How to Help A Seller in Foreclosure
Investing in foreclosures can not only bring lucrative deals into your real estate investing business, but it also gives you the ability to help people that may have ended up in a situation where they are doing to lose their home, and potentially a lot of money.
When you help a seller who is in foreclosure and you explain the methods you will use to close quickly and get them out of their situation without a big hit to their credit, most people will be grateful.
They may not get top dollar from you, but that is unrealistic for someone who is underwater on their home and about to face foreclosure. You aren’t giving them the perfect resolution, because they are not in the perfect situation. If you don’t buy the house and the foreclosure process goes on the seller is facing:
- Eviction – If the house goes into foreclosure the homeowner will have no control over when they will need to move out.
- Damaged Credit – A foreclosure proceeding stays on a credit report for seven years.
- Deficiency Judgment – If the foreclosure proceedings don’t pay off the balance of the loan.
- Potential Tax Implications – The homeowner may get a 1099-A after facing foreclosure, which affects their taxes that year.
If they work with you, you can help them by:
- Reinstating their loan
- Catch up their payments
- Close quickly
- Help them improve their credit by avoiding foreclosure
- Giving them some flexibility on when to move out
- Giving them cash to move out if they need it, and it works as a part of the deal
As you can see, it a much better situation than the alternative. You may not have given them full price, but they weren’t in a situation where that was going to happen anyway. You come in and buy the house for the balance of the loan, give them time to move out and you get a deal on the house. Don’t think of buying foreclosures as a bad thing, it is a good thing for everyone involved.
In my business, I like to put myself in the seller’s shoes when I am doing a deal. I ask myself, “if I was in their situation, what would I need to get out of the situation as favorably as possible?” I only get involved if it is a win-win for both parties. I always say that you should treat people in life the way you want to be treated, even in business.
To learn more about my proven methods of investing in real estate without using your own money or credit, check out my free Unlimited Funding program or Foreclosure Investing Mastery.