The Owner Let' S The Lender Proceed With The Foreclosure

Category: Finance, Real Estate.

- "The Negotiation Process That Will Get The Seller's Signature With Your Numbers And Terms. "By Marko RubelIt is crucial to you as a foreclosure investor to fully understand all the options and alternatives that are available to owners in foreclosure and the consequences of each. Reinstatement.

Every owner facing foreclosure has the following options opened to them. This is when the buyer cures the default either through their own money or short term borrowing. Sell the property. Keep in mind that curing the loan is more than the total of the missed payments, but will include attorney's fees, and other fees charged by the lender such as filing fees, etc. The owner can sell the property any time prior to the foreclosure sale. Refinance. This is often difficult and risky, because deals can fall through, or the prospective buyers may not qualify for the loan.

The owner refinances the property with a new loan that pays off the loan in default. Deed In Lieu. If the owner is behind in payments, this may be very difficult to do. The owner deeds the property directly to the lender, so lender doesn' t have to go through the foreclosure process. The owner can file bankruptcy which will stop the foreclosure in its tracks, but only until the release is obtained from the court by the lender. Bankruptcy. Unless the owner can make up the back payments as part of a reorganization plan, bankruptcy only delays the inevitable.

It does not re- start the clock back to day one! And this is important: Once the stay is lifted, the foreclosure process will continue where it stopped! Let it go and get something when it sells. In most cases, that is nothing. The owner in this case lets the foreclosure proceed, and receives anything above the opening bid after all the junior liens are paid off. Walk Away.

This may be an economically valid alternative where the owner has very little or no equity, but the derogatory effect on the owner's credit rating will live with them for 10 years or more. The owner let's the lender proceed with the foreclosure. Now that you know the alternatives that are opened to sellers in foreclosure, let's look at some of the strategies I use to get the deal done. Rather than go through the mistakes of my early career, let me tell you what I know works. One of the things I learned early on in my investment career was that there were certain things I could do or say that could really alter the outcome of the negotiation with sellers! How do I know that they work?

Now it's closer to four out of five. When I started in the business, I could only close one out of every five deals I attempted. This, as you can imagine has meant a great deal to increasing my income, and it will for you also. First, when I am fairly certain that there is all of the things present that make a great deal and have reviewed all the numbers and have decided on my exit strategy with the property if I acquire it, I call the owner and ask permission to visit them at their home when all the people on the title are at home. Early moves set the stage for what happens later! Remember, I am setting the stage here! When entering the home, I look for pictures of kids, or anything that I can talk to them about to break the ice.

When I arrive, I introduce myself and ask the owner to give me a tour of the property. I also let them talk for as long as they like about how they got into their current predicament, and actively listen. Then we tour the house, and I may make some notes. I display empathy with their situation and tell them that they are not to blame, and that bad things happen to good people. At the end of the tour, I sit down with them and ask them to restate all the facts. I ask them what they would like to do, what would be their best outcome of our meeting.

Then comes my first crucial question. Once they realize that selling is the best option for them, I tell them about my company and what I might be able to do to help them. Most of the time they remember it, and I remind them that I have seen 7 other homeowner in the exact same situation this week, and I still have 2 more to see tomorrow! 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. I have a script that I have memorized, that continues to plant seeds that I am their best option. Later on, when we have agreed on all the terms of the sale, I introduce the'subject to' , where I will continue making payments on their loan, further increasing their credit score. I show them how I will make up the back payments on their loan, and immediately improve their credit rating.

This minimizes any future objection to taking over the loan still in their name. Then I once again go over all the terms before taking out the purchase agreement, but I make one last comment that it looks like I will be helping them. and those two people I was supposed to see tomorrow are out of luck, because I never take on more than four clients per month. Then it's a matter of agreeing on simple things, closing date, like moving date, etc. Saying this will help you handle any' we' ll think it over' objections should they arise. Be happy for them and show it! After all the paperwork is signed, I congratulate them on taking action and doing the right thing.

In review, it's important both to understand all the options a seller in foreclosure has, and how to position yourself with them as their best bet to help them. He is much in demand as a speaker on real estate investment topics throughout the country, as well as offering his own seminars and home study courses. Marko Rubel is a prolific real estate investor in the Phoenix, Arizona area. To learn more, please visit www. ProfitGrabber. com.