Mailing for Dollars

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:

1. Property is upside down – they owe more than it is worth.
2. Property taxes have increased and they can’t afford to pay them.
3. Mortgage interest rate(s) adjusted to a higher payment that they cannot afford.
4. Job Relocation and they can’t sell the house fast enough.
5. Divorce or Separation will send individuals into foreclosure because they depended on two incomes.
6. Job loss or reduction in their income.
7. Bankruptcy – For most people who are upside down 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.
8. Retirement causes a reduction in income.
9. Insurance rates have been increased and they can’t afford the insurance.
10. Illness, Permanent Disability or the Death of Spouse/Family Member causes individuals to get behind on their payments.
11. 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.
12. 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.
13. Business or Partnerships failing
14. 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 to 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:

1. Letters
2. Bandit Signs
3. Business Cards
4. Websites
5. Advertisement in the Newspaper

Should you not get any deals after marketing with at least 1,000 letters, please stay positive and press on! Do not give up. Keep marketing and evaluate your list and marketing letters. The deals will come if you keep marketing! They will!!

Thank you so much to all of you who continue to send me your questions and topics that are most helpful for you to read about. Your Success is important to me, please let me know how I can help!!!    

Happy Negotiating!

Kimberlee Frank