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It should go without saying that dealing with probated properties demands a level of sensitivity, beyond the rigors of a traditional sale. 

The executor is not merely feeling the loss of a loved one, but there are other dynamics going on. From my experience, the astute investor or agent that can help the executor navigate through these other issues will be successful. In this sense, you are not an investor or an agent - you are a problem solver and in some cases, a social worker. 

I recently designed a probate site for an agent that made it a selling point that she can secure the home of a probated property to keep out "self entitled" heirs from removing items and valuables from the probated property. She is doing well working probates because she is willing to enter into this frank, heart-to-heart conversation that doesn't couch words. The reality is, when someone passes, there will be family members that sweep in to claim belongings that they may or may not have an equitable right to. It becomes in many cases a free for all. The agent's call to action was to lock up the probated property like Fort Knox. 

In another case, an investor makes it a salient part of their probate marketing campaign to stress that they can remove belongings in a dignified manner, liquidating non-real property assets to generate cash for the estate OR donate items to charity, giving the family a sizable tax write off. 

I can go on about stories, but the quintessential point is that when working probate, you are less a real estate professional, and more social work. Oftentimes being a referee between heir in-fighting, 

When subscribing to a list of probate filings, some clients love us. Some of them hate us. It all boils down to the results. And among the successful agents and investors that are getting more inventory, there is one common denominator, I have found: They have a mindset of solving problems, and not just listing the house or buying the house. Their fundamental value proposition when working probate is to restore normalcy in a thorny process that often wedges family members against each other. As if listing the home - or buying the home - is almost an afterthought. 

It's really capsulized in the entrepreneurs creed, a plaque hanging on my wall that says in essence, "We are only compensated to the extent that we add value to other people". 

In other words, when working probates, listing or buying the real estate is the end goal, but what precedes it is building empathy and trust and creating harmony. The rest will follow. 

My job is to craft this message that resonates with executors tasked with the honor and burden of settling their loved one's estate. If you'd like to  have a website dedicated to probate, get in touch. 

Probates are the low hanging fruit because heirs want to cash out. Get an overview of probate investing in this blog post. While every case is different and the executor has their own unique time frame in selling the probated property, the biggest obstacle that blocks the executor from selling is the personal belongings that their loved one has left behind.

It is a gut wrenching process to dispose of these personal belongings. To everyone else, it is “stuff”. To the family, it is a treasure chest of memories. What if the family just is frozen and cannot finish the job? Providing assistance in removing these items in a dignified manner may just seal the deal in a probated property.

Yesterday, I spoke with an investor that relayed a story. Without much background on the house he was about to see, the investor showed up at a potential property to meet with a real estate agent. They walked in to discover a treasure trove of furniture and other items. “This is a great REO property”, the investor said to the agent, to which the agent said, “This isn’t bank owned. It’s in probate. The relatives already came to get the things they wanted”.

The investor, who also has a property preservation business, not only offered to remove the items, but to donate the items to charity for the estate to realize a sizable tax write off. The family paid the investor $7,000 to clean house and donate the belongings to charity, and the family claimed over $11,000 in deductions. That adds new meaning to “win win”.

That’s an atypical example, but the quintessential point is that if you – the investor or agent – can oftentimes seal the deal by offering your help in disposing of these non-real property assets. We know of several subscribers to our probate data that make “house cleaning” a prominent benefit of their service by offering to rescue vintage paintings, the 59 Corvette in the garage, the coin collection, the boat on the side of the house, and other prized items that the family simply does not know what to do with. In many potential probate deals, these gems may be the only thing standing in the way between you and a discounted property.

With an aging baby boomer population, the coming years will see the largest shift of wealth transferred from one generation to the next. At probateleads.net, our mission is to pair REALTORS and investors with executors that are motivated to liquidate the real property in the estate. 

In many locales, the attorney’s contact information is contained in our list of probated properties. It raises the question of whether you as a real estate agent or investor should make contact with the attorney involved in the estate.

This provocative question was posed in an interesting forum discussion on Bigger Pockets, raising several arguments for and against reaching out to the attorney that has their footprint in the probate case. To get the global view, read the entire discussion here.

