@Andrew Ottino. Pre-foreclosures have always been something that everyone wants to get in on, but with not much artillery, to get the deal. Let me tell you my take (and I am sure others with more experience with actually using direct mail to these people will chime in):
Pre-foreclosure means that the owner of a property has missed at least one payment. Different lenders file what is called a lis pendens to the municipality at certain timelines (i.e., one lender might file after 2 missed payments, one might file after 4) There are fees (legal and other administrative) that can rack up with every aspect of a foreclosure, which is typically why there is not a "uniform" standard for how each bank handles "missed payments." With that said, just because someone missed a payment, does not mean they will miss another. I have seen many people who have had life experiences that resulted in a missed payment just because of life; divorce, death of a family member etc. These people typically have "equity" and them actually wanting to be foreclosed on is not the case. If they were in trouble (and had equity), most people understand that listing their home for sale with an agent is the wisest course of action. So basically they are on "the list," but really shouldn't be, and there is no way for you to determine that.
Conversely, if the person is, indeed way behind and they are in a scenario where they bought their home in 2004-2008 (depending on your area of the country) and they are "under-water," they are less likely to try and work with someone to bail them out. Without passing judgements, a lot of people that are in this scenario, end up trying to live as long as they can (for free) in their home (knowing full well they will be foreclosed on). There is a reason why there are exponentially more foreclosures happening around the country daily than short sales.
The other option based on the prior scenario is what's called a short sale. A short sale is something that you should NOT try to navigate on your own with a seller. There are financial affidavits, and all kinds of other paperwork that needs to be filed by both sides, that takes someone with a great deal of experience. This is my opinion, and might not be shared by all, but let me explain why. A short sale is completely different between lender to lender. There is paperwork that most agents don't even get involved with (in CT at least). We typically hire an attorney (paid by the seller) or contract out to what is called a short sale negotiator (who ALL THEY DO is deal with banks and short sales). I am going through one now, and as a real estate broker, even being familiar with the process, it is a complete nightmare. Some lenders are easy, but most are not. So, while I am representing my buyer or seller as I normally would in a regular transaction, all the short sale BS is handled by a third party (SS negotiator or attorney) I would love to hear from someone who can explain why banks make these so difficult to do, when they end up foreclosing on the property anyway (costing them more in legal fees and filing fees than the reduction in the principal received to sell the mortgage "short."
Sorry, I got winded here, but just wanted to share my opinion, and some of my experience. I would like to hear about someone who has successfully navigated "pre-foreclosure" lists and gotten deals. In our area, these just rarely equate to a deal. Hopefully there is someone out there who has this who can poke some holes in my experience! My guess is that there are successful wholesalers who may be able to share their success stories with us though, but I am not seeing a lot of wholesalers "share" their knowledge on these forums, or maybe there are just too few in my area that are also BP members.
