Buying Foreclosure Properties
A solid foundation to buying foreclosures begins with understanding of the three stages of the foreclosure process:
(1) Buying pre foreclosure ( Notice of Default, Lis Pendens)
(2) Buying at auction ( Notice of Trustee Sale, Sheriff Sale)
(3) Buying bank-owned real estate (REO)
Default Research focuses on the first of the pre foreclosure process (buying pre foreclosures) where a majority of the ‘deals’ and profit are realized. Therefore, our clients are able to capitalize before their competition and before the process continue through the auction and bank-owned stages. That is the Default Research advantage at work!
Step 1: Educate yourself and establish a marketing strategy
Spend some time familiarizing yourself with your particular states foreclosure laws. Establish a marketing strategy. Will you be mailing postcards, making phone calls or knocking on doors? Prepare your postcards, establish a telephone script, or prepare some promotional materials. Remember that these people are facing economic distress and an embarrassing process; your appeal must be compassionate and you must be sincere in your desire to help them out of foreclosure.
Note: The foreclosure process can be swift; therefore it is a sound business decision to get pre-qualified for a loan early in the process. To do this, you need to contact a reputable mortgage broker who can find you the best financing.
Step 2: Get your pre foreclosure list
By working with Default Research, you are gaining access to fresh foreclosure lists. In addition, you have property information addresses. You then decide if you want to market to all homeowners in your major metropolitan area or focus on the many unique search criteria available on our website.
Step 3: Approach the homeowner
Once you have your list prepared and organized, begin by contacting the homeowner. We suggest using various methods of contacting these families in economic hardship combined with a sympathetic voice. Some examples:
(1) A series of clear and empathetic letters or postcards
(2) A limited number of follow-up phone calls
Step 4: Make your offer
You are now prepared to make an offer to the family in distress. Before the process can move any further, you must first have the trust of these people. Then you need to explain to this family, in a very clear and patient voice, how you will be able to help them out of the foreclosure process.