Short Sale Leads Are Easy to Locate
I came across an old colleague the other day, a top producer in her day, who is now semi-retired. We exchanged small talk and she grumbled about the current state of the real estate market. “I wish things would return to normal,” she griped. “I cannot seem to convert any leads.”
After we exchanged pleasantries and we each went on our merry way, I began to think more about her comment. What is normal in real estate these days? The way that my colleague generated and converted leads five or ten years ago is completely different from the way that we do so now. Short sale and foreclosure leads are part of this new normal.
My former colleague, like many real estate practitioners, apparently is finding challenges adapting to the way in which we conduct business right now. Leads, short sale leads, are around each and every corner. Working with these short sale clients is a great way to generate business and get your signs out there when our nation is in a recession. The news is filled with information about the perils of our economy. If your sign is everywhere in town, that might be a great way to send a message that you are still in the real estate business and that you are successful.
So, how do you find these short sale leads?
One way to amass short sale leads is to obtain a list of anyone who owns a property that has begun the foreclosure process. In my community, I can obtain this information through my MLS. This information can also be purchased from a number of recognized and respected websites. Anyone who has begun the foreclosure process and whose home is not already listed for sale may need the support of a qualified Realtor®. (By the way, when I say qualified Realtor®, I’m talking to you).
Another way to obtain short sale leads might be to identify a community where the market has declined. In my neck of the woods, many of the newer developments have seen a significant decrease in market value from 2003 to present. So, any homeowner in these communities who did not make a large down payment may owe more than there home is worth and may be in need of a short sale advisor.
According to Credit Suisse, the largest subprime mortgage product sold was a 5/1 ARM that was sold in 2005. Well, we have just entered the final quarter of 2010—that fifth year—and many of these loans are adjusting from Interest-Only to 30-year fully amortized. Even though rates are still low, the change from interest-only to fully-amortized has caused mortgage payments to increase. In some cases, borrowers may not be able to afford these payments.
These types of borrowers described here are folks who need your help right now. And, with our national unemployment rate above 9%, I’m sorry to say that a number of folks need your help immediately.
Oh, but I think you were the one who told me that you hate short sales and cannot wait until things return to normal, right? That’s okay, more leads for me.
Bruce Lemieux
September 14, 2010 at 5:12 pm
I admire the agents who work these. I’ve recently had a couple great sellers who have done everything humanly possible to get a short sale through to avoid foreclosure, only to be thwarted by their banks over and over again. It’s an exhausting and frustrating process that convinces me that banks work as hard as they can to make the real estate market as bad as it can be.
Even if the market can’t get back to “normal”, having banks operate like “normal” enterprises would be a welcome change.
John
September 14, 2010 at 8:32 pm
I agree completely with Bruce’s comment (above) – My experience recently with short sales, I’ve noticed the banks seem to be a lot more cooperative and taking a lot less time with responding.
Fred Griffin
September 14, 2010 at 9:57 pm
Greetings from Florida, “Where Every Listing is a Short Sale”. Well, maybe not quite, but it sure seems that way.
When I first encountered Short Sales a few years ago, I spent months on the telephone, trying to find who the Decision Maker was, trying to get approval. Hopes would arise, only to be shot down by Lender #2 or Lender #3.
My policy since then is to refer short sales out to another Brokerage. The problem is, a huge percentage (maybe half) of potential listings are short sales! Your article is giving me a re-think. Maybe I should start listing them.
Thanks for the inspiration, Melissa.
LesleyLambert
September 15, 2010 at 11:13 am
Melissa, do you have any suggestions for which websites to try for these lists? I have had on my to-do list a plan to contact these people and haven’t found a reliable source for the pre-foreclosure information in MA.
Charlie Allred
September 22, 2010 at 7:38 pm
keep the leads coming! I hate to see homeowners struggling, but I love the fresh start I am able to help homeowners have. No more burden of the home they cannot afford.
Nadina Cole-Potter
October 17, 2010 at 6:40 pm
Short sale leads (homes where the notices of foreclosure sale have been recorded by the lender) are easily acquired from the marketing person at your local escrow/title company. For those of you in states where escrow/title companies are replaced by closing attorneys — your guess is probably better than mine. The key is to acquire the leads as early as possible so you get there earliest with the buyer. The other key is to set up a tracking system. Some title/escrow companies provide their leads in spreadsheet form. Just know that when you receive yours, every agent that the marketing person is trying to get to open escrows with his/her company is also receiving the list. The most difficult part of contacting an owner is locating a telephone number and, if you are lucky, an email address. So far, the best source I have found is whitepages.com.
You might want to specialize in homes owned by out of town or out of state owners: they could be investors who have more than one property in your location or, if you are in a resort-vacation area, owner of a vacation home. They need you to guide them through the process. Some lenders will work short sales for investors; others will not. I found the best way to reach an out of town owner is to send U.S. Priority Mail with return receipt requested. You can track its progress online. Send your letter and marketing materials in one of those pasteboard envelopes that looks like a FedEx “flat”. It’s attention-getting and sets you apart from the rest.
Kris
June 18, 2011 at 9:56 am
Great Article Melissa. Given the proper research, any homeowner can improve their situation with time. It's a long road, but we have to help them get a foot hold.