Your exit strategy is how you go about selling that foreclosure property. It’s an essential part of your business. You’ve submitted the short sale deal, worked through months of negotiation and finally gotten your price. Now it’s time to sell the house!
It’s easy to create a great exit strategy. Below are some simple steps to take as soon as you complete that short sale deal to secure your foreclosure property and get it sold. If you are planning on setting up a double close or simultaneous close you’ll have between 30-45 days to find a buyer to take the property, so you need to have a good exit strategy in place.
1) Lock Box. The first thing you will want to do is go out to the foreclosure property and get a lock box on it. These cost from $30-40 apiece at a hardware store and put the lock box on the door. This makes it much easier to show the foreclosure property. When a buyer calls to look at the property, just give them the lock box code so they can go look at the property anytime. It’s much more convenient for you and the buyer.
2) Staging. You’ll need to stage the house. This is inexpensive and costs about $300. Have the property cleaned up. Turn the utilities on and have them running, especially in wintertime (lights and heat). Buy some knickknacks for the kitchen and towels for the bathroom. Consider buying a candle warmer ($10 at Wal-Mart) it warms the house and creates an aromatic atmosphere. You’ll want to check the house every morning and night to turn on lights, unplug the candle warmer and vice versa.
3) Bandit Signs. Put up a few ‘for sale’ signs in the neighborhood. Also called, bandit signs, they are very important for getting attention. Handwritten signs tend to get a better response than formal, printed-up signs. One sign in front of the house will not make your sale. A comprehensive campaign involves 50 bandit signs per property. Use directional arrows on the signs. Your signs should also contain pertinent information, including a phone number!
Several companies provide an automated telephone message service such as, Automatic Response Technologies. When someone calls this number your recorded message describes the house (square footage, description of house, where it is, finished basement, etc.) so you don't waste time talking on the telephone an exit strategy no-no. Most 1-800 number companies will also capture the number of everyone who calls in, so you can follow up later and find out if they have an interest in the house.
l You can offer your property at $20,000 below market value and still make a generous profit. This marketing strategy gets people’s attention, mention this on your signs!
4) Brochures. Make up a tri-fold brochure for each property. You can create these with your own word processor. The process is easy for each house with the same type of content for every brochure. List the price your want for the house and its higher market value, include your phone number, the price of the property, and additional information (amount of taxes, condominium fee, square footage, number of bedroom and bathrooms, etc.)
Print about 100 brochures per foreclosure property and tack them onto the front of the house or the bandit sign stake in light plastic info packs (less than $1). Check back frequently to keep plenty of brochures on hand.
5) Website. You should have a selling website for your real estate investments. There are several inexpensive sites available (see link on RealEstateInvestor.com). Get a selling website and post a photo of the house on your site. Have this site in place and ready before you get the approval. This is essential to the exit strategy.
Some free websites allow you to list your house. Most investors have good luck using Craigslist. See if there are any other sites providing free real estate listing services in your area.
6) Postcards. Send about 1000 postcards, expand or contract your mailing radius so that you have 1000 addresses near your property. You will be surprised how many times you find a cousin, aunt, daughter and so on of someone living in that neighborhood who is looking to buy a house.
Several Internet-based services send postcards. Links are available on RealEstateInvestor.com. It costs approximately $400 to send out 1000 postcards. This is inexpensive when you’re going to make $20 to 30k in profits. Hook up with a mailer, (Expresscopy.com, postcardsplus.com, U.S. Postal Service) and get your postcards designed. The postcards need to go out as soon as you get approval.
7) Classified Ads. Run an ad in the local paper. A Sunday ad gets the best results and is economical. Find out the newspapers deadline and start ramping up your ads.
Create this classified ad with the city and neighborhood of where the house is located on the top left hand side. The next line down is all caps, centered—the only word on this line is FORECLOSURE. Drop to the next line, centered, and mention something like “20K Below Market”. Drop another line and list the address, how many bathrooms, bedrooms, square footage. Drop again and put the Market Value (you can also say “originally sold for” and the market value). Drop down to the next line, centered, and put “Our Price $$$” and your phone number.
On the last line, advertise your selling website address, this way people can go to your site and get more information and a picture.
8) Open House. Many realtors scoff at the idea of open houses, but it’s quite the effective exit strategy. Create a classified advertising the event. You may want to set the open house during the second weekend after you get approval. A Sunday open house is good for attracting the most customers. On the Friday before the open house go out with 50 more signs advertising the event. Put one of the new signs next to each of the 50 signs you put up earlier. Include the directional arrows.
This way you’ll have a lot of people going through your house. Have refreshments available. Make it an event. Let people sign in with their contact information. Hand out your flyers and make salespeople available to handle flow through the house.
9) Auctions. If you’ve gone through all 8 steps and still don’t have a contract on the house, try the auction process. This is a method of last resort. Start a week ahead, send out postcards, flyers in the neighborhood, put ads in the paper and put out more bandit signs. You can also hire college kids to stand on the corner with a sign on a post. Once again, create an event. Round robin auctions are lively and effective—more information on Real Estate Investor.com.
These are not “pick-and-choose” steps for an effective exit strategy. You have to use all nine steps as soon as you get sale approval. Don’t do one step and wait for it to work before you begin the next step. Start on day one, or at the latest day two, if you want to sell that house within the 30 day period.
Original Article:
http://www.realestateinvestor.com/media/blog/4136/
