Questions to Ask Homeowners in Distress

In this business, it is imperative that you ask questions. You don't want to waste the homeowners time but more importantly you don't want to waste your time. Most likely, you already know these homeowners are motivated because they will be calling you for help from ads you've placed in the newspaper or letters you've sent out. So here are some basic questions you can ask and information you need to get to proceed.

Get the Name of the person.

"Are you the owner or agent representing the property?"

"What is the sq. ft. of home?"

"How old is the property?"

"What improvements have been made on the property?"

"How many bedrooms/bath?"

"How old is the roof?"

"Have you had a recent inspection on the property?"

"How long ago and what kind of inspection was it?" (termite, home)

"What is the address of the property?"

"What is the City, State, and Zip?"

Ask about the neighborhood; what is it like? (i.e., commercial, residential)

"Why are you selling your home?"

"How long have you lived in the home?"

"What did you pay for the property?"

"Have you had any offers? How many?"

"How long have you had it on the market?"

"Have you ever had the property under contract?"

"What is the property worth?"

"How did you come up with that price?"

"What improvements have you made to the property since you have owned it?"

"Do you know of any repairs needed to the property?"

"What are you going to do with the property if it does not sell?"

"Have you had the property appraised recently?"

"Tell me about the loan. How much do you owe on the property?"

"How much is the 1st mortgage?"

"How much is the 2nd mortgage (or Home Equity Line of Credit)?"

"Is there a 3rd mortgage? If so, how much is it" (very rare there is a 3rd)

"Are you able to do any creative financing?" (i.e. purchase “subject to”, carry some of the note, balloon payment, seller financing)

Don't just limit yourself to these questions. Every deal is different, and other questions will arise. Once you're in the home, you need to find out as much as you can about the property; what the property is worth, what options you have and if the homeowner is ready to get out. Be sure you have all your documents there in hand ready for them to sign if it's appropriate. For most people, this is a touchy subject, so you need to be careful what you say to these people. Here are some things you should avoid saying:

“Yes, Joe, I found out you are in foreclosure…”
“The auction is coming up Joe. What are you going to do?”
“How did your home get in foreclosure in the first place?”

Here is a simple guideline you can use when you receive a call from a homeowner in foreclosure.

1. Introduce yourself.
2.Thank them for calling and ask them when you can stop by to see the property.
3.Ask questions and get the details.
4.Verify the home has enough equity in it to make it worth your while.
5.Get them to sign a purchase agreement
6.Be prepared to close in a few weeks.

In some cases, where you would have to drive 30 miles to see a property, it’s not a bad idea to ask a few more qualifying questions first to avoid wasting your time. However, it is best if you can sit down with the homeowner to establish a relationship of trust and then sincerely find out why they want to sell and what they want out of the deal before you tell them all the options they have.

It’s also important that you make sure all the owners of the property are present when you come. This will make it much easier when you begin to negotiate and if you need them to sign the purchasing agreement. Also ask them to find all their recent loan statements so you can look at them. This information will help you make your decision. Make it a habit to always have a purchase agreement with you at all times so you can fill it out and have them sign it right there on the spot.

In the meantime, Good Luck with your investing.

Jarad Severe