Homeowners want to keep their property at all costs. That we know. They will do anything file bankruptcy once, then again at an enormous loss of cash flow, refinance their property at tremendous loss of equity in things such as points, prepaid insurance, prepayment penalties at teaser rates. They will even sign over their home in an effort to act like they still own it and pay rent each month. It is amazing the lengths that homeowner will go before they see the light. Knowing this and having been through the trials and travails of the waffling homeowner, I thought it would be nice to show just how hard it is for a locator to get a release on a property. I was sure that it was now that the statistics would show that you have to be incredibly persistent to make a homeowner give you a release and that the homeowner's back had to be against the auction wall.
So we simply went through the statistics portion of the website to see what would happen. This article will go through the statistics of a portion of our visited exterior properties, contacts made, bankruptcies, refinance etc. to help the locator understand when reality sets in with the homeowner. Granted statistics mean nothing when you are walking up to the door and they absolutely can not feed you! But they can give you an idea of what it will take to get the job done to fill your pipeline.
Your pipeline is the amount of releases that you have going through the system at one time plus purchase and sales agreements. Remember the manual told you that the process requires four steps this is the first step of the four step process. The release.
These statistics do not mean that each release will turn into a deal, that is for another time and actually depends heavily on the data (admin duty) that is placed into your route, the property condition (locator duty) and the willingness of the homeowner to compromise.
First the data. We went through all of the visited exterior properties for Plymouth County and Philadelphia County on July 24, 2006. This only includes data that has not been second looked and is still in the routes as of July 24, 2006.
Plymouth had 174 visited exteriors. From that number the locators made contact with 80 homeowners. 9 had refinanced 18 had auctions scheduled, 4 had their house on the market.
Philadelphia had 156 properties visited 24 homeowner contacts, 6 homes on the market, 43 bankruptcies, 6 refinances, 6 vacancies and 10 with no sub-status.
What does that mean? In Massachusetts you have a 6.4% chance of getting a release if you go to the door and leave a letter and wait for a call back. If you have contact with the homeowner you have a 33% chance of getting a release.
Philadelphia has a 6.5% chance of getting a release by just going to the door and leaving a letter and waiting for the call back. If contact is made the percentage of times you will get the release goes up to 24%.
Next we used half of the controlled properties. Massachusetts has 27 controlled properties and Philadelphia has 10. Here are the statistics for 50% (19) of our current controlled properties picked randomly. We looked at two variables in the study: 1) How many visits does it take to get a release on the controlled properties in our system? 2) How many days was the property in the system before a release was obtained?
19 controlled properties in 54 total visits
6 on 1 visit
5 on 2 visits
5 on 3 visits
1 on 6 visits
1 on 7 visits
1 on 10 visits
Days in the system before the release is obtained
7 within 7 days or less
2 within 14 days or less
2 within 21 days or less
3 within 40 days or less
3 within 125 days or less
1 within 180 days or less
1 within 2 years or less
When is it that the homeowner begins to see reality and know that they should sell the property? Is it before they miss the first payment? After they receive the summons and complaint? Is it when the auction is finally scheduled? Based upon our statistics the best time to reach a homeowner is in the first forty days.
Fourteen of the nineteen releases occurred within forty days of the property being placed on our system. So What does that mean for the locator?
Base upon the current controlled properties a majority of the releases (16) are obtained in three visits or less within forty days! This should help you in your plan of attack on the properties. Based upon this statistic alone I would want to make sure that I as a locator can get to each property 3 times within forty days. Then space the remaining properties out for interval visits on a two week basis instead of a weekly drive by. If this statistic holds true in the future we should have many more releases in the future.
Suggested Plan Of Action
If I were running routes I would plan to see each new properties three times within the forty day period. The remainder of the properties I would schedule out at longer intervals.
good hunting
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