The negotiation process that will obtain the signature of the seller with their numbers and terms

It is crucial for you, as a foreclosure investor, to fully understand all the options and alternatives that are available to foreclosure homeowners and the consequences of each. Every homeowner facing foreclosure has the following options open to them.

1. Reincorporation. This is when the buyer cures the default, either with their own money or with a short-term loan. Note that curing the loan is more than the total of the late payments, but it will include attorney’s fees and other fees charged by the lender, such as filing fees, etc.

2. Sell the property. The owner can sell the property at any time prior to the foreclosure sale. This is often difficult and risky, because deals can backfire or potential buyers may not qualify for the loan.

3. Refinancing. The homeowner refinances the property with a new loan that cancels the delinquent loan. If the landlord is behind in payments, this can be very difficult.

4. Writing in place. The homeowner assigns the property directly to the lender, so the lender does not have to go through the foreclosure process.

5. Bankruptcy. The homeowner can file for bankruptcy, which will stop foreclosure in its tracks, but only until the lender obtains release from the court. Unless the homeowner can recover late payments as part of a reorganization plan, bankruptcy only delays the inevitable. And this is important – once the stay is lifted, the foreclosure process will pick up where it left off! It does not reset the clock from day one!

6. Let it go and get something when it sells. In this case, the homeowner allows foreclosure to proceed and receives everything in excess of the initial offer after all minor bonds have been settled. In most cases, that is nothing.

7. Walk away. The owner lets the lender proceed with the foreclosure. This can be an economically valid alternative when the homeowner has little or no equity, but the derogatory effect on the homeowner’s credit rating will live with them for 10 years or more.

Now that you know the alternatives that are open to sellers in the event of foreclosure, let’s look at some of the strategies I use to close the deal.

One of the things I learned early in my investment career was that there were certain things I could do or say that could really alter the outcome of negotiating with sellers. Rather than go over the mistakes of my early career, let me tell you what I know works. How do I know they work?

When I started in the business, I was only able to close one out of every five deals that I tried. Now it’s closer to four out of five. This, as you can imagine, has done a lot to increase my income, and it will be for you too.

The first few moves set the stage for what will happen next!

First, when I am pretty sure there are all the things present that make for a great deal and I have gone through all the numbers and decided on my exit strategy with the property if I acquire it, I call the owner and ask for permission to visit them on their home when all the people in the title are home. Remember, I am setting the stage here!

When I arrive I introduce myself and ask the owner to give me a tour of the property. As I enter the house, I look for pictures of children, or anything I can talk to them about to break the ice. I also let them talk as long as they want about how they got into their current situation and I actively listen. I empathize with their situation and tell them that they are not to blame and that bad things happen to good people. Then we go around the house and I can take some notes.

At the end of the tour, I sit down with them and ask them to repeat all the facts. Then comes my first crucial question … I ask you what you would like to do, what would be the best outcome of our meeting.

Once they realize that selling is the best option for them, I tell them about my company and what I could do to help them. In most cases, they have already seen my credibility building website, where they have seen about a dozen video testimonials from people I have helped. Most of the time they remember it, and I remind them that I have seen 7 other owners in the same situation this week, and I still have 2 more to see tomorrow!

I have a script that I have memorized, which continues to plant seeds that I am your best option. I show you how I will make up your late loan payments and immediately improve your credit rating.

Later, when we have agreed on all the terms of the sale, I present the ‘subject to’, where I will continue to make your loan payments, further increasing your credit score. This minimizes any future objections to taking over the loan even in your name.

So it’s a matter of agreeing on simple things, like move-in date, closing date, etc. Then one more time I go over all the terms before I pull out the purchase contract, but I make one last comment that I seem to be helping them … and those two people I was supposed to see tomorrow are out of luck. , because I never accept more than four clients a month.

Saying this will help you handle any ‘we’ll think about it’ objections should they arise. Once all the documentation is signed, I congratulate you for taking action and doing the right thing. Be happy for them and show it!

In summary, it is important to understand all the options a foreclosure seller has and how to position yourself with them as your best option to help them.