Hello everyone! I am making a serious change to my business and I wanted to share it with you. It has simplified the process of acquiring deals and now my business can take on unlimited deals and I don’t have to do anything to make it happen. I know you’re busy, so I’ll summarize what I did.

1. Everybody now comes to the office, with few exceptions. We will schedule a time to see the property only after we have a complete package on file. We send out one of our assistants to view the property, take photos, and put a lockbox on the property.

2. The exceptions are: FHA, VA, very expensive homes, and homes in a hot resale area. We will evaluate these deals and meet the homeowner if they can’t make it to the office.

3. When they come to the office, they either meet with one of our assistants. The problem we needed to solve was “after hours clients.” So we found a woman who lives just 1/4 mile from the office who is willing to get her notary and meet these homeowners between office closing time and 10pm. So now we have all hours covered. The homeowner can come to the office anytime.

4. To make certain the correct message is getting across to the homeowners (and a consistent message is being presented) I am working on a video that explains exactly what I want the homeowner to know about my business, what to expect, and our expectations of them. When this video is done, I will share it with you in this Blog.

5. After the video, they sign the paperwork and get a simple welcome package.

And that is all! It’s amazingly simple, and has taken the workload off of me with acquiring the deals. We are implementing this system on Monday of next week.

I hope you are having a great week!

Good luck with your short sales!

Marty Schulting
www.TopForeclosureTraining.com

When I’m talking with homeowners in foreclosure, I think about two things. First off, I think about treating them like they’re my brother or sister. Secondly, I think about not giving them a seminar. What I mean by this is that you want to do what you can to help the homeowner. If they want to keep their property, then I help them keep it by giving them helpful hints they can use to do their own workout. Most investors will not do this for them, and the homeowners will be grateful to you for your assistance. What this does for you is it sets you up to buy their house when they can’t or don’t get the workout done. Since you helped them keep their house, they will come back to you when it’s time to sell. This is effectively putting leads in your pipeline which will eventually come out as future deals. On the flip side, you are not required, nor should you, DO the workout for them (unless you’re charging for it). Here’s the problem. What happens if you try to do the workout for them and it gets denied? Your plan, I’m sure, will be to buy their house via a short sale. Now, it’s very rare that this will happen, but in theory, the homeowner could come back at same later date and accuse you of not doing everything possible to help them keep their house. You never want to be in this situation. This is the reason why I do not do workouts for homeowners in foreclosure any longer. I WILL spend the necessary time explaining to them how to do it themselves (10-15 minutes is usually enough).  

One final note. Some people give money to the homeowners. Remember, in most cases, this is illegal. There are ways to justify giving the homeowners money back at closing, but you have to be careful and make certain you’re staying legal. Additionally, there are enough deals out there and enough homeowners out there that will work with you WITHOUT getting any money from the transaction… you primarily want to work with them. The homeowner is gaining in many ways from this transaction, you should not need to give them money to seal the deal.

If you handle your pre foreclosure sellers in this way, you will be a success.

Good luck!

Marty Schulting

Taking inbound calls from homeowners facing foreclosure is an art. There is no magic bullet and no magic words that you can say that will simply get them to say, “ok, it’s your house, what do you need?” Unfortunately, the only way to really get good at taking inbound calls and converting them well is to take inbound calls. Simply put, you need to speak with the homeowners. You need to get on the phone and make mistakes. What this blog entry will do is help you avoid some of the most common mistakes. It will give you a very good idea on what to say and what not to say. It will help you become a success quicker. Realize this is an abbreviated version of everything you need to know. The complete version is just too large for this blog entry. I’ll still cover the most important parts, you’ll just be missing out on some of the detail.

Ok, first thing you need to do is to change the way you think about the homeowner facing foreclosure. Think of them as your brother or sister. Treat them like your brother or sister. On the flip side, don’t let them take all your time. The typical phone conversation should last between 10 and 45 minutes, depending on how much rapport is necessary with the homeowner. Here is how my conversations typically go.

