Using direct mail and handwriting your correspondance

Based on the feedback I've received from our clients that are contacting homeowners in pre foreclosure, direct mail has been the best marketing vehicle for more short sale transactions. I say that with a few caveats.

First, I'm a firm believer in the omnipresence of marketing. If I had to chose one lone method to advertise to troubled homeowners, it would be direct mail, but it is more effective when used in parrallel with other communications. For example,

Day 1: Send a letter to Bob and Sally, who are falling behind on their loan payments.
Day 5: Follow-up with a phone call.
Day 10: Send a post card to Bob and Sally.
Day 15: Having established name recognition, take the personal approach and knock on their door.
Day 20: Send out a follow up letter.

You can use synergy when using direct mail in conjuction with other techniques. In other words, two plus two isn't four. It's five.

Secondly, I have seen campaigns flop because the mail piece looked too salesy or did not grab a reader by the eyeballs in a couple seconds. Savvy consumers have a very brief attention span and as a marketer, you have a small window of opportunity to command their attention.

Whatever you send to homeowners that recently missed a mortgage payment, it has to be opened to be effective. Anything that remotely looks like a bill will be chucked. Especially in competitive markets, anything with laser jet labels may not get opened either, because it looks like an advertisement or a letter from a bill collector.

If you want to send a letter to a troubled homeowner and you want a guarantee that it will be read, how about handwriting it? There is nothing more personal. In today's world of technology, people don't get something in the mail that is handwritten. When's the last time you did? Was it Uncle Tom wanting to wish you a Merry Christmas or Happy Birthday? Or was it when you received a wedding invitation? Happy moments of correspondence, right? Handwriting a letter offering your help WORKS and works REALLY well. Here's 3 techniques to harness the power of the handwritten word....

1. "The Yellow Letter" -- this is a very powerful method of getting your direct mail opened. Handwrite your foreclosure marketing message in a blank sheet of paper. Here's how. Put a legal notebook pad BEHIND the white sheet of paper so that you can see the lines through the blank sheet of paper. Now take your black pen and handwrite your marketing message on the white sheet of paper. Leave the first couple of lines blank so you can write the name. Go to a copy center and make copies of your handwritten letter, but print it onto yellow legal notebook paper--the kind that you rip of sheet by sheet. Now you have hundreds of handwritten letters. All you do is then write the person's name at the top of each sheet such as "Dear Mary" and it will look like you handwrote the letter to the person.

2. Handwritten Postcards -- Get a blank sheet of white 8.5" x 11" paper and face it in landscape mode. Divide it into four quadrants equally. That will be the size of each of your postcards. What you do is to handwrite your message on each quadrant on the paper. That will be your foreclosure marketing message! Leave space at the top to write a name if you'd like. If you plan to put information on the BACK of the post card, get another blank sheet of paper and divide into 4 quadrants and handwrite your message as it would appear on the other side of the post card. Don't forget to leave room for the address and the stamp on the other side. Then take these two sheets of papers to your office supply store and have them photocopy these two sheets of paper into a hard cardstock, bright-color pastel colored paper and that will serve as your post card. For postcards, you can actually stick labels onto the other side since the postcard doesn't require the person to "open up" the mail.

3. Handwritten envelope -- do you want to triple your response rate? Handwrite your envelopes and put a first class mail stamp at the top. People WILL open up this mail. Why? Because it looks like it came from Uncle Bob. For best results, you can hand write the return address as well. You can use a regular envelope or an "invitation-sized" envelope for an even more powerful effect. Make it look like they are getting a birthday or wedding invitation. I have heard of people getting double digit response rates with this method.

This takes some extra time, but it is well worth the extra response. No one says that YOU have to be the one to do the handwriting. Whether it is a high school kid looking for a few extra bucks, a stay at home mom or someone retired that can invest a few hours handwriting, there are other people that do this cost effectively. How about putting an ad on craigslist? Especially in the down economy, there is no shortage of people that can pick up the pen.

Get your foot in the door - literally

Hi, and thanks for reading. In my last blog, I said that it is paramount to establish trust with homeowners that are in pre foreclosure. To do this, it's important to put your message in front of troubled homeowners on a regular, repeated basis, and answer their fundamental question: WHAT'S IN IT FOR ME? Focusing on your credentials and features are not enough. Instead, a troubled homeowner has to know that by working with you, there are emotional benefits such as the ability to sleep peacefully at night and the relief of letting go of the ton of bricks on their shoulder.

Now I'll delve into the topic of how to approach these troubled homeowners, whether by mail, phone or in person.