In my own personal view, I believe that if your marketing budget persists, it is overall a good practice to contact the attorney, “leading in” with the probated property in question, but then launching into how you can be of value in other probate cases that come across the attorney’s desk. Some subscribers of our data use this strategy to get future referrals from that attorney. Of course, this takes time and the attorney has to see you in action to truly cement trust, but to the extent that attorney referrals can be a source of leads, I think that it is well worth it to get the conversation rolling with legal counsel.

Of course, if you do decide to contact the attorney, it should be in addition to, and not a substitute to contacting the Personal Representative, better known as the executor, who has the most influence into how the estate is settled because the Court has assigned them with the fiduciary duty of equitably divvying up the estate.

Scratching your head as to what to say to the probate attorney? Here is a sample letter that I came across as food for thought:
http://www.probateleads.net/SampleAttorneyLetter.doc (Word file)

I will elicit the thoughts of others – including yours – and update this post once the feedback comes in, so check back soon.

Until next time, A-B-C …. Always Be Closing.

I wanted to avail this post to provide an overview of the often overlooked but lucrative niche of probate investing. Literally TRILLIONS of dollars will be transferred from one generation to the next. Enter an aging baby boomer population and this fact of life will only balloon in the coming years.

Probate is the legal process to obtain the legal authority to act on behalf of the estate of a person who has passed (Decendent). The estate is distributed in accordance with:

1) The will of the deceased.
2) When a will is not present, the laws of intestate succession are applied. These laws parcel out property to the deceased person’s closest relatives.

Who’s the decision maker?

The decendent usually spells out who they wish to be in charge of their estate. Yet absent a will, the court will assign a Personal Representative (PR), more commonly known as the executor, who is tasked with the fiduciary duty of divvying up the estate to pay creditors and distribute the remaining proceeds to the heirs. While anyone can petition the court to fill the role of a Personal Representative, most states prefer the surviving spouse or registered domestic partner as the first choice, followed by adult children or other blood relatives. > Read more on the role of the Personal Representative and to familiarize yourself with other vernacular, view a glossary of probate terms here.

As a real estate investor, the main point to grasp from 40,000 feet is that the PR has been awarded the authority to sell the house. Your job is to contract it and buy it, or assign to another cash buyer. This is the crux of investing in probates.

Probates are the low-hanging fruit because the PR often has a heightened sense of urgency to sell the real property in the estate, for a host of reasons:

• There are taxes and other estate-related expenses that need to be paid, such as ongoing mortgage payments, utility bills and just about every other expense that is typical with an ongoing household.
• The heirs must pay the mortgage out of their personal finances, and this creates an urgency to sell the property as soon as possible.
• More often than not, the heirs do not want the house. They want the cash in the house. Heirs may live too far away from the property to play landlord or travel on a regular basis to maintain the property. Better to cash out and move on to build another chapter in their lives, than to be bogged down with the property.
• The PR may get in the middle of unfortunate heir in-fighting where heirs have disagreements as to their equitable share. This normally brings out the worst of people, and the PR has an increased need to liquidate the estate to end the fighting.

Investors that are able to make an early connection to build empathy and rapport with the PR and explain the benefits of working together will undoubtedly be successful. > See some letters that other investors have used to make an introduction.

The length of the probate process varies on myriad factors such as the complexity of the estate and intent of the parties – every case is different. Sometimes these deals seem to fall in your lap, as if the PR was waiting for your call. If only it was that easy in every case. One phenomena we see not uncommonly is that a living spouse remains in the house and may not be motivated to sell RIGHT NOW. A few months later, when bills are accumulating and they want to build a new life, maybe get closer to the kids, the timing is better to sell the house and move on. Since everyone’s timing is different in terms of when they want to sell the real property attached to the estate, we highly recommend a concerted, sustained “drip” campaign over time to keep your willingness to help settle the estate top of mind.

Generally, while the PR has been awarded the authority to sell the house to investors like you, some states may require the PR to seek the Court’s permission to sell the real property in what’s called a supervised probate process. It is prudent to check the laws and procedures unique to your county and state.

In future posts, I will delve more into the nuts and bolts of probate investing and bounce some other ideas around as to how you can capture your share of this niche market. Till next time, A-B-C… Always Be Closing!

At probateleads.net, our goal is pair REALTORS and investors with executors of probate estates that are motivated to sell by compiling a targeted list of probate filings in nearly every US county. If you found this article to be informative, let's continue the conversation. 

