I’m sure that all of the people who have been doing short sales and wholesale deals on preforeclosure properties have run into the sellers who REALLY want to stay in the property… How are you handling this type of an objection to the process? Is it possible that you have someone with a documented ability (i.e. income verification) to make the payments if they were current on the mortgage, and you were able to find an investor that would rent to own, etc. back to the occupant?? (Obviously this is risky considering they are in foreclosure for a reason, most times…)
Basically, I am talking with about 1-4 homeowners per week and I am trying to come up with a “script” for when someone calls me and says “What can you do to help me?” or “Will I be able to keep my home?”. Any advice on the matter would be greatly appreciated.
Hey Scott… I’ve found it’s a huge emotional sale when you offer to help them stay in their home first. You know the big bucks are on the back end, but why not genuinely try to help them stay in the home? You’ll feel good knowing you’re doing the right thing. They’ll feel great that someone is actually trying to help them stay in the home.
Ok, but let’s presume that YOU know they can’t afford to stay in the home… and yet THEY don’t. Still offer to help them stay first. What you do is you allow them to “see for themselves” that staying in the home is just impossible. They simply can’t afford it. So, it’s not YOU that’s convincing them they need to move – ideally, THEY convince themselves it’s just not going to work out.
Instead of trying to “be blunt” like the other reply suggested (hey, sometimes that’s what it takes) first try everything you can to help them stay – ie, offer to help them w/ a forebearance for $1,000. I can walk you through this if you need more input.
Also, keep in mind that you’re not going to convert every deal. Just keep as many in the hopper as you can. There’s no secret formula or magic pill. When you’re dealing with a homeowner who “doesn’t get it” remember that there is another one in foreclosure RIGHT NOW who DOES get it and is waiting for your call. Don’t waste too much time with the non-believers… go find the ones that are ready to deal! Good luck!
Wrong wrong wrong El Toro. JDS is on the money. They can’t make the payments now but they are gonna start when you buy the home and rent it back to them, right? Sure they are. Let me guess…they fell on hard times, they now have their act together, and they are making good money now, right? It all sounds so good! Well…no it doesn’t.
This is a lose lose. I have been asked this question many times and the answer is always “no will have to move out” If they are in denial or they “must” have their home then I move on. Its a pure and simple business decision.
El Toro…you said, “Ok, but let’s presume that YOU know they can’t afford to stay in the home… and yet THEY don’t. Still offer to help them stay first. What you do is you allow them to “see for themselves” that staying in the home is just impossible. They simply can’t afford it. So, it’s not YOU that’s convincing them they need to move – ideally, THEY convince themselves it’s just not going to work out.”
I think you misunderstood my post… perhaps I wasn’t clear. What ScottyD135 is saying is that he talks with many homeowners in foreclosure. Some of the ones he comes across REALLY want to stay in their home. He wanted a “script” or approach to deal with these homeowners. So, I was offering an approach…
My point is that when you’re dealing with this type of homeowner, understand that their emotions out-weigh their clear rational thinking. They are unrealistic, have gotten religious, or start playing the lottery. To them, ScottyD and other investors are sharks wanting to steal their home. So, if ScottyD approaches them with a “you can’t stay here because you can’t afford it” it will only confirm their beliefs. To them, there is a way to solve this problem and this shark isn’t looking at any of them – he’s just trying to convince us to move.
You see, as investors, we jump to the foregone conclusion. We’re not emotionally involved. We’ve seen it over and over again. You know where the ship is heading. Instead of trying to “sell” them on that reality, instead cater to their emotional state and give them the opportunity to see for themselves that staying in the home is just not realistic. They will appreciate that you took the time to consider HELPING THEM FIRST instead of just coming in guns a blazin trying to get them to move out.
Does that make more sense? I realize there are many ways to skin this cat, but this is what has worked well for me.
BTW, I never buy and lease back to a homeowner who was in foreclosure. Too much potential for things to go wrong.
I have to agree with JDS. There are simply not enough hours in the day to do all that I might wish as it is. If I can get the homeowners out of their situation, save their credit, get someone else in at a bargain price, and pocket a nice sum of money then I have done my good deed for that day.
I don’t have the inclination or need to convice anyone that they are in a pit of quicksand. If they can’t see it, if they want to pretend, well, good luck, god bless, and goodbye.
ElToroRosalinda - I have to agree with JDS and wheelema. Also - I cannot tell from your posts exactly what your approach is. You mention forbearance - which would be a lenders alternative. And you state that you do NOT do a leaseback to a homeowner in foreclosure. So how exactly do you “help them stay in the home”??
It makes me feel all fuzzy inside when everyone agrees with me, but that wasn’t the whole point of my original answer.
It may be embarrassing for you to say it to them, but if you read the thread, when I told that guy flat out what was going to happen, his reply was ‘thank you for your input’. If I’d been sat across the kitchen table from him, he’d have got the same answer from me, and if I’d got the same response from him, I would simply have said, ‘see you at the sherriff’s sale’.
There’s no point giving them any false hope. You can’t really hurt their feelings any more, becaue they’re a whole lot more bothered about keeping the house, than snapping back to reality.
As arrogant as it may sound, there are times when you just need to be able to say ‘told you so’. Any other approach isn’t going to improve their situation, or yours.
When I get some one who wants to stay and now they have an income to startmaking their payments but not the arrears, I send them back to their note holder to recontract the note and start making payments.
Yes it will take them 2-3 days off work and getting thru 7-8 people at the bank before the Bank will admit they can/will do it. Darin