123 Main Street had a pre-foreclosure a month ago. I was wondering how we can help you today?

Most people that are losing their homes initially want to keep. Typically they want one of the following things to " keep their home, get more time, get money, or reduce liabilities ". Find out what their goals are with their property and then it all comes down to building rapport and educating them. Most people that want to keep, can't keep, and end up becoming sales down the line. If they can keep then so be it, we want people to keep their home if that's what they want and if they can.

Take a lot of rapport building, educating, and at times hand holding to nurture and structure these type of leads/transactions. 

Reach out anytime, happy to see how we can support one another.

It would be a blatant bait & switch tactic, but I would imagine that if one were to approach these folks with a solution to help them stay in their homes, they would at least talk to you -- for a while, until they figured out that whatever solution you propose involves selling the house.

Has anybody had any success reworking these debts and keeping the people in the homes, even if they are renting for some period of time?  

I realize that is pretty dicey, when somebody is already behind, but if there were even a 10-15% cross-section of the people to spoke that could actually meet certain criteria, then you wouldn't be totally misleading anybody.

Hmmm, you would also want to be really careful that you aren't out there 'originating mortgage loans' or doing something that requires a license, something regulated.  But perhaps there is a service out there that does do this, even if only for a small subset of the folks we would be talking to -- you could hand the leads off to them and let them do the initial screening.   

And heck, suppose a few people actually get helped out..!  Would that be a bad thing?

I think the reason most of the people being called are so reluctant is that they are assuming everyone is trying to scam them.  Maybe you start with some honesty about the subject and try to make it seem like part of your goal is helping people in their situation.  I'd do something like 

"Hi, my name is (your name here) and I work for (your organization) and we're in the business of trying to help people who might be having troubles with their mortgage.  We aren't asking for a ton of information up front but if you could answer a few basic questions for me, maybe we could see if we'd be a good fit for your situation.  "

I think if you follow that up with the sincere desire to help the individuals you'll find yourself very successful.  If you make yourself believe you're in the business of helping people it should help you to sound more like what they guy/gal on the other end is hoping to hear.  

@Gi'angelo Bautista I like to ask them If they have resolved the situation or not? Because they will almost always say yes and allows me to keep them on the phone and talking. I then ask how they resolved it and immediately ask if the bank helped them. That usually triggers their resentment towards the bank and gets them going and end up telling me they have some options but nothing concrete. I always just let them know that i can provide a FREE no cost evaluation of their situation if they can just give me some insight as to what got them into the situation their in.

@Sall Castaneda 

I really like the replies in this post especially yours..... I'm in the NYC area and Pre-foreclosures are everywhere.. quite sad actually.

It Makes perfect sense to go into it trying to keep people in their homes...This would mean fully educating yourself in the area of pre-foreclosures  and the options available to them because most people are not aware of the little things they can do to protect themselves..

As one who has been through pre foreclosure, I can tell you that your approach will probably get you a hang up. Luckily I was able to get through this on my own, but I did hang up on many who called. To me, they were "vultures"... even though you are not a vulture,that is the mindset of those who are in such financial difficulties. After all the "tricks" of debt collectors, people in pre foreclosure are suspect of anyone who calls. Do not ask "what can I do for you"... TELL them what you can do. Do not ask for personal information. Do not ask for financial information. Just don't ask. You have all the info you need. They are in trouble and you can help them. TELL them that first. Explain what you can do to help them KEEP their house...or buy their house and give them an extra ten grand after the bank is paid off. They aren't stupid, they want the facts. Do not start your conversation with questioning them, start your conversation with how you can help them, and be specific. Hope this helps

Originally posted by @Karen R. :

As one who has been through pre foreclosure, I can tell you that your approach will probably get you a hang up. Luckily I was able to get through this on my own, but I did hang up on many who called. To me, they were "vultures"... even though you are not a vulture,that is the mindset of those who are in such financial difficulties. After all the "tricks" of debt collectors, people in pre foreclosure are suspect of anyone who calls. Do not ask "what can I do for you"... TELL them what you can do. Do not ask for personal information. Do not ask for financial information. Just don't ask. You have all the info you need. They are in trouble and you can help them. TELL them that first. Explain what you can do to help them KEEP their house...or buy their house and give them an extra ten grand after the bank is paid off. They aren't stupid, they want the facts. Do not start your conversation with questioning them, start your conversation with how you can help them, and be specific. Hope this helps

 In California, if you do or say any of the suggestions above, I'd highly recommend also providing them with a copy of your California Foreclosure Consultant State License, which would be required.

Ron S., why would I need a license to say "I am willing to buy your house as is and you would walk away with ten grand"? Why would I need a license to tell them I can help them? Why wouldn't I need a license if I were asking them what their financial situation is? Why wouldn't I need a license if I am asking them personal questions? I simply stated that if you don't want a hang up on a cold call, then don't start your call with questions, start your call with solutions.

