Buying Preforeclosure Properties - Evil or Charitable?

Buying Preforeclosure Properties – Evil or Charitable?

Posted on November 25, 2009
Filed Under Foreclosures, Investing, Preforeclosures | Leave a Comment

How to Approach the Preforeclosure Market

As the number of real estate foreclosures continues to rise, so is there also a marked increase in the number of real estate ‘advisers’ focusing their attention on preforeclosure owners.

A preforeclosure owner is simply someone who is not yet in foreclosure but needs to sell to avoid it. You might think that anyone trying to get a slice of these troubled owners’ pies is just adding insult to injury and caching in on someone’s financial crisis. But is it really so?

Is the preforeclosure business for you?

Although many others are already making a full time living in this sector, there is still room for you whether you are considering the property for yourself or for investment purposes. But even if you’re not an experienced Realtor, there are several simple steps you can take to find and contact preforeclosure owners.

3 Tips for Finding Foreclosures:

Local newspapers & classified ads: Many owners would prefer to sell to someone locally as it leaves them with a better feeling once the deal is done, so this is a good place to start. However, the cost of these kind of ads can quickly mount up for owners who are already watching the finances closely.
Online preforeclosure services: this is no doubt the most cost effective way for both buyers and sellers to come together in one place. For example, Foreclosure Coin is one of the major players in this market and for a small fee you can quickly and easily find plenty of owners to contact.
Research: Once you have a list of owners to contact, the next best steps are to decide on a particular area and do some local research into subjects such as real estate pricing, number of foreclosures, recent major employment ups & downs etc. This will give you a good idea if this is the right kind of area for you to be targeting and you can concentrate your efforts where you can be pretty sure of a good return.

The best way to contact preforeclosure owners.

Once you have your localized information, you will want to contact the owners initially by mail. You can certainly expect to be contacting around 1,000 owners each year if you want to make a decent living with this business.

As most, if not all, preforeclosure owners are in a state of denial about losing their homes you will need to approach them in a gentle, clear, and most importantly professional manner. Ensure that the letters you send are professionally written but still appeal to the owner’s emotions. After all, this is a traumatic time for them so remember to offer your ‘help’ with their situation.

Regular contact will ensure your name and phone number are at the forefront of their minds when they decide they are ready to take action, and they will most likely contact you.

Get the sale without getting a guilty conscience!

Help them as much as you can and you will find that you will be rewarded with not only a net sum of about $15,000-$25,000 (based on high resale value properties) but also their appreciation and thanks. That way, there are two winners – you and them.