In the coming years, trillions of dollars will be transferred from one generation to the next. In real estate, probates are the low-hanging fruit because nearly always, the executor of the estate wants to sell the property at some point to pay for taxes and other estate-related expenses, pay creditors and distribute the proceeds to the heirs.

It's been said that knowledge is power. Armed with a list of recent probate filings in your area, you can identify the best opportunities in your area. Yet it is the application of that knowledge which is more powerful.

We've put together some sample letters that can serve as a springboard of ideas, when marketing to probates. > View the pdf letter samples. 

While postcards are cheap to print, cheap to mail and have no barriers to get opened, in our view a postcard is ineffective when marketing probates because it strikes as impersonal during this difficult period that the family is going through. 

For the best results, we recommend handwriting the envelope to create a personal look, touch and feel. 

Everyone has different time frames in terms of when they are ready to sell. For this reason, we recommend multiple mailings to keep your willingness to help "top of mind". Although the circumstances are different in each probate case, one thing we can say with a certainty is that once the executor wants to sell the property attached to the estate, they want to liquidate it quickly.

Any feedback or if you'd like to share any material that have produced results, we'd love to hear from you - certainly reach out. 

What does the Personal Representative, i.e., PR, Administrator or Executor responsible for? Bottom line, all you need to know as an investor is the court has awarded the PR absolute authority to sell the house. Your job is to contract it and buy it or assign to another all cash buyer. This is the crux of Probate Real Estate investing.

In common law jurisdictions, a personal representative is either an executor for the estate of a deceased person who left a will or the administrator of an intestate estate. In either case, a surrogate court of competent jurisdiction issues a finding of fact, including that a will has or has not been filed, and that an executor or administrator has been appointed. These are often referred to as “letters testamentary“, “letters of administration” or “letters of representation“, as the case may be. These documents, with the appropriate death certificate, are often the only license a person needs to do the banking, stock trading, real estate transactions, and other actions necessary to marshal and dispose of the decedent’s estate in the name of the estate itself.

As a fiduciary, a Personal Representative has the duties of:

    1.    Loyalty
    2.    Candor & Honesty
    3.    Good Faith

In the U.S., punctilio of honor, or the highest standard of honor, is the level of scrupulousness that a fiduciary must abide by.

Types of Personal Representatives include:

    •    Executor or executrix (term for females)
    •    Alternate executor
    •    Administrator
    •    Ancillary administrator
    •    Public administrator
    •    Guardian
    •    Conservator

The decedent’s usually indicate who they wish to be in charge of their estate. This individual will be known as the executor of the estate. Sometimes, there is also an alternate executor named in case the executor chooses not to or cannot perform the probate duties.

If the person in charge is female, she is known as the executrix. If the person in charge is male, he is known as the executor. If the decedent did not leave a will, any person can petition the court to be in charge of the estate. However, the court prefers a blood relative to become the administrator of the estate. In this situation if the person in charge is female, she is known as the administrix and if it is a male, he is known as the administrator. 

A couple of important documents you should be aware of are The Petition of Probate and The Letter Testamentary. The Letter or Testamentary gives the PR the authority, and the Petition for Probate gives the exact name and address of the Personal Representative. It’s important to note that these 2 documents will both be found in the Probate case files.

About

At probateleads.net, our goal is to pair REALTORS and investors with the Personal Representative by compiling a list of recent filings in your area. For expert consultation on how you can capture your share of this niche market by identifying probate opportunities in your market, visit our website or give us a call at 800-307-9124 for expert consultation. 

Have you ever worked probate leads? 

Reaching out to the Personal Representative/executor of a property that has recently entered into probate has paid dividends for many investors and agents because more often than not, the executor is motivated to sell, for a host of reasons: 

• The executor has to pay for taxes, ongoing mortgage payments, utilities and other estate-related expenses. Just about every expense that a household has to pay for, the executor must pay. 
• The estate has to be divvied up to pay the heir's their equitable share. Normally, the heirs do not want to play landlord, pay for upgrades or repairs, or otherwise be involved in the property, especially under the emotional circumstances. Better to cash out and move onto another chapter in their lives. 
• Heirs have to pay for expenses out of their own personal finances, and this creates a sense of urgency to sell the property. 
• Unfortunately, there are some cases of heir infighting, where the heirs have conflict over what they are entitled to, and this brings out the worst of people. The executor gets stuck in the middle, and in order to end the fighting, the executor is driven to sell the property as soon as possible. 

