It is crucial to you as a foreclosure investor to fully understand all the options and alternatives that are available to owners in foreclosure and the consequences of each. Every owner facing foreclosure has the following options opened to them.
Now that you know the alternatives that are opened to sellers in foreclosure, lets look at some of the strategies I use to get the deal done.
One of the things I learned early on in my investment career was that there were certain things I could do or say that could really alter the outcome of the negotiation with sellers! Rather than go through the mistakes of my early career, let me tell you what I know works. How do I know that they work?
When I started in the business, I could only close one out of every five deals I attempted. Now its closer to four out of five. This, as you can imagine has meant a great deal to increasing my income, and it will for you also.
Early moves set the stage for what happens later!
First, when I am fairly certain that there is all of the things present that make a great deal and have reviewed all the numbers and have decided on my exit strategy with the property if I acquire it, I call the owner and ask permission to visit them at their home when all the people on the title are at home. Remember, I am setting the stage here!
When I arrive, I introduce myself and ask the owner to give me a tour of the property. When entering the home, I look for pictures of kids, or anything that I can talk to them about to break the ice. I also let them talk for as long as they like about how they got into their current predicament, and actively listen. I display empathy with their situation and tell them that they are not to blame, and that bad things happen to good people. Then we tour the house, and I may make some notes.
At the end of the tour, I sit down with them and ask them to restate all the facts. Then comes my first crucial question.I ask them what they would like to do, what would be their best outcome of our meeting.
Once they realize that selling is the best option for them, I tell them about my company and what I might be able to do to help them. In most cases, they have already seen my credibility building website, where they have seen about a dozen video testimonials from people I have helped. Most of the time they remember it, and I remind them that I have seen 7 other homeowner in the exact same situation this week, and I still have 2 more to see tomorrow!
I have a script that I have memorized, that continues to plant seeds that I am their best option. I show them how I will make up the back payments on their loan, and immediately improve their credit rating.
Later on, when we have agreed on all the terms of the sale, I introduce the subject to, where I will continue making payments on their loan, further increasing their credit score. This minimizes any future objection to taking over the loan still in their name.
Then its a matter of agreeing on simple things, like moving date, closing date, etc. Then I once again go over all the terms before taking out the purchase agreement, but I make one last comment that it looks like I will be helping them..and those two people I was supposed to see tomorrow are out of luck, because I never take on more than four clients per month.
Saying this will help you handle any well think it over objections should they arise. After all the paperwork is signed, I congratulate them on taking action and doing the right thing. Be happy for them and show it!
In review, its important both to understand all the options a seller in foreclosure has, and how to position yourself with them as their best bet to help them.
Marko Rubel is a prolific real estate investor in the Phoenix, Arizona area. He is much in demand as a speaker on real estate investment topics throughout the country, as well as offering his own seminars and home study courses.