In this entry, I'll explore door knocking. It takes a special kind of person to knock on doors, but that talent can yield tremendous dividends. A regular client, a Century 21 broker in California, is adament about dispatching his associates out to the homes in person. "We have only one shot to get through to these people", he says, "and we don't want to blow it."

In short saless, nine-tenths of the deal involve negotiation. You'll have to make an emotional connection with the parties involved to close the deal, and what better way to build that rapport than to deliver your message of a fresh start in person?

It is said that consumers are bombarded with over 3,500 advertisements a day in one way or another. It is difficult for even the best marketer to cut through that much advertising clutter. With so many ads offering to save a homeowner from foreclosure, a realtor or investor that takes the personal approach by taking a troubled homeowner by the hand and walk them through their alternatives will be a winner.

How many radio or newspaper advertisements can pull a football fanatic out of his chair, during an exciting football game, to see or hear your advertisement? The answer is NONE. One-on-one door knocking is powerful and effective because it searches and finds your prospect and delivers your message face-to-face. No other marketing medium has that impact. How do you harness that power? Step right up to their front porch, take a deep breath, and knock on their door. When the owner pokes his nose out and asks you what you want, you have to know what to do next.

Getting Inside

(1)Have a script prepared. First impressions are especially important when talking to a troubled homeowner because of their emotionally charged hardship. You have a small window of opportunity to introduce yourself as someone that genuinely cares about their situation. It's like theature. To create the emotional excitement of the audience, the actors are scripted. In the same way, to create an emotional connection and build trust, you should be armed with a script. Many investors mistakenly wing the first words out of their mouths in a pre-foreclosure deal and never recover. I'm a firm believer that even the best salespeople should have a script.

(2)Ask to come inside. Many novice investors erroneously think that the deal is going to be made right on the porch. A troubled homeowner will work with you only if they trust you. If you launch into your pitch on their porch, you will only convey that you are a slick salesperson that wants to profit from their loss. After the preliminary introduction, try to face them in the place they feel most comfortable – the kitchen table.


Making Conversation

Talk for a few minutes. It's important for the homeowner to view you as a person, not as an investor. Share some information about yourself and ask for the same in return, so that it doesn't feel like some kind of akward "first date."

Avoid using the term 'foreclosure' at all costs. "I noticed that you weren't keeping up with your payments" or, "I saw that you were late on your mortgage" is a sure way to get booted. The key is to not imply in any way that the pre-foreclosure is the homeowner's fault. If the homewner feels that you are not on their side, they will not trust you. A better approach would be to say that you noticed in your research that they were having problems with their property, or that the bank may foreclose on the property.

Tips for Good First Impressions

1) Don't hide your face. When a homeowner looks to see who's knocking, you'd better look non-threatening. Leave the sunglasses and baseball cap in your car, and pull long hair away, too.

2) Keep your hands in plain view.

3) Be casual in your dress. No suits or bling like expensive jewlery. The homeowner does not want to be reminded that as an investor, you stand to profit from selling their home. A Rolex or flashy car will only stress to them that you will make money from their hardship.

In short sale marketing, it's critical that the homeowner likes you, knows you, and trusts you. Until then, the "deal" is secondary.

As a final thought, I believe you should have something to leave if the owners are not home. Door hangers are cheap to print, and are screaming to be read.

Feedback is most welcome. Email me at jim@homesteaddata.net or call me at 607-759-5058.

Gaining the trust of troubled homeowners

Jim Rutkowski here of Homestead Data. In my introductory post, I ended by saying that investors will be successful if they help troubled homeowners during the tumultuous period of hardship they are going through. Yet how do get a troubled homeonwer to work with you? The answer is they have to trust you. How is trust developed?

First of all, trust and rapport can be established through repetition, which builds familiarity and in turn, credibility. The reality is marketing has never meant to be, and should never be a one-time shot. It may take several points of contacts, or "touches" to establish credibility. One mail piece, one phone call, one knock on the door may not be enough. People respond to repetition, like a parent that finally gives into repeated requests from a child that begs for a piece of candy or a new toy. Publisher's Clearing House is successful because they understand the principle of repetition through repetitive mailings over time. The law of repetition states that any marketing communication is most effective when it is repeatedly brought to the attention of your target market.

Secondly, in order to gain the trust of troubled homeowners, you must make an emotional connection with them. You will not be initially persuasive to homeowners presenting a spreadsheet with numbers, because as world renowned sales trainer Zig Ziglar said, "People buy on emotion and justify it with logic." The logic only comes after a homeowner opens up and makes the decision to work with you based on their emotion, or gut feel.

