My students always ask me “How many letters do we have to mail in order to get a deal?” Before I answer, I want to state that the #1 reason a Seller sells their house for less is because they are motivated. An unmotivated Seller will not take less for their house, as they are not in a hurry to sell. Let me clarify the situations that make a Seller motivated:
- Property is upside down – they owe more than it is worth.
- Property taxes have increased and they can’t afford to pay them.
- Mortgage interest rate(s) adjusted to a higher payment that they cannot afford.
- Job Relocation and they can’t sell the house fast enough.
- Divorce or Separation will send individuals into foreclosure because they depended on two incomes.
- Job loss or reduction in their income.
- Bankruptcy – For most people who are upside on their bills, it also includes their house payment. It is important to know whether or not your Seller is in bankruptcy or planning on it. No transfer of a property can be done while the Seller is in bankruptcy.
- Retirement causes a reduction in income.
- Insurance rates have been increased and they can’t afford the insurance.
- Illness, Permanent Disability or the Death of Spouse/Family Member causes individuals to get behind on their payments.
- Exhausted Landlords – Most of the time, the Landlords had great credit but the Tenants won’t pay and the Landlord may have used up all of their financial reserves.
- Economic and Functional Obsolescence – The Seller may own a residential property, but it’s located in a commercial district. The floor plan of the house is old and chopped up.
- Business or Partnerships failing
- Vacant House
When mailing to someone who has one of the above situations, then you have a higher chance of the Seller selling their property for less. How many letters do you need to send to Sellers saying that you want to buy their house for cash before you get a deal? You should mail at least 1,000 letters to Sellers who have a “minimum” of one of the above challenges. Should they have two or more challenges on the list, you have a better chance of getting a minimum of one deal. Therefore, the criteria for compiling your mailing list will directly affect your capture rate. Mailing 1,000 letters to a bad list with irrelevant criteria will only bring you frustration; it will not get you a deal. There are many list providers; I use Reifax.com for a list of individuals who have foreclosure actions filed against them. I fine tune my criteria to select Sellers who have been in foreclosure for a minimum of 3 months. The reason I do this is that the Sellers have attempted loan modifications and have already made a decision as to how to proceed on the foreclosure action. Or should I say the likelihood of them responding is much higher versus when they are first served with the foreclosure action.
In addition, the content of your marketing letter is equally important. I have used multiple types of marketing letters and business letters, and tested them against the “Yellow Letter.” I found that the “Yellow Letter,” since it is handwritten and mailed in a handwritten invitation envelope, will pull much better than a typed business letter in a business size #10 envelope. The reason for this is because most Sellers in foreclosure are not opening their business envelopes, as they are in denial of their situation. However, a handwritten invitation envelope makes them think that someone knows them and they are sending them a card – like a birthday card. In addition, they are hoping that there may be money in it and there is! They can sell their house for cash!
Marketing is the key to your success in getting more deals. It is a Sellers’ market here in Florida and getting a Seller respond to you will increase the amount of deals that you would get versus making tons of offers on the Multiple Listing Service. However, I am not saying that you shouldn’t make offers through the MLS. I am suggesting that if you are making offers on the MLS, look for key criteria words such as: motivated seller, TLC, handyman special, short sale, vacant, immediate occupancy. These are some of my key words that I search for when making offers through the MLS.
So … continue to mail your letters and check your list to make sure that you are actually targeting a list of motivated sellers. Please do not mail letters to a generic list, use your marketing dollars wisely. You need to have 5 types of marketing in order to bring you deals:
- Bandit Signs
- Business Cards
- Advertisement in the Newspaper
Should you not get any deals after marketing to at least 1,000 letters, please stay positive and press in! Do not give up. Keep marketing and evaluate your list and marketing letters. The deals will come if you keep marketing! They will!!
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Kimberlee Frank Broker Short Sale Expert
Kimberlee Frank is known as “The Real Estate Junkie,” for her unique ability to find ways to creatively help buyers and sellers no matter which direction the real estate market is heading. Kimberlee had already worked as a legal administrator for an Attorney, Builder and Broker for 18 years when she began her Real Estate career in 1998. She dotted the i’s and crossed the t’s on hundreds of real estate transactions and thousands of documents, making her an expert in real estate documentation. Kimberlee’s success began in Fenton, Michigan. She specialized in selling, purchasing, renovating, retailing and lease optioning single-family homes. She has helped many sellers get rid of their “headaches” and helped many buyers find their dream homes!
Since 2003, she has specialized in foreclosures and short sales. After realizing how many families were being forced out of their homes due to financial difficulties, Kimberlee had a heartfelt obligation to use her experience to help those families. She has mitigated and closed over 500 short sales with the mortgage companies, saving Sellers from going into foreclosure. In 2006, Kimberlee and her family moved to Florida. She lives in Oviedo and her Sell Fast Realty Office is in Winter Springs, serving residential and commercial sellers and buyers in multiple counties in Central and Southern Florida.
Kimberlee is also a Trainer and Mentor and has created several different “How To” systems on real estate. Her unique strategies continue to educate real estate professionals across the country. If you have a proven system to help others out of hardship, why wouldn’t you duplicate it and share it with as many people as you can? Kimberlee continues to work with this philosophy!
Kimberlee Frank has been featured on ABC, NBC, FOX, CBS as well as Wall Street Journal, Newsweek, USA Today and numerous other publications. She is the bestselling author of “Big Ideas for Your Business” (Advantage Media 2009). She was also selected as the #1 Short Sale Expert by America’s Premiers Experts.
Please contact Kimberlee at her office at 407-888-3433 to schedule a Free Facts About Foreclosure Seminar. She has numerous testimonials from sellers, buyers and other real estate professionals who are familiar with her giving heart. Whether it is 1 person in need or 1,000…..Kimberlee will educate them on real estate and give them a solution with a peace of mind!
Are you unsure what to do with your house? Do you need to educate yourself about your options. Click the following link Free Facts About Foreclosure for more information.
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