A pre foreclosure letter is typically from someone or some company that is searching the market for a home or property that matches yours. These letters can be very honest investors or potential homeowners that are trying to buy property, however they can also be from very unscrupulous investors or scam artists that are just as predatory as some of the lending practices that may have lead to your financial problems.

Looking at the pre foreclosure letter with a clear head and not from a position of desperation is essential if you want to sort out the real potential buyers from the potential con artists. It is also important to know your options as a homeowner in pre foreclosure, as not all the information in a letter may be factual or even applicable in your state. Often with large national or even state wide home buying companies the pre foreclosure letter will be generated by a computer, however it may be very cleverly mail merged to make it look like a letter from an individual buyer.

It is important to realize that not all large home buying companies and agents are disreputable or are out to try to buy your house at a way below market value and take advantage of your current financial difficulties. They are, however, trying to get your home at the best possible price, just like any other buyer. As the seller and current owner, you need to do some research on the contents of the pre foreclosure letter as well as realistically look at what is being offered. Typically the pre foreclosure letter that seem to be offering you a fantastic deal really are too good to be true, however talking with the company and asking questions is still a good option.

A realistic pre foreclosure letter will indicate what individual or company is making the offer in a clear and direct fashion. Avoid letters that use statements such as ” I am a representative of an interested investor” or other vague statements. The writer should provide a phone number, not just an email address, where you can make contact. The letter should also clearly indicate if the interested person is an individual or a company.

The pre foreclosure letter should not indicate that you have to pay any type of fee or sign any contract to be able to talk to the writer or the company. These are almost always scams designed to take your application fee without ever planning on making a reasonable offer on the home. In addition be very wary of a pre foreclosure letter that indicates the company or writer will “buy your home no matter what the condition” as this typically means that they will only offer prices that are well below market value.

If you are considering buying a home through pre foreclosure leads obtained through a listing service or a real estate provider, it is important to develop an approach to speaking with the homeowner in a way that is both positive and supportive. It is absolutely critical to keep in mind that this is a deeply stressful time for the homeowner who is likely facing foreclosure, so developing a dialogue or an introduction to your interest in purchasing the property has to be done with diplomacy as well as honesty.

Many homeowners, especially those that feel they have been mislead by lenders in the past, are often very hostile and highly defensive and mistrustful of anyone approaching them saying  “this is the answer to your financial problem” type sales pitches. When you obtain pre foreclosure leads, keep in mind that some people will be able to get refinancing, some will work with their lenders and not all are going to be in dire financial situations. Approaching the homeowners from an interested and supportive stance is much more effective as they are less likely to group you in the category of untrustworthy or as being an opportunist to their misfortune.

Pre foreclosure leads can be contacted by several different methods. The cheapest and least intrusive to the homeowner is to send them a registered letter, letting the owner know that you are interested in purchasing their home. Using mass mail outs can also be effective, but keep in mind this can be viewed by the owner as another ploy by huge companies only offering discount prices for the home and property. By following up on only the pre foreclosure leads you are really interested in, and by using a personalized, registered letter, you may get more and better responses from homeowners.

Once the pre foreclosure leads have led to a response from the buyer, the next step is to set up an appointment and meet with the buyer, typically at the property. If the buyer is seriously considering a short sale on the property, he or she will be willing to allow you to look through the property at this point. You should then obtain the information needed to speak directly to the lender, should you consider making an offer.

Keep in mind that the owner may be unaware of current market values, so having some comparable sales information for foreclosed homes in the same area is very important. For owners this can be tough to understand if they value their homes at the original price, so you may want to provide this information to the owner before the meeting by mail to allow them to review this material privately and gain an understanding of the market.