The challenge is in finding these probate filings. You would think that in this digitized world, you can easily log into an online portal and download what you need, right? Unfortunately, unless you are in a very small percentage of counties, it is not that easy. You then have to make a trip to the local courthouse and pull this data yourself, only to find it is tedious and time consuming. To make matters worse, the clerk behind the counter may not be the most supportive person in helping you find what you are looking for. I know of several people that have tried this and didn't have the time or stamina to complete it, and others that have done this but rarely undertook this once or twice more. 

At probateleads.net, we specialize in saving you the time, money and frustration of pulling these records yourself, by performing this task for you. There are variances from county to county, but generally what you get is:

• Name of the deceased 
• Property address
• Value of the real property in the estate
• Executor name and address
• Contact information of the attorney, when present

Armed with this information, you can be the first to reach out to the person that has been awarded the absolute authority to sell the property in the estate, show empathy and convince them that you can help them in their time of need. 

Want to bounce some more ideas around? Call us at 800-307-9124. If you found this article informative, let's continue the conversation on Facebook. 

Thinking of Short Sale Flipping?….Think Again.

In an Article in the Los Angeles Times Business paper, written by E. Scott Reckard published on-line 10/16/2013 @ 6:15am cst, he reports that a former Bank of America Corp. employee Kevin Lauricella was arrested on federal charges for accepting bribes in the amount of $1 million to allow homes to be sold far below their market value.

Based on the report, it appears that Kevin is indicted on 18 properties where he allegedly allowed them to be sold far below the price the bank would have accepted. These alleged transactions took place in 2010 and early 2011. To get the sales through the BofA system, Kevin is accused of falsifying bank records.

The buyers who bought these ridiculously low priced homes would then turn around and sell them for market value or even refinance them at market value, pocketing the profits. To better understand the allegations, see an example of a possible scheme below, not related to the specific allegations of Kevin’s.

Homeowner owes ………………………………………………………………. $100,000.00

Based on Sold comparables, his home is worth……………………… $75,000.00

Which means homeowners is upside down…………………………....$25,000.00

Buyer / Investor makes a low ball offer of……………………………….$50,000.00

BofA completes an appraisal and the home is worth……………..$75,000.00

Now, here is where it get’s fishy. Instead of BofA countering the buyer’s $50,000.00 offer with a counter of $75,000.00, someone at the bank has to do something to allow the $50,000.00 offer to be approved, even though it’s $25,000 less than what the bank could get on the open market. So, to more the story along, the bank approves the fraudulent $50,000.00 offer and the buyer / investor closes the deal on Monday. They then turn around and close the 2^nd deal….that’s right, the deal they had in their back pocket from a buyer who was willing to pay $75,000.00 for the property on Tuesday morning, making $25,000.00 in profit in less than 24 hours.

Now, the really sad part of this, the opportunity for fraud is rampant. It doesn’t take a cooperative bank representative to pull this off. In fact, I have seen this strategy myself, in play, here in my local market with corrupt appraisers. I have even been pressured myself, by buyers / investors to tell them when the appraiser is scheduled to be at the property so they can meet with them and give them their comparable analysis. These buyer / investors make it sound so reasonable, they say things like, “well, we want to write up the offer” or “we want to negotiate our offer with the bank direct” or “we can meet with the appraiser so he can see our comps”, etc…  however, it’s fraud!

In fact, this is happening so rampantly in my own market place, I was contacted by such a buyer / investor’s Realtor back on Sat 9/21/2013 @ 10:06pm cst through my email. That’s right, these fraudulent buyer / investors are enlisting Realtors to now do the dirty work for them, offering them “double commissions” or higher splits, playing on the agents greed. Sadly, the agent that contacted me is working with a well known Principal Broker in a very well known firm however, the firm is one of those 100% firms and they offer very little to no mandatory training and chances are, after drilling this agent via email about his actions, he may actually believe what he is doing is “the American way” of buying low and selling high.

