#18 Educating the Homeowners

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Summary:

In this continuing series outlining the 10 options in the Fed Up packet, Dwan discusses bankruptcy, deed-in-lieu-of-foreclosure, and selling with a real estate agent. These three options really rely on your own industry knowledge and experiences to help the homeowner understand the processes because the bank will only tell them what the bank wants them to know. Dwan wants you to be educated so you can educate your homeowners and you can be successful.

Time Stamped Show Notes:

  • 6:18 – Before Dwan started The Most Dwanderful Real Estate Podcast Ever, she took a 30-lesson class on podcasting, and she has integrated a lot of the things she learned there into her podcast.
  • 7:29 – This podcast should be educational and fun, and if you typically only listen, you are missing out! Go to Dwanderful.com every week to watch the video version of the podcast.
  • 10:00 – Numbers 6, 7, and 8 of the Fed Up packet are: bankruptcy, deed-in-lieu-of-foreclosure, and sell with a real estate agent.
  • 11:21 – By being able to recognize the mindset of the homeowner, you can know when a homeowner is just DONE and doesn’t want to work with you.
  • 12:28 – The Fed Up packet is the best way to deal with homeowners in person. Use any story that is relatable – your mess becomes your message.
  • 13:45 – The sixth option in the Fed Up packet is bankruptcy. Dwan has a love/hate relationship with bankruptcy. 75% of people who file for bankruptcy do so within 72 hours of losing their home, so those who reach out to you in this timeframe don’t have time to pursue any of the other options in the packet. In this case, they have accepted that they are going to lose their home and you should tell them that you have seen other homeowners file a Chapter 13 bankruptcy and then explain the difference between a Chapter 13 and a Chapter 7. With a Chapter 13, the door is open for them to work with you, but that is not the case with a Chapter 7.
  • 19:22 – The seventh option in the Fed Up packet is deed-in-lieu-of-foreclosure. This is the worst option the homeowner could possibly choose. The only person who wins in this scenario is the bank. Deed-in-lieu means that the homeowner gives the deed to their home back to the bank instead of going through the foreclosure process. The bank insinuates that this provides the homeowner with a clean slate, but in fact the bank will still put a foreclosure on the homeowner’s credit report and they will hold the homeowner responsible for any loss in equity. This means that if the bank sells the house for less than the homeowners owed on the house, they will put a judgement on their Social Security Number or send them 1099 to indicate miscellaneous income, which could cause trouble with the IRS.
  • 25:09 – The best thing that you can do is be smart and informed for the benefit of homeowners you encounter. Their home is their biggest emotional asset, and it is the end of the world as they know it when they are on the brink of losing it.
  • 26:26 – The eighth option in the Fed Up packet is selling their house with a real estate agent. Typically, there is not enough time for them to do this before their foreclosure sale, so a better alternative to this is equity partnering, where the real estate investor takes on the initial costs and fees and the homeowner ends up earning a portion of the profit of the sale. Dwan will talk more about this in Season Two of the podcast, so stay tuned!
  • 29:12 – In summary, encourage any homeowners who are planning to file for bankruptcy to do a Chapter 13, tell them the truth about deed-in-lieu-of-foreclosure, and suggest equity partnering instead of selling with a realtor as long as they have equity in the house.
  • 30:33 – Next week, Dwan will discuss options 9 and 10 in the Fed Up packet. If you have not yet purchased the packet at the podcast promotional rate of $499, go to Dwanderful.com/fedup to do so right now.
  • 32:56 – Also, don’t forget that you can join Dwan’s membership club for just $1 and be able to join the LIVE Coaching Call on Wednesday mornings!

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