To make this emotional impact, it is helpful to think in terms of benefits, NOT features. If you buy a $500K Ferrari sports car after you make a ton of money in the short sale business, why will you buy it? It won't be because it is made by the best European car designers, or the hand-made Italian leather seats and expensive coverings. Those are all features. Rather, you will buy the Ferrari because of its benefits... you'll buy because you'll turn heads by having the most famous sports car in the world, you'll be recognized as someone with style, flair and class, and be envied by your peers. The diamond industry is masterful at selling on the benefits. Think about it - why would someone want to buy a rock from the earth? They wouldn't. They will buy a rock for the moment a woman looks deeply into their eyes, a moment that seals their love and union forever. All benefits are emotional. Alarm systems sell because people want to feel safe and secure. Ipods sell because people want to feel a sense of belonging by taking part in a powerful trend.

It's not about you or your realty, or even your expertise. It's about them. How you will help them solve their problem, how you will make their lives better, and most of all, how you will make them feel good.

"We helped 28 clients this month avoid foreclosure" is a feature, not a benefit. "We are a member of the better business bureau" is another feature that will not win the trust of homeowners that are headed for foreclosure.

What then, would be an example of benefits? You can:

- Get them from underneath this financial nightmare
- Allow them to sleep soundly at night for the first time in six months
- Allow them to get the best financial solution that's legally available
- Help them move on to build better memories
- Return to their normal day-to-day routines
- Etc.

You must first solve homeowners problems on an emotional level to build trust and rapport so that a homeowner agrees to work with you. Citing your credentials are fine, but it is the emotional connection that will win you over. Once you describe the benefits of your service to homeowners, they will come back to your credentials later.

Jim Rutkowski is the managing partner of Homestead Data, a company that is dedicated to providing timely, accurate, easy to understand data from the credit bureau on homeowners that are 30, 60 or 90 days late on their mortgage payment. Armed with this data, realtors and investors can be the first and the only one to offer their help, and have months to resolve foreclosure situations. Contact Jim at 607-759-5058 or by email at jim@homesteaddata.net.

Introducing my blog on pre foreclosure marketing

Hi all,

Jim Rutkowski here and I talk to a lot of realtors and investors day in and day out, and one common question I'm asked is what the best way is to market to homeowners in pre foreclure. I've entered the blogosphere in an attempt to answer that question.

I don't profess to know your game better than you do, but perhaps I can be a springboard of information. Having talked to so many real estate professionals and seen so many marketing campaigns, hopefully I have a good antenna to know what works -and what doesn't work.

I've rarely talked to a realtor or investor that truly enjoys doing short sale transactions. Yet short sales are the realty we're faced with today. They are simply unavoidable. The finger can be pointed to many forces and factors, although I don't find it productive to assign blame. Instead, I want to avail this forum to focus on profiting in distressed homes and help homeowners with a dignified solution. Sure, we're all in it to make money, but if we can help troubled homeowners preserve their day-to-day affiars, their credit and a sense of normalcy, all the better.

Owning a home is a wish envisioned by almost every couple in America but actually acquiring one can be either a dream come true, or a nightmare in disguise. Affording that home consists of having the credit rating to find a good loan to purchase it and enough financial where-with-all to make the monthly mortgage payments on time when the due date comes. If a homeowner misses one payment and get behind, it is hard to play catch-up and some never do. The unthinkable happens and they find themselves in default on both the loan and on the mortgage.

Imagine a homeowner has defaulted on a home loan and they are worried that the lender is going to come to take their precious home away and leave them with no hope of closing the loan. The spouse is staring at them to do something, the kids are crying, worried that the Internet connection is going to get cut off and the homeowners are looking into a pile of bills that seems to just keep getting bigger and bigger

This grim set of circumstances is all too common, for varied reasons. The number one reason many consumers default on their loan is unexpected expenditures, which happen suddenly, or an unanticipated emergency. More people lose their homes because of illness, the loss of a job or marital discord than any of the other reasons. Of course, this problem has been compounded by borrowers aggressively seeking less than perfect loans and homeowners that have used their home as bottomless piggy banks. According to this REUTERS article, Housing risks still lurk even as buyers return, the housing market will likely decline further due to continued pressure from adverse economic forces.

Regardless of the varied reasons for hardship or what has set the stage, a homeowner that has recently defaulted on their loan payment is in a very stressful prediciment. Oftentimes, they cannot see the forest from the trees.

The adept investor that can empathise with thier plight and help them through this difficult period in their lives will undoubtedly be successful.