This topic always seems to get a lot of response and most of the time, I am demonized and vilified saying that I have no business being in Realestate or, I have no clue what I am talking about however, you don’t have to take my word for it. If you really believe what you are doing is above board, legal….and some investors package you bought for $999.99 gives you a indemnity clause or a release of liability statement that says you can do what you’re doing, then I have one thing to say to you. Take your package you bought, take your forms you use and call my friends over at the HUD’s office of the OIG and ask to speak with the Lisa Gore, Assistant Special Agent in Charge or Harvey Wayne Martin, Special Agent. I know they would love to talk with you and answer all your questions.

Working with Non-Profits to Generate Short Sale Leads.

After my last two blogs.... (See Links Below)....

http://reopro.ning.com/profiles/blogs/the-liability-of-a-preferred-short-sale-agent

http://reopro.ning.com/profiles/blogs/the-short-sale-tsunami

I had a couple request for some more information on just how I work with non-profits to actually generate a short sale lead. So, this blog will do just that. It will be a longer blog than what my readers are accustomed to but, it's going to be full of good information.

First off, I have to admit, this idea really isn't unique to me. In fact, this method was manifested between myself and a friend of mine who was already working with a home crisis center here in Tennessee. You see, they were having a problem  with helping their homeowners who didn't qualify for any modification or home rescue program they had. Most of these people just ended up going into foreclosure and as many of you know, that wasn't what this non-profit wanted to see happen. In fact, their methodology, ideology and general operating standard was to move non-qualifying persons into short sale. They, themselves saw the benefit of short sale vs foreclosure and as such, elected to move these non-qualifying persons that route. The specific problem they were having was they couldn't find competent Realtors. In fact, it had gotten so bad and they had lost so many homeowners to foreclosure, they almost gave up the entire non-profit or at the very least, was debating to just dramatically reduce the number of people they were willing to help. This is where I came into the picture. To make a long story short, we turned it around and now, it's working very well for us all and in fact, we will be dramatically expanding with the help of a local bank.

So, based on my experience, you have two schools of thought. You can either start your own 501c3 based on rescuing people from foreclosure or, you can partner with a non-profit who is already doing just that. Now, the problem you will run into is, many of these non-profits will tell you that they can't have a preferred agent list or that they can't solely recommend you and that is for the most part, true however, not in all situations.

You see, many Realtors come to these non-profits with their hands out, like little birds waiting to be feed "free" leads and as such, these non-profits get nothing back in return. In essence, they are not willing to enter into an exclusive relationship because they have no benefit ...monetarily speaking. What I ended up doing was figuring out how these people got paid and from everything I saw, the grants they got were based on the actual number of people helped so, instead of coming to them asking for a lead handout and came to them giving them a lead handout. That's right, I flipped the script, which by the way, I am told I am good at.

What I mean by flipping the scrip is, I brought them leads. What I would do is, send out post card direct mailing to at risk neighborhoods...about 1000 - 2000 post cards at a time, so I was spreading a large net and out of those leads I captured, I referred them directly to my partner non-profit. This was great for them because, it ended up bumping up the number of people they helped and in return, increased their grant money. The deal was, every lead I send you....you must send back. Now, granted, I stayed in touch with my lead...I worked it, I emailed them, I called them, asked them how the loan modification was going or how the housing counselor was working with them so, they really didn't have to "send" anything back to me but, none the less, they knew if it was a Jesse G. lead, whenever the question came up about Realtor or real estate matter, the name Jesse G. flowed from their lips like milk and honey. In their mind, they weren't referring a Realtor, because the homeowner was already working with a Realtor (ME) when they sought out their assistance to save their home. So all they were doing was stating the fact back to the client, "Your Realtor, Jesse G. can help you with that." or "We will call your Realtor Jesse G. and let him know you are ready for short sale." etc...etc.... The best part was, they were happy to do that.

Now, the benefits to working with a non-profit that is already established seems pretty obvious to me but, let's go over some of those just to make sure you and I are on the same page.

Benefit # 1: No Cost

I had absolutely no out of pocket expense to get the full benefit of a certified, designated, industry respected home rescue non-profit to help my homeowners.  This was by far the biggest benefit, it cost me nothing.

Benefit # 2: Risk Management

Honestly, short sales will always have risk to the Realtor doing them however, because I am not involved in any of the Loan Modification aspect and hence, the realization on the homeowners part that a short sale is their best option, my risk is dramatically reduced. You see, I don't find myself having conversation with homeowners as to why a short sale is the best option and that is because, they have already exhausted all their other options through the non-profit. In other words, I don't get into sticky conversations or strange situations where the homeowner may feel that I am out to just short sale and make a quick buck. This way, my risk is managed through the use of the non-profit.