First off, when they call, they’ll say something like, “I got your letter,” or “I got your flyer,” or something similar. What I typically do next is I say, ok, what can we do to help you? I then let them talk for a second or two, then I say (when it makes sense in the conversation), ok, well let me ask you a few questions about your situation and based on what you tell me, I’ll tell you what we can do to help, will that be ok? They almost always say “yes,” and then I just start going through the script. When you get to the part about “do you want to sell, refinance, or keep, you will be taking a fork in the road. If they say they want to keep, then you just walk them through their options (i.e. explain reinstating, forbearance, and modification). If they have the ability to stay based on what you tell them, then tell them to contact loss mitigation and get started. If they can’t keep, then you tell them their options now are a deed in lieu, sell their house (or short sale), or worst case, the foreclosure.

It’s really that simple. Many people get hung up when the homeowner says they want to keep. DO NOT TALK THEM OUT OF KEEPING!!! They will see through you here. Just explain to them how they can keep. When they realize that they really can’t, they’re going to come back to you because you tried to help them stay, and they will like you for that. Let them come to their own conclusion about selling.

After they say they want to sell, then you explain the paperwork necessary to sell and schedule a time to get together with them.

Good Luck!!!

Marty Schulting

Some people have a difficult time getting the homeowner to move out. What I’ve found is that your ability and ease at getting a homeowner to move out is directly related to your approach with them. Early on in my business, I tried my best to convince the homeowner that moving out is in their best interest. What I found was that I ended up arguing with them about what was best for them. I ended up feeling like the homeowner and I were not on the same team, and I did not like this. I came into the situation to help the homeowner, not hinder their situation and complicate it. So I sat down and tried to figure out how to handle this very important part of the process. Here’s what I came up with, and this works beautifully well.

My conversations go something like this…

“So Bob, have you found a place to move to yet?”

Realize that many homeowners will have already found a place to move to or will already have an idea of what they want to do. If their plan matches your plan, then just let it be. If, however, they want to stay longer than it works for you, then you may want to have the following discussion. By the way, I try to coordinate for my homeowners to leave the property within a couple days after the BPO is completed. This allows for the home to look as junky as possible for the BPO. Anyway, if they plan to stay or want to stay longer than I would like them to, my conversation goes something like…

“Bob, I know things are tough for you right now financially, and I want you to continue to live rent free for as long as possible so you can save up enough money to move on. However, it is easiest for me to sell your property vacant. The good news is that I’m not going to start marketing this house hard until after your lender does an appraisal on your house, which means I don’t need it vacant until after the appraisal. After that appraisal is done, however, I really need to get this place sold, which means it’s best for the house to be vacant within a day or two after the appraisal. I don’t know when they will order the appraisal. It might be right away, and they might wait a month or two. I should know a couple days to a week or so prior to it being done. Will that be enough time for you to get moved if you can start today to just look for a place?”

If they still indicate that they will be living in the house, then I usually say something like,

“Bob, I’ll do my best to get the house sold if you’re still living in it, however it greatly reduces the chance of me being able to get it sold. Bob, it’s your house and your foreclosure. I’ll do whatever you want me to do, I’m just telling you what I need to give this the best possible chance of getting it done.”

Basically, I put everything on the back of the bank and the homeowner. I let the homeowner know what I need in order to help them avoid the foreclosure (a vacant house within a day or two after the BPO). If they are not willing to help me, then I just tell them that they are decreasing the odds that this is going to get done. Simple enough.

If you address this issue in the above way, I think you’ll find your homeowners working with you most of the time. You NEVER want to push them out of their house. It’s their decision to leave, not yours. You just give them reasons to leave. You tell them what you need to give this the best odds of working. It’s up to them if they want to do it or not.

Good luck with it!

Marty Schulting

p.s. I never offer them money up front. If you end up giving them money (which I RARELY do) then do not give it to them until after you close, until after you get paid.

p.s.s. I do not say anything about their credit. They know their credit is horrible, and it’s not going to get too much worse than it alreay is. They’re probably going to need 2 months security deposit to move. Working with them to stay until after the BPO may help them to accumulate that money, which makes you look like the hero to them.

When you start this business, you will probably find yourself with only 5 or fewer homeowners that you are working with. Keeping these homeowners’ deals straight and keeping them updated as to the progress of their property will be fairly easy. The problem comes when you suddenly find yourself with 15, 20, 30, or 50 deals. Now you have so many homeowners, that keeping them all updated is a full time job itself! Here is my recommendation for updating your homeowners. There are many techniques, and this is the one that I use. In my initial meeting with the homeowner, aside from making them completely clear on what is going to happen during the short sale process, I tell them what to expect regarding updates from me. What I tell them is that I will update them every two weeks. Typically, the update will happen on a Thursday or Friday. If two weeks pass and there is no update, I tell them to please be patient and that I will not go any longer than 3 weeks without updating them. I also tell them that I will update more often if there is a significant (good or bad) change with their file. Lastly, I tell them that they can contact me at any time if they have any questions at all.

