Real Estate Investors ask when the best time is to reach out to the owners of a home during their pre-foreclosure process. The issue is many real estate investors feel uncomfortable reaching out to families when their experiencing financial distress and cannot keep up with their mortgage. People will tell you this may be too awkward a moment. The truth of the matter is you can be providing a fantastic service to that family and everybody involved. We’re going to talk about the best time to reach out to them so that everybody can win during this hard phase.
Pre-foreclosure is a challenging experience for any family facing that situation. There is a lot of pressure coming in from all directions, and many people are uncertain of their outcome. It’s the time between when the bank gives the homeowner legal notice stating they’re behind on payments and when the bank ultimately starts to foreclose. If a family’s home eventually goes to foreclosure, it can be devastating to their credit history affecting their future finances for many years. In fact, most families going through the pre-foreclosure process recognize selling their home is likely the best solution and would feel less stress if they knew a buyer was at their fingertips. A family knowing the whole situation can better position themselves to move on.
Approaching the family early on to discuss options is always the best course of action. Some families may not be receptive initially, but as time goes on the families sitting on the fence are likely to see it’s the best solution long term. Most families will recognize this as a solution right out of the gate and are thankful to have more options instead of a foreclosure auction. A lot of times it’s just a shock to them because they’ve come on to some severe hardships. Having time to digest their options can make all the difference in the world.
Reaching out to the family is straightforward because you can determine who has been issued official notice by using the deeds office as a resource. This point in time is perhaps the best to make the family aware of your services. Some families may even list their home immediately as a pre-foreclosure listing either online or in the newspaper to attract some attention if they’re considering a sale. Once the family has listed the home publicly, there will be more competition. So there is a sweet spot where you can be in a better position to help. So it would be better to position yourself ahead of anyone else and offer the family your services immediately.
It pays off to position yourself ahead of the crowd and make a sincere effort to get to know the family enough for a walkthrough inspection of the property. Understanding the full scope of the repairs is crucial for getting an accurate offer together. The sale of the home can be a private negotiation between the buyer and seller, but the deal must be approved by the bank first.
Developing rapport with the family, so they are receptive is vital because if too much time passes the family may want more options by contracting with a real estate agent. The bank will then arrange to have a broker price opinion done to estimate the fair market value. Having the BPO done will help the seller and Bank determine if any proposed price is to their advantage.
A benefit of getting to know the family early on is it you can make a difference where all three parties win. The bank, the seller, and the buyer can all get what they want when everything runs smooth. However, there are some drawbacks because the family members are still able to repair their situation with the bank by paying what is owed and using a loan mod potentially turning their situation around. In a case like this, the family would likely withdraw from a sale completely. It’s not something that happens frequently but can happen.
To conclude pre-foreclosures are an excellent opportunity for investors to help family members in tough situations save their credit. It’s far better to connect with the family very early on providing them options before they potentially seek other possibilities by contracting with a real estate agent. An agreement can be made between the buyer and seller privately for the sale of the home once the bank approves it.