The owner whose property is in the preforeclosure stage may be pursuing other options to attempt to cure the default (in other words bring current the back payments). Still, a serious offer from a pre-qualified buyer may in some instances prove to be the best solution for the preforeclosed property owner.
By contacting the preforeclosure owner directly before the foreclosure process builds to a full head of steam, both the buyer and seller can benefit. The buyer can very often gain from tremendous discounts on the purchase of the property while the preforeclosure owner can get out from under the mortgage and escape from having his or her credit history being ruined. Unique and flexible sales agreements, along with low down payments, are also possible options available during this period of time — if structured properly.
Buyers interested in contacting the preforeclosure owner must be sensitive to the fact that the owner is probably in the midst of a delicate financial crisis and as such is likely weighing his or her options before taking further action. Prospective buyers must therefore approach the preforeclosure owner in a considerate manner which is both nonaggressive and respectful of their need for privacy. Keeping those considerations in mind, probably the best way to contact a preforeclosure owner is through the mail.
Postcards are usually the method preferred by investors to contact a preforeclosure owner because they are a much shorter, quicker and more efficient way of communicating the buyer’s message which is also less time consuming for the preforeclosure owner to read. Although there is the risk of the letter or postcard going right into the trash, at the very least contact by mail offers the preforeclosure owner an alternative to foreclosure that is unassuming and non-threatening. Contact by mail, rather than phone calls or knocking on their door, also lets the homeowner know there is someone who is interested in buying the property, and gives the preforeclosure owner time to think about the offer without undue pressure. The message should be brief and to the point, letting the preforeclosure owner know that there is an offer on the table that may be a viable option for them rather than facing a foreclosure auction.
One postcard is not always going to do the trick. Many successful pre-foreclosure buyers and investors send out quite a few postcards to properties in their area before they find an owner who is interested. It’s not uncommon to send out several postcards to the same owner during the foreclosure process. The owner may be more interested to sell as the auction date looms closer. Therefore, RealtyTrac recommends sending out at least three or four postcards to each preforeclosure property. Mail each postcard at seven to 10 days intervals, so that the direct mail campaign is effective without overwhelming them.
Don’t be surprised if the owner does not respond to the postcard immediately. In most states, the owner has several months between the initial foreclosure notice and the public auction. During this time the owner will consider all the options available, including refinancing or selling. An owner’s first reaction is usually not to sell. But if no other options work out, selling is a better option than losing the property at public auction.
If the owner doesn’t respond to postcards, some buyers and investors will try to reach the owner by phone or in person. If you do this, be prepared for a possible rude response as these methods of contact are more inherently confrontational. And always keep in mind that the owner in default retains ownership rights to the property during the pre-foreclosure period. If they are not interested in talking with you, it’s time to leave.
If the owner rejects all of your contact attempts, you may still have a chance to purchase the property at public auction, which occurs if the owner doesn’t sell or pay off the amount owed during the pre-foreclosure period. RealtyTrac posts auction properties, and subscribers can keep tabs on that list to see if a property has been scheduled for auction. You could also call the trustee periodically to check if an auction has been scheduled.
Once you’ve made initial contact with the owner, try to set up a meeting with him or her at the house foreclosure for sale to discuss the situation and the options. Ideally, this can be a time where the home owner can get all the cards out on the table and you can evaluate the condition of the house foreclosure for sale property so you can make a better decision.
If the owner doesn’t express any interest in talking to you, leave your name and contact information and let them know you’re still interested if they change their mind. You may want to follow-up with a letter or phone call later depending on how interested you are in the property and the extremity of the owner’s response.
Remember, contacting owners who are in default can be the most intimidating step in buying a pre-foreclosure. For buyers and investors who prefer to work with an agent, a real estate professional from the RealtyTrac Agent Network will be happy to contact the preforeclosure owner in their behalf.
If you do contact the owners yourself, just remember they have no obligation to work with you as a buyer. You need to let them know you want to give them an option that will be beneficial to them as well as to you as a buyer. You want to help the home owner walk away from the situation without the house foreclosure on their credit history, free of mortgage debt and hopefully with some additional cash in pocket to relocate and make a fresh start.