Guide to Finding and Working Foreclosures

At this moment, there are a number of good reasons to work foreclosures.

First, foreclosures are in abundance.

Second, working foreclosures adds to your toolkit of buyer services.

Third, finding and selling pre-foreclosures helps out a struggling human being.

Action Steps
The best contacts and resources to help you get it done

Foreclosures Are in Abundance

The leading online marketplace for foreclosures, RealtyTrac, says its foreclosure listings have grown by as much as thirty-nine percent in the last year. And according to RealtyTrac CEO James J. Saccacio, “Foreclosures are on track to go above 1.2 million in 2007, which would push the nation's annual foreclosure rate to more than one percent of U. S. households.” As you can see, the inventory of foreclosures is rising, which means a good opportunity for you.

I recommend: To view over 1 million properties–updated daily–including pre-foreclosure, bank foreclosures, for sale by owner (FSBO), foreclosed homes via auction, new homes and MLS listings visit http://www.realtytrac.com/.

Working Foreclosures Adds to Your Toolkit of Buyer Services

Brokers and agents should take a good look at the foreclosure marketplace for several reasons, not the least of which is to broaden the range of services they offer and enjoy increased sales. Consumers are fascinated with the concept of saving money on their home purchase. That's why they seek information about foreclosed properties. The perception is that they will save money. Although Linda Stern at Newsweek writes that houses are going for as little as 70 percent of their current market value, this isn't always true. Not all foreclosures are deals. Regardless, the same consumer has expressed an interest, need or desire to purchase a property, and whether they buy a foreclosed home or not, they still need to purchase a property. This creates several opportunities for the wise broker/agent.

I recommend: I might also recommend at this time that you go to www.realtychat.com. This is a web site where you can post your questions and others in the industry will respond. Plenty of people will respond to your foreclosure questions and comments.

Selling Pre-foreclosures Helps Out a Struggling Human Being

The seller who is on the brink of defaulting on his loan needs your help. Buying a pre-foreclosure—a home not yet in foreclosure—can be a worthwhile investment for your client. Either they use the property as their home or as an investment, helping a distressed homeowner who needs to sell can be a beneficial experience for both parties. Many people, in fact, make a full-time profession of purchasing pre-foreclosure homes and reselling them. In this way you, also help a seller preserve his credit. In a nutshell, representing foreclosures could be a boon for you. And a saving grace for the seller.

I recommend: To contact preforeclosure owners you must first locate them. There are several excellent ways to find preforeclosure owners such as in newspaper ads.

However, the best way to go about it is to subscribe to an online preforeclosure service such as http://www.ipreforeclosures.com/.

Tips & Tactics
Helpful advice for making the most of this Guide

• It’s best to contact the preforeclosure owners by mail. You may expect to send 1,000 letters a year to preforeclosure owners. But if you close 10 deals a year that net $5,000 to $25,000 per deal, you will have created a very successful business for yourself.
• Don’t be discouraged if you don’t hear from anyone after making contact with owners by mail. Most preforeclosure owners are in a state of denial about losing their homes. For this reason, you should contact them on a regular basis.
• Partner with a lender when approaching FSBOs. The strategy is first to break-down the barrier of FSBO resistance. What’s the best way to do that? Don’t threaten their equity. Whenever an agent calls, the FSBO is immediately defending their equity. They see you as being out to get 6%-7%, which may represent a huge chunk of their total equity. But the lender doesn’t cost them anything. The lender is a service person who makes money without dipping into their hard-earned equity.

The official source of Finding and Working Foreclosures is
the Foreclosure Listings page at Business.com