Approaching At-Risk Owners
Every situation you encounter will be different. Some people have trouble paying their mortgage as a result of a job loss. For others, problems occur after a death or divorce. Each owner presents you with a unique situation, and you will find that your strategy must be flexible in order to negotiate a solution that benefits both you and the home-owner.
Knock on doors to talk to at-risk sellers — if collection agencies are calling them, they might not answer the phone. It's a lot more difficult to turn away someone who shows up on the doorstep.
Even if you don't truly care what happens to the homeowner, it's in your best interests if the outcome benefits all parties. By this time, the property owners may have been hassled by plenty of insensitive investors and collection agencies. Remember the importance of word of mouth. If you develop a reputation as someone who gets homeowners out of a bad situation, it will help your business grow in the long term.
The approach you use will vary. Are you responding to a FSBO ad in the newspaper? Don't immediately jump into pricing issues. Take some time to talk to the seller, asking questions that will help you determine why they are selling. If you ask that question directly, you won't get a straight answer, especially if finances are a problem. Sellers don't want you to know that they are under pressure to sell. If you take some time to explore the situation, you'll have a better feeling of the seller's true motivation.
Make a trip to your local courthouse. Find out what types of liens exist on the property and check the foreclosure filings. Find out if the property taxes have been paid. Unpaid taxes and a series of liens offer clues to the owner's financial situation.
If you're serious about the property, talk to the seller again after you've done your research. If you know there are problems, introduce the subject as tactfully as you can. Mention that, since you are very interested in the house, you did a pre-title search at the courthouse and found liens that must be paid at closing.
Just because a property isn't a foreclosure doesn't mean it isn't a good buy. The owners might have other reasons for moving on that are just as motivational. You must initiate conversations that uncover details about an owner's reasons for selling.
