I have been marketing to probates using direct mail for a long time now. Over the past 6 months or so, I have noticed a change that will directly impact how I market to these folks in the future. In fact, I would say this will be my new way to market to probates.
My procedure has always been to add these folks to my database each month when the list comes out. As soon as they are entered, I send them the first in a series of direct mail letters. I then mail to these folks every 4 to 6 weeks continuously for about 15-18 months.
Over the past few weeks, I have been looking at the 2010 probate database. Previously about 10% of the houses on the original list would remain after 12 months. What I have discovered is that somewhere between 60% and 75% of those properties are still not sold. The percentage varies by month, but that is a huge difference!
Don’t you think these folks might be a lot more motivated than they were 9-12 months ago? I know I do. Winter heating bills will be arriving soon, the property tax bills just went out in my area, and these folks will be looking at another premium for homeowners insurance.
Why 15 -18 months?
Because in the past, most of the houses would have been sold by that time.
The probate people seem to fall into two categories; those that are actively looking for an investor to buy their property, and those that think they will get a quick sale for more money by listing them on the MLS. The folks that are “investor minded” will generally respond much sooner to your marketing than those people who list their properties. However, there are some that will not even begin to think about selling the house until a year or more has passed.
A lot of these houses will be listed on the MLS right from the start. I know this, but I mail to them anyway. Not all of these houses that are listed will be sold by conventional means. It is those folks that still have an unwanted house after 9 months or a year that I want to capture with my marketing.
Updating your list
I have good intentions when it comes to keeping my list updated on a quarterly basis. But in reality, it’s usually updated about 3 times a year at most. One critical time to look at updating your list is at the 1 year mark. As I said, typically l would have only about 10% of the original names on the list that I started with. The majority of those houses would be sold on the MLS, to family members, to ME or to another investor. The ones that remain are still good viable leads.
My New Normal
The fact that houses are sitting on the market longer and longer, has definitely changed the way I will market to probates. Looking at my list, the numbers started to change in March and April of 2010 or just over 18 months ago. I have been watching them ever since. It’s almost the end of 2011 now. Given the large amount of houses from 2010 that still haven’t sold, I believe that investors will be seeing more and more motivated sellers if not “desperate” sellers in the upcoming months. These “additional” houses come with expenses that folks can no longer afford.
My new normal will be to market to these folks for probably 24 months as long as this trend continues. Once again, this all goes back to updating your list. As boring as it is, it’s a necessity.
A Perfect Example
I just got a call today from someone I spoke to about 6 months ago. At that time he told me the house was listed, but they hadn’t had a lot of activity. It had been listed for about 6 months at that time, and they had just renewed the listing. Now it is almost one year later, the listing is up in just under 2 weeks, and they want the house sold before they have to pay the taxes and the homeowners insurance. I will let you know how this turns out. I have an appointment tomorrow to look at the house.