Benefit # 3: Ready, Willing and Able to Short Sale

By the time the non-profit is done working with the homeowner and it's come to the fact that they will have to short sale, by this time, the homeowner is ready, willing and able to list the home. In fact, when working with a non-profit, my short sale listing average is about 97%. Yeah, that's right, 97%. This is because the homeowner is much more ready, willing and able once they have spoken to someone who doesn't have a financial interest in the sale of their home and still end up being told, you need to short sale. At this point, many homeowners see it as a no brainer. Now, granted, some just don't get it, about 5% are simply going to stay in the home, not cooperate, get foreclosed on, get an eviction notice and about 3 months later, the Sheriff and the REO Agent move all their stuff to the lawn and lock them out. This is rare but, not so rare that I haven't seen it happen. None the less, 97% of the time, I get the listing.

Benefit # 4: Banks Cooperate

Because the non-profit has already worked through the banks home rescue programs and because most of these banks have policies and procedures that benefit homeowners who work with non-profits to save their homes, these banks cooperate. In fact, most of the time, my homeowners who have worked with the non-profit almost seem to get preferred treatment from these banks in the short sale process. Now, I haven't figured out completely why but, I really think it has a lot to do with the fact that these banks are regulated to "help" homeowners and if the homeowner works with a nationally recognized non-profit, like the one I work with, all of a sudden, they look good. So, when it comes time to short sale, they have all the necessary documents, they have crossed all T's and dotted all the I's. This was by far the biggest surprise to working with a non-profit, banks cooperate with them better than they did me on my own.

Benefit #5: No Additional Commission Splits or Referral Fees or Membership Fees

Because I am generating these leads myself, through my own marketing, I don't pay anyone for being a member of this network or that network, I don't payout a referral fee, I don't additionally split my commission.....all that I make is all mine.

Benefit # 6: Additional Leads Direct from the Non-profit

After a while, the non-profit and I had lunch and we talked about helping out the leads that I didn't bring in but they end up getting on their own marketing. Now, granted, for these leads, I couldn't be their exclusive agent, they had me on a list of 2 other agents but, guess whose name was at the top of that list.......yep, it was mine. Now, granted, I had to go out and win the lead but, it wasn't hard. Now, I can't say that the non-profit talked my up because, I really don't know, I am not a part of those conversations with the homeowner but, that 97% listing ratio includes ALL leads, mine and those exclusive to the non-profit....you following me?

So, that's the jest of how I work with an existing non-profit in my area. Keep in mind, your success still depends on you and the marketing you do. Granted, my marketing is something I keep close to my chest but, if you want to learn a little more about what I use for marketing...and yes, I only use one marketing strategy right now and yes, it works well, email me directly and I will talk to you about it. No, this isn't a solicitation by the way, I will share my strategies for free, if you can do the same.

I have received several emails and contacts from agents asking about a newly formed group that is soliciting memberships by the name of US REO.  They are asking for over $2000 annual in dues to "join their membership".  Their benefits are nicely laid out on their web site and there is nothing there that I can see that is worth 10% of their $175.00 per month dues.  I can find most of what they offer for much less or free for that matter.  We network with other REO Pros right here so why would you want to pay them for this service?  It seems like every one of these "member only" groups has a claim somewhere that would make you think that they can expose you to vendors and lenders to get REO Listings so let me ask you this, WHO HAVE YOU PAID TO GET LISTINGS?  I have been listing and selling REO's for over 20 years and have never once gotten a listing from a pay to play or "platinum" upgrade from any platform.  I get them the old fashioned way.  I send out resumes and signe up for BPO & REO sights each and every month, month after month, year after year, and work my way up the food chain.  I have two successful REO Branches and even in this slow time I am still listing and selling multiple REO's every month. 

BUYER BEWARE....If someone wants you to pay an annual fee, monthly dues, or upgarde fee only do this when they can guarantee you work. I bet not one of them will make this guarantee. I know I have been there and done that and all I got was less money in my bank account. Getting listed on some directory on someones web site is NOT going to get you business.  Good old prospecting will.