My preferred method of updating the homeowner is via e-mail. E-mail is the quickest and easiest way to update, because it can happen at any time, and it doesn’t require actually getting the homeowner on the phone. In my initial meeting with the homeowner, I always get an e-mail address and let the homeowner know that this is how I will be updating and contacting them. Of course they always get my office number AND my direct cell phone number. Some people disagree with giving out my cell phone number, but I find that my homeowners completely respect my time and they rarely call me, unless it’s an emergency. Plus, it proves that you indeed care about the homeowner and their situation. It builds rapport and trust, which for me is critical in my business.

What you want to avoid is setting the stage with the homeowner incorrectly. Do not set the expectation that you will call the homeowner every day. Do not allow the homeowner to think that it’s ok to call you just to “see how things are going,” unless they have a serious concern. Do not make the homeowner think that the short sale is a guarantee and that it will happen quickly. They must understand that the process will take some time (average of 3 months in my state) and to be patient.

Setting the stage with your homeowner and updating them correctly will make your job easier and more efficient. Take the time up front with your homeowners and you will be very happy with the relationships you build with them.

Good luck,

Marty Schulting

Many times when the homeowner contacts you from your marketing, they’re looking for a way to actually stay in or keep their house.  What you’ll find is that this happens 60 to 70% of the time. Don’t worry, just expect it.  Your job at this point is to educate the homeowner and convert them from a keeper into a seller.  This is done through education.  What you need to do at this point is dig into the conversation and learn about the homeowner’s situation.

A perfect example of how the conversation might go: “hi I got your phone number from your website and I’m calling because I need to keep my house. I’m four months behind and the lender doesn’t seem to want to work with me” your response could be something like “okay will let’s talk about this, my name was David what was your name again?” The first thing we wanted to do is get control of the conversation by asking a question. When they answer with their name, continue on with more questions, you want to gently interrogate the homeowner to gather as much information as possible, which will then help you to educate them on their situation. “Mr. seller, tell me some more about your situation”. Let Mr. seller talk a little bit and during his conversation hopefully he will share some information that you can use. Then it’s time to ask some more questions. “Do you have a first mortgage or a first and a second?” “How much is owed on the first? How about the second? And how many payments are you behind again? How much are your typical monthly payments?” After you’ve asked a few key questions you can formulate a response that will go something like this: “well Mr. seller, after hearing what you told me, I can give you an idea of what you can expect from your lender. First of all I’m sure you can imagine there being only one or two payments behind makes it very difficult to get refinanced, especially in this marketplace, but being for months behind like you are, I would highly doubt that you ever find anybody that will refinance you. This leaves only a couple of options that I know of. The first option would be to pay off the back payments in full, can you afford the $9,000 to do that? No, okay well sometimes the lender is willing to work out a payment plan with you but many times they want about half of the back payments upfront so not only would you have to come up with $4500, they also take the balance of the other $4500 and add that to the loan and expect that to be paid back within four to six months, so your payment might actually go up 500, 800, even $1000 per month on top of what you’re already paying, are you in a position to be able to pay that?” Many times a seller will certainly say no. If they do say yes,  by all means tell them either contact the loss mitigation Department and ask them for a workout plan or forbearance agreement or if you offer that service,  offer it to them yourself. Otherwise this is where your conversion process happens. It should sound something like this: “Mr. seller as far as keeping your house,  that seems to me the only options that I know of. There is another route that you could take should you decide to and that is selling your house. Iit seems to me that might be a good option at this point. Have you thought about selling your house?” You be surprised that many times a homeowner will actually say “yes I have thought about that and you may be right”. This is when you move in and let them know that your company actually buys properties. You explain that even though there is not much equity in their property which most likely there isn’t, you have a way that you can purchase the property by negotiating with the lender. There’s a very specific way to go into detail about this conversation and it means the difference of either turning that phone call into a deal are losing them for good. I’ll go into details in another post.

Sincerely,

David Corbaley