Establishing Contact with a Homeowner Prior to a Deed-Grab
When you write feeler letters to homeowners in property tax delinquency, you need to be able to anticipate the kind of calls you will receive. The way you handle these first phone calls from homeowners can determine the outcome of your deed-grab deals.
Some callers tend to be suspicious about how someone who is not an employee of the county could possess information about their tax sale. Others tend to be uneasy about how you located them at a new address. Usually, mentioning that you get all your information out of Internet searches and the public record is enough to assuage all fears. You simply need to tell them that you are a real estate investor who is in the business of picking up unwanted properties and helping homeowners make a little money.
It’s always a good idea to start out by educating your callers in the tax sale process, and then showing them how you have something to offer them that the default process doesn’t. Here’s a more detailed look at how to prepare yourself for most types of callers.
Owners who want some information to begin
If a homeowner first learns about his home making it to a tax sale through an email or postcard that you send out, he’ll call you himself. It’s usually a good idea to start out by explaining to the caller that he owes massive back taxes on his property, and that the county has a lien that it will shortly sell to a third-party investor.
This explanation helps in several ways. To begin, it gives you a chance to make the third-party investor look like the villain of the whole deal. By contrast, you get to emerge looking the part of the friendly professional trying to help. In many cases, setting up a contrast will result in the homeowner doing everything in his power to make sure that the villainous investor doesn’t get his home. He will want you to have it, instead.
You can also try to learn about how the homeowner came to fall so far behind on his taxes. The information you collect can tell you about his chances of being able to get money together to pay what’s due.
Owners who just want to let the property go
With some owners, it’s clear that they simply don’t have the money needed to redeem their home. These are the owners that you’re looking for. They have no choice but to give up their property. Once they accept this, your job will be to sound surprised, and to wonder out loud if you might get the property instead of the investor, to see if there is anything that you can do with it. You can tell the owner that third-party investors just take the property and walk. There’s nothing the owner gets out of it.
If he were to give it to you, though, you’d be able to pay him a couple hundred for signing the paperwork. It’s important to make sure that you mention that the money is for their time signing paperwork. If you make it sound like it’s for the property, they’ll feel insulted.
The owner who wishes to stay on
Some homeowners will ask you if you’re willing to buy the property yourself, hang on to it for a few years until they come up with some money, and then sell it back to them. This isn’t likely to be a profitable arrangement. It is even illegal in several states. You need to explain to the owner how you aren’t set up to finance homes. You can, instead, ask them to consider how if they don’t come up with the money, they might let you take over the deed.
Get all the information you can
Every homeowner that you call, you need to be sure to get a few pieces of information. You need their contact number, information about the general state that the property is in, about any judgments, liens or mortgages that the property may be subject to and about whether there are multiple owners to deal with.
There’s much more that you need to keep in mind when you speak to homeowners for the first time. The ideas here, though, should be a good start.