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Marketing to Pre-Foreclosures (specific to Texas)

By
Education & Training with DFW Mentor

The following question was asked on a national real estate forum site and it is followed by my response.
Pre-foreclosures in the DFW area is my specialty area and my opinions are based off of my personal experiences.

"I was wondering if conducting a mailing for pre-foreclosures is an effective technique? Is this more effective then door knocking?"

Opinions:
Door Knocking - Terribly time consuming and represents the least chance for a deal. On the plus side, it helps you to identify the characteristics of abandoned houses.

Calling on Phone-
This method yields only about 30% as far as listed numbers. The ones you do talk with, usually end up calling you names you may have to look up. They tend to bring your mother into the insult-fest.

Mailing-
BY FAR the best way to market to foreclosures! Not with the intention of reaching the owners still living there mind you. The ones that respond are just gravy.
The intention is to have the post office tell ME where the ABANDONED houses are, for just .39 cents!!!
Abandoned owners have no emotional ties left and once you find them, nearly 100% of the time they will sell for payoff. Here is a list of steps you must take to be effective:

1- Plain white legal size envelope.
    Bright colors piss owners off as they think that you are bringing attention onto them. Like the mailman
    doesn't know??? lol
2- Regular 1st class stamp
    A metered stamp looks non-personal.
3- HAND WRITE name & address and don't list "or current resident"
    In fact, have a female do that part. In DFW women get a 50% better return rate than men. Less intimidating.
4- Return address must be a home, street address and NOT a PO Box or work address. Also, do not put your
    name on it. If they see a name and they don't know you... it gives them a reason to not open it.
5- Have a stamp that says, "RETURN SERVICE REQUESTED"
    This is the major one. Even though it is a 1st class letter, the post office is slow to return letters without it. 
    Usually 15% of all the foreclosure houses are abandoned. In fact, 30% of the time the post office will return
    the letter with their forwarding address printed on the envelope!
    Simply the best chance you will give yourself.

Following these steps should get you between a 2% and 8% return call rate on top of 10-15% returned letters to follow up on. Just make sure the letter you write is good. But that's another blog.

Good luck,
jim watkins
www.dfwmentor.com/about_jim_watkins

William Collins
ERA Queen City Realty - Scotch Plains, NJ
Property and Asset Management

Jim,

Thanks for the post. I'll seek to test your theories!

Jan 25, 2007 08:43 AM
Netta Blackwood
La Rosa Realty - Kissimmee, FL
REO/BPO Expert
Jim these are some very useful tips and does not just apply to pre-foreclosures.  It can also be used for expired listings as well.  Thanks for sharing these points with us.  They are very useful.
Jan 25, 2007 08:49 AM
John Hruska
Homes Charlotte, LLC - Charlotte, NC
Thanks for the post.  This might be a tough approach in my area.
Jan 25, 2007 01:26 PM
Shari George
Coldwell Banker Tomlinson - Lewiston, ID

I don't live in Texas, but I've marketed to Preforclosures in the past.  I usually just print out a list of home owners who are in that position, and door knock...I will hit the whole block so the address that I am focusing on does not feel uncomfortable knowing that I know that there are financial troubles.  

I have had no luck at all with letters..

Okay,  now I know that there are going to be people who will shame me for going after people who are down on their luck..If you feel you must air your opinion, I won't hold it against you..It won't change my way of finding business, but if you feel you must say something....go ahead...

Jan 25, 2007 01:30 PM
Maggie Dokic /Indialantic | 321-252-8696
Magdalena Dokic - Indialantic, FL
Selling the beach in Florida's space coast

Jim, great post.  I learned stuff to be used not only in foreclosure cases.  A female doing the handwriting?  I never thought of it, but think you're right!  The return stamp?  Another good one.  Thanks for all the tips.

Shari, lighten up.  =)  I can't speak for anyone but myself, but I don't think what you refer to is unethical.  Someone who's facing foreclosure needs help.  And you're there to offer it.  There's a difference between helping and taking advantage of someone.  The fact that you even knock on other doors tells me you really do care about their feelings.  It's better that you get there first and not someone else who may not be as caring.  Be proud of yourself.

Jan 25, 2007 09:14 PM
Jim Watkins
DFW Mentor - Garland, TX

(Shari)

 I teach in the Dallas area on a regular basis. I have had students come up with the most awful letters to send to pre-foreclosure owners and after pleading with them to not send it.... find that the mailing got a response. Shows what I know.

Those students have taught me something that you seem to already know.... "Try"

They have proven to me that if you don't try, you will merely be one of the sideline hecklers who never seem to go anywhere. All it takes is one person to open that envelope and call you. One. If it turns into a deal, then you have written a good letter even though 99 other envelopes ended up in the trash.

So I applaud you for having the drive to try. I applaud you for having the good sense to get back up and try again.
You said "people who are down on their luck." I would say 95% of the preforeclosure owners are NOT down on their luck. Rather, they are VICTIMS! It's NOT their fault! YA RIGHT!
A victim makes poor choices. A victim blames everyone else for the results of those choices. A victim will tell you anything to get you to bail them out. And finally, once they are bailed out.... they repeat the process the rest of their lives. I know many people who were down on their luck but didn't lose their house.

You draw no shame from me. You have drawn respect from me for trying.... and doing. Thank you.

Jan 25, 2007 09:15 PM
Anna Lukyanova
Century 21 Sundance Realty - Daytona Beach, FL

Jim,

Those are valuable points. Specializing in pre-foreclosures here in Daytona Beach FL, I can confirm that mailing brings more results than any other technique. Knocking on people's door when they are in distressed mode may not so smart, considering that Florida is a pro-gun state ;-). Phone canvassing is not too bad, but many people that go through something like that have already abandoned their place or frequently their phone number is disconnected due to luck of funds to pay the bills. So, mailing is most non-frightening approach that I use.

Jan 26, 2007 02:42 AM
Lee Pedrazas- REALTOR Austin/ Round Rock, TX
Sellstate Classic Realty - Round Rock, TX

Jim,

 This is great info.  I appreciate the post.

May 05, 2007 02:15 PM