Naming the default in the first letter: invasive, or the only honest thing to send?

Question

Standing rule in most of the training I've read is that you never reference how you found the owner and you never put their foreclosure in the first line. Lead with help, let them raise it. The reasoning makes sense to me. The person is embarrassed, they've had a bad month, and a stranger's letter that opens with the worst fact about their life reads like surveillance.

But I've now met two operators who mail the opposite and say their numbers are better. Their piece says something close to "I understand a foreclosure sale may be scheduled on your home. There are usually more options than people think, including selling with your equity intact. Here is what I can do and how fast." Their argument is that the generic "I buy houses, any condition" postcard is indistinguishable from the forty other postcards in that mailbox, and that a homeowner with eleven weeks left doesn't have time to figure out which stranger is talking about their actual problem. They say response rate drops and conversion per response goes way up, because everyone who calls already knows the subject.

The other side says the explicit letter gets you the angriest reactions, the complaints, and the reputation in a small county that you're the vulture who mails people at the courthouse.

Whatever you pick, several states regulate what a solicitation to an owner in default can say, including required disclosures, so this is a question to run past a lawyer in that state before the mail goes out.

I don't have volume yet to test it myself. Where do you land, and does your answer change between mail and a door knock?

omar_haddad · Answer

Mail and door are completely different questions. On paper you have no ability to read the person, so the generic piece is the safer bet. At the door you already know within four seconds whether this is someone who wants to talk about it. I've stood on a porch and had a man say "you're here about the letter from the trustee, aren't you" before I said anything past hello. Pretending otherwise at that point makes you look shifty.

kevin_lombard · Answer

I've gone through the thread and I still want to check something basic. If the notice is a public record, doesn't the owner already know that anyone can see it? Or is it more that most people have never thought about it until a letter makes them?

luis_carrera · Answer

juniper, the second one. People know the courthouse is public in the abstract and have never pictured a stranger with a spreadsheet.

compass, the thing that bothers me about the two operators you met is the sample. Better conversion per response on a smaller response pool can still be worse deals per thousand mailed, and nobody reports that number because it's the one that takes six months to know. I'd want their deals per thousand pieces before I copied the copy.

Rena Guide · Answer

A notice of default is the document a lender or trustee records with the county when a borrower has missed enough payments for foreclosure to begin. It's a public record, which is how investors build lists from it. Most owners know the courthouse is public without ever having imagined someone reading their name off a daily feed.

The reason the common guidance says don't lead with the filing has to do with how the message lands. Someone in default is often ashamed and has already been getting mail from strangers. A first line that names their default can read as being watched even when the sender means well, and it makes them defend themselves before they've decided whether to talk to you at all.

That is a reason to be careful with the opening. It isn't a rule that the subject must be hidden. Once an owner is talking with you, being vague about why you called wastes time they don't have before a sale date. Say what you can do, be plain about the numbers, and answer directly if they ask how you found them.

One practical point before any of this. Several states regulate what a solicitation to a homeowner in default may contain, sometimes down to required disclosures and type size, and some also require a particular form of purchase contract. Have a lawyer licensed in that state read your mail piece and your contract before you send either.

devon_pierce · Answer

I've got a list and no deals, so take the data for what it is. I split 400 pieces last quarter, half generic, half naming the situation in careful language. Generic got 14 calls, explicit got 6. Of the 14, nine were people who wanted to sell something unrelated or were just curious. Of the 6, five were the actual owner talking about the actual house. One of the explicit six also left a voicemail telling me what she thought of me, and she meant it.

Too small to prove anything and I know it. But the calls felt like different species.

jordan_ellis2 · Answer

bramble's one angry voicemail is the whole risk in a rural county. Fourteen calls and one enemy is fine in a metro. Where I'm working there are maybe 40 filings a quarter and the woman who's furious with you knows the realtor, the closing attorney and the guy who'd have sold you the roof.

Naming the default in the first letter: invasive, or the only honest thing to send?

6 replies