I just bought my first pre foreclosure list. I am absolutely clueless and have no experience with the foreclosure process. Does anyone have any advice or tips/strategies for pre foreclosure leads? I want to know how to help these people out as much as possible. Any tips on how to communicate and offer assistance to these folks? Also, are there any additional steps needed on my part to wholesale a property that is behind in payments?
Thanks you in advance!
P.S. I just took a rough DM seller lead call "I will kill you, kick your *&#$, etc" and wanted to increase my efforts rather than slow down.
It's important to remember that most of these people will be scared. That will usually translate loosely into 1 of 3 general responses...
1...anger. a lot of people will compensate for their fear with anger. They will be looking for someone to blame. They may have adopted the stance that the world has conspired against them to get to this point. Whatever it is, just be prepared, because you will likely end up the target.
2...denial. they are so afraid they simply can't deal with the realities and have stuck their head in the sand, their fingers in their ears and are going....lalalalala...I can't hear you.
3...panic and desparation. This is the group you hope to get. They see the train coming through the tunnel. They just don't know how to get out of the way. They want help, but they don't know who to ask, what to do or where to turn.
#2 will probably never respond. #1 will be pissed. So, your job is to empathize, and defuse the situation. #3 is easy, just help them see there is a solution that doesn't involve a foreclosure. In a lot of cases you may find #3 is willing to almost hand you the oroperty, but they can't even afford to move. Be prepared to be creative.
Just remember, you're talking to desperate people who feel like their lives are falling apart. They are scared, hopeless and propably embarrassed. Their emotions are raw, and they are not always going to act or behave in a rational manner. Offer them compassionate solutions. Listen to them. Empathize with them. Focus on helping them and solving their problem,not getting a deal done. If you help them, the deals will come.
@Brian Flack My advice would be to stay away from any stage of foreclosure leads, primarily Pre-Forclosure...And i speak from first hand experience here in Ca...First thing is these people have already been bombarded with letters and flyers and phone calls and door knocks, from the 1st stage of people who get these leads, "mortgage brokers", in hopes of helping them refinance or re-do thier loan. Then next in line you have realty industry, the "realtors"..they have torn these people apart with letter postcards etc..., an now after all the filter then comes you the 3rd line of contact...these people are already worn down, and drained, they are frustrated and super angry...
Now the 2nd and most important factor with Pre-Forclosures are that they are HEAVILY protected by state laws, that can end you with a lawsuit you'd spend the rest of your life paying off, Because of all the mortgage fraud thats happend to cause the housing bubble to pop most states(especially CA) have super strict rules on how to contact someone in this situation, and the right type of verbage to use. If you are not licensed (which i assume your not) to handle these type of situation, YOU CAN NOT OFFER UNDER ANY CIRCUMSTANCES TO HELP THEM, GIVE THEM ADVICE, OR MAKE THEM BELIEVE YOU HAVE A WAY OF HELPING THEM....Your letters can not state any of that info, the only thing you can do is tell them you want to buy there house and thats it nothing more...And that can even tricky everyone wont intuprt your approach the same so you have to be careful. Now the fact that your not even the one buying the house, that can get you jail time, if the home owner finds out what your doing unless of course your open and honest from jump...Its a slippery slope thats not worth it..
Beleive me i went through hell with my first list it was only 400 leads, and i had lawyers calling me, the attorney general left me a voicemail (that i saved by the way)....I had threats, i had someone try to meet up with me and do harm...Luckily it ended well and just went away after time, but all it takes it the one person who has nothing but time on their hands to not stop and go hard accusing you of everything your not supposed to do.....
And now everything that @Hattie Dizmond
said can be true, you might find someone...But here in CA you might end up being one of the first BP member we see on the Socal news channel.....
Just my 2 cents
Please heed Jason's advice, if not for your own sake, for the sake of the homeowners. As you admitted you're clueless about the foreclosure process, you are also clueless about the short ale process, the implications of different situations, the damage you can do unintentionally. The last thing they need is someone getting them under a contract, fumbling around with dead ends, and running out of time when they could be doing something fruitful.
Wow. Every time I read posts like this it reminds me to give thanks I live in Texas!!!
One thing to remember is that pre-foreclosure means that a person is 30+ days late on their mortagage. That doesn't automatically mean they are going to be foreclosed upon, it could mean they had a slow month or are forgetful or accidentally changed their direct deposit info, etc. If the lead turns out to be deep into pre-foreclosure then you can respectfully back out or refer them to someone who can help them. Don't give up on your list just because one person cursed you out. You purchased the list so might as well do something with it. Keep pushing and maybe you might find the seller who has plenty of equity and is tired of struggling to pay their mortgage on time. Don't give up!
@Hattie Dizmond Thank you for the breakdown. That was just the sort of heads up I was looking for. I appreciate you taking the time. I will try to keep those profiles in mind.
@Jason Farmer I am glad you posted your experience with foreclosure leads. I thought preforeclosure would be be an easier way to start with this group. Apparently, there is a ton of risk in contacting those in foreclosure. you mentioned being "licensed"to handle foreclosure. Who in california are these people. I should start by contacting them and getting a clear idea on what is possible.
@Wayne Brooks thanks for the advice. I know being ignorant can cause problems for all of those involved. I would like to remedy this by learned about the process rather than avoiding a foreclosure leads whatsoever, but I understand where your coming from.
@Jairo Freyre That is the reason I created a list with high equity and just pre foreclosure. I wanted to give people another option rather than doing major harm to their credit and potentially losing their home. Sometimes, as investors we really can help people. Thanks for the motivation.
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