Originally posted by @Karen R. :

As one who has been through pre foreclosure, I can tell you that your approach will probably get you a hang up. Luckily I was able to get through this on my own, but I did hang up on many who called. To me, they were "vultures"... even though you are not a vulture,that is the mindset of those who are in such financial difficulties. After all the "tricks" of debt collectors, people in pre foreclosure are suspect of anyone who calls. Do not ask "what can I do for you"... TELL them what you can do. Do not ask for personal information. Do not ask for financial information. Just don't ask. You have all the info you need. They are in trouble and you can help them. TELL them that first. Explain what you can do to help them KEEP their house...or buy their house and give them an extra ten grand after the bank is paid off. They aren't stupid, they want the facts. Do not start your conversation with questioning them, start your conversation with how you can help them, and be specific. Hope this helps

Originally posted by @Ron S.:
Originally posted by @Karen R.:

As one who has been through pre foreclosure, I can tell you that your approach will probably get you a hang up. Luckily I was able to get through this on my own, but I did hang up on many who called. To me, they were "vultures"... even though you are not a vulture,that is the mindset of those who are in such financial difficulties. After all the "tricks" of debt collectors, people in pre foreclosure are suspect of anyone who calls. Do not ask "what can I do for you"... TELL them what you can do. Do not ask
for personal information. Do not ask for financial information. Just don't ask. You have all the info you need. They are in trouble and you can help them. TELL them that first. Explain what you can do to help them KEEP their house...or buy their house and give them an extra ten grand after the bank is paid off. They aren't stupid, they want the facts. Do not start your conversation with questioning them, start your conversation with how you can help them, and be specific. Hope this helps

 In California, if you do or say any of the suggestions above, I'd highly recommend also providing them with a copy of your California Foreclosure Consultant State License, which would be required.


 

How do I become a California Foreclosure Consultant?

Originally posted by @Karen R. :

Ron S., why would I need a license to say "I am willing to buy your house as is and you would walk away with ten grand"? Why would I need a license to tell them I can help them? Why wouldn't I need a license if I were asking them what their financial situation is? Why wouldn't I need a license if I am asking them personal questions? I simply stated that if you don't want a hang up on a cold call, then don't start your call with questions, start your call with solutions.

 Maybe if you are asking those questions, it's not time yet for you to be cold calling? Maybe you aren't asking those questions but if you were calling me telling me you could help me, I'd be asking for a copy of your state license and if you didn't have one, I'd report you to the DBO.

The blatant bait and switch tactic is illegal in at least some jurisdictions.  Borrowers latch onto the "we can help you keep your home" words and ignore the small print, if any.  When they then lose their home anyway, watch out for a lawsuit.  (If betting on them not affording such suit in order to take advantage, one should reconsider his/her life choices.)

Originally posted by @Gi'angelo Bautista :

Hi Everyone,

I'm cold calling pre-foreclosures and I'm having a bit of trouble with my approach.  At first, I was approaching them as a real estate investor that buys homes for all cash and etc, but I noticed that I would get a hard no, not interested, or a hang up. After that, I would ask about their pre-foreclosure then they would say they got it handled then that's that. I did find that a few would talk a bit more so it looks like I'm going in the right direction. I really want to perfect this skill.  I was wondering how you all approach your pre-foreclosures when you are cold calling or door knocking?  Any good examples of investors speaking to pre-foreclosures?

 Hi from where you get pre forclosure list and numbers ?? 

Ron S.   

Hmm... I have no idea what you are talking about. I think we are talking about different things. I'm not asking anyone those questions so I'm not cold calling anyone. I'm telling you what worked for me when I was in pre foreclosure. This was in Florida, so I have no idea why on earth any flipper ... as Joe Citizen .... cannot contact the current owner of a preforeclosure house, to make a VALID offer. In Florida, anyone can make an offer, no license necessary. Not in the real estate business, in the flipping business.

Originally posted by @Karen R. :

Ron S.   

Hmm... I have no idea what you are talking about. I think we are talking about different things. I'm not asking anyone those questions so I'm not cold calling anyone. I'm telling you what worked for me when I was in pre foreclosure. This was in Florida, so I have no idea why on earth any flipper ... as Joe Citizen .... cannot contact the current owner of a preforeclosure house, to make a VALID offer. In Florida, anyone can make an offer, no license necessary. Not in the real estate business, in the flipping business.

 I'm talking about California specifically but, it applies to Florida as well. Florida statute 501.1377 deals with equity purchasers or persons engaged in "helping" those in or in imminent danger of being in foreclosure. In California, no good deed goes unpunished. Call someone that's in or facing foreclosure or, knock on their door and talk to them about foreclosure avoidance, helping them, etc., you may be subject to licensure as a foreclosure consultant. You may be subject to those rules in other states. In Florida, if you do any of the above, and aren't licensed or, don't have a specific exemption, well, that's on you.

If they aren't in or close to being in foreclosure? Sure, knock and call all day. If they are? I'd approach with caution.

Ron S....

Equity purchasers or those "helping" are a far cry from a flipper offering a purchase on the soon to be foreclosed upon home. I am not someone offering to "help". This is where we are differing. I am one who was cold called and I simply stated that if you are cold calling me, and you want to know all this financial and personal info, I'm not telling you anything. If however, you call me and give me an offer... well then, I will listen. 

Since I have experience on the side of a distressed seller, I now can empathize with them when I cold call them. When I said to offer them solutions, thats what I meant. Give them a price, tell them you will pay closing costs, that you don't require a home inspection,etc. This is NOT "an equity purchaser" or one who is "helping". This is an honest offer that can be bargained back and forth until a deal is made. 

An offer to buy, an honest offer. Yes, get the bargain but don't be a shark and don't sound like a shark. Have empathy for their situation and you will not have a hang up. Don't start the conversation with "how can I help you?"... Start the conversation with introductions and then your offer... you won't get a hang up. 

You can quote all the statutes you want, but an offer to buy a property hardly calls for law enforcement. If I, as a buyer, find a property and want to make an offer,why can't I? 

You seem to be more concerned with those who are "shady" than honest buyers. Foreclosure avoidance???? Never said a word about that, nor would I. You seem to think I'm some sort of fly by night vulture preying on unsuspecting owners. I do not,nor would I ever practice such things. I am a buyer. PERIOD.

Again, I was simply relating HOW to approach someone in preforeclosure. That was the topic.

Originally posted by @Karen R. :

Ron S....

Equity purchasers or those "helping" are a far cry from a flipper offering a purchase on the soon to be foreclosed upon home. I am not someone offering to "help". This is where we are differing. I am one who was cold called and I simply stated that if you are cold calling me, and you want to know all this financial and personal info, I'm not telling you anything. If however, you call me and give me an offer... well then, I will listen. 

Since I have experience on the side of a distressed seller, I now can empathize with them when I cold call them. When I said to offer them solutions, thats what I meant. Give them a price, tell them you will pay closing costs, that you don't require a home inspection,etc. This is NOT "an equity purchaser" or one who is "helping". This is an honest offer that can be bargained back and forth until a deal is made. 

An offer to buy, an honest offer. Yes, get the bargain but don't be a shark and don't sound like a shark. Have empathy for their situation and you will not have a hang up. Don't start the conversation with "how can I help you?"... Start the conversation with introductions and then your offer... you won't get a hang up. 

You can quote all the statutes you want, but an offer to buy a property hardly calls for law enforcement. If I, as a buyer, find a property and want to make an offer,why can't I? 

You seem to be more concerned with those who are "shady" than honest buyers. Foreclosure avoidance???? Never said a word about that, nor would I. You seem to think I'm some sort of fly by night vulture preying on unsuspecting owners. I do not,nor would I ever practice such things. I am a buyer. PERIOD.

Again, I was simply relating HOW to approach someone in preforeclosure. That was the topic.

 You seem pretty defensive for someone that knows what they are doing and isn't' doing anything wrong. "Only the guilty defend themselves" they say? If you aren't doing anything wrong...great. Good for you.

I'm not accusing you of anything. I'm simply saying approach with caution. If a borrower you get in contact with might be in or near foreclosure, whether you intend on it or not, having a conversation with them, may put you into a position of being viewed as a foreclosure avoidance consultant. Whether you consider yourself one or not. you don't have to have the intent, you just have to be in a position to meet the criteria of a transaction that would require licensure. Put yourself there (intended or not) and you might have some explaining to do.

Ron S...

Geez, I just don't know how else to put this. I am NOT a foreclosure consultant, I do not offer solutions on how to avoid foreclosure other than buy their house before it goes on the block. I have been on both sides of the situation so I have empathy for the distressed seller. I was offered a measly 500.00 over mortgage costs so I knew I was dealing with a shark. I turned him down flat. Then someone came along who spoke to me as a human being, no scripts. We settled on a flat 20 grand for me after paying off the mortgage. Plus he gave me 6 weeks to move out. He got his deal and I left with a little something for me. 

"Only the guilty defend themselves?" HUH? In three seperate posts you have quoted to me various statutes, telling me you would call the DBO. Sounds like a veiled threat to me... I have repeatedly told you I am a private citizen,not in the real estate business. At all. 

Now I'm "guilty" for "defending" myself? I was not defending myself, there is no need for that. I was trying to explain HOW to approach someone in preforeclosure if you want a response. Based on my own personal experience.

If this is how "friendly" bigger pockets forums are, I think I'm in the wrong place. Seems like you just need to pick a fight with someone who has a different take than you.