Many homes that have been foreclosed upon will have no electricity (sometimes no water either, for that matter). But, in most cases, you need it to do your foreclosure cleaning work properly. So, what do you do? How can you get the job done when the home has no power?

In the perfect scenario, the REO realtor who’s responsible for the property will get the power turned on for you. That way, you and your foreclosure cleanup crew can come in and knock the job out with no problem. However, it doesn’t always happen this way. Sometimes, the realtor is too busy; especially these days when they are handling so many properties. Or, they may not know what the procedures are for doing this and just don’t want to be bothered with it.

Options Open to Foreclosure Cleaning Companies When a Property Has No Power

You can handle this situation in a couple of ways if you want to keep the job. You can either: (i) turn down the job, which means losing a possible long-term client; or (ii) you can find a suitable workaround. Oftentimes, this means working with cold water instead of hot. And, if you know anything about cleaning, you know how much more difficult it is to clean with cold water instead of hot.

Foreclosure Cleanup: One Piece of Equipment You Need to Handle Homes with No Power

If you choose to take on the job (which is just smart business by the way), you can purchase a small, gas-powered generator. This will give you the hot water you need, and allow you to take on foreclosure cleanup jobs – even when a property has no power.

The generator pictured here is something like (exactly) what you’ll need. It’s sold at most major home improvement stores, and in all-purpose outlets like Wal-Mart. It’s light weight, hence easily portable; gives you enough power to do most jobs; and is pretty easy to use. If you’re not mechanically inclined, this is good to know.

And the cost – around $200. Not bad for a piece of equipment for your foreclosure cleaning business that will allow you to take on more work, right?

As your foreclosure  clean up business grows, you may want to invest in a more powerful generator. These can cost right at $1,000, which is still not bad, when you consider what it allows your business to do.  

Foreclosure Cleaning: When Renting Equipment Is a Good Option

If you don’t have the money to buy a generator right now, you can rent them at major home improvement outlets like Home Depot.

Many foreclosure cleaning business owners, don’t know this, but Home Depot (and Lowes, et al) rent all types of equipment – from generators to power tools to ladders – and a whole lot more. And, they rent by the hour, the day, the week and the month. Super convenient for every size business.

Following are some approximate generator rental costs. Note: The prices are based on the power capability of the generator.

–3000 Watts $39 for 4 hours / $56 per day

–6500 Watts, $49 for 4 hours / $70 per day

Renting equipment like generators is a great way to grow your company because you can take on more work without having a lot of upfront capital. In fact, don’t purchase equipment until you know you can truly afford it.

Learn more about when to buy versus when to rent equipment for your foreclosure cleaning business.

Note: There are going to be some foreclosure cleaning jobs that you’ll have to pass on – either because the home doesn’t have power, or some other factor. It’s okay to do this if you really aren’t equipped to handle it.

It’s best to let a foreclosure cleanup job go than take it on and not do a good job. You can ruin your business’ reputation before you even get started. Remember, you’re in it for the long haul. Grow – and take on – what you can really handle and do a good job it.  

Continued success with your foreclosure cleanup business!

P.S.: Learn how to get contracts from your local housing authority! Stimulus Money Hitting Housing Authorities Across the U.S. Means Contracting Opportunities for Real Estate Services Businesses (eg, Foreclosure Cleanup Companies, Electricians, Plumbers, etc).

P.P.S.: Like this post? Follow Foreclosure Business News on Twitter.

Copyright © 2010 Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author.

According to an article in the The Spokesman-Review, a Washington-area newspaper, three weeks before the Winter Olympics started in Vancouver, lenders of an area ski resort foreclosed on the property. As the journalist notes:

If you are going to schedule a foreclosure sale, you might as well do it when the world is coming to your door.

Reading between the lines, it’s impossible not to wonder if they lender would have gone this route had the Olympics not been in town.

Foreclosure for the Big Guys; A Boon to Area Residents (the Little Guys)

In an ironic twist of fate, it seems that at least this once, the little guys are making out like bandits. According to the article, homeonwers inthe are are renting their properites for up to $2,500 per night. And, get this — it’s tax free income for U.S. residents who may have purchased and are now renting out their homes. How/why? It’s explained this way:

According to the IRS, owners can pocket any fair-market rent as long as the term is 15 days or fewer and they don’t claim any of the tax deductions typically allowed on rental property, such as for depreciation or maintenance.

Sweet!

Read the entire article, Whistler foreclosure fails to curtail Olympic rental rates.

P.S.: Read how one foreclosure cleaning business owner makes up to $40,000/wk.

P.P.S.: Like this post? Follow Foreclosure Business News on Twitter.

Copyright © 2010 Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author.

Landlords are a great source of business for real estate and foreclosure cleanup business owners. Why? Because tenants are always moving in and moving out, which means they need the types of services foreclosure cleaning businesses provide (eg, removing left behind furniture and other items; making minor repairs, repainting, changing locks, etc.).

According to the National Multi Housing Council, a national association representing the interest of apartment firms, the index measuring vacancies and rent levels rose in the fourth quarter of 2009. But vacancy rates in apartments recently hit 8%, the highest it’s been in 30 years. So what gives?

Any Rental Activity is Good Activity for Foreclosure Cleaning Businesses

The bottom line is, no matter what the state of the rental market is, activity in this market means income for real estate services and foreclosure cleaning businesses.

The Difference between Real Estate Cleanup and Foreclosure Cleanup

Right here we want to take the time to point out that there is absolutely no practical difference between a real estate services company and a foreclosure cleaning company. The only difference is in how you market the business.

Knowing this is extremely important because when the foreclosure crisis no longer tops the news, just know that you will still have a very viable, lucrative small business – if you market it right. Remember, as long as real estate is bought, sold and rented, there will be a need for it to be cleared out, cleaned up, repaired and maintained. In short, all of the services that your foreclosure cleaning company provides.

Now that you know why it’s a good idea to target landlords, let’s examine the services your foreclosure cleaning firm can offer them.

Foreclosure Clean Up Business Owners: Services You Should Offer Landlords

Following are the most needed services your company can offer to landlords. If you’re just starting out, you can build on these as you grow.

Cleaning: Cleaning after tenants move in and move out, eg, cleaning bathrooms, kitchen and all major appliances; floor care (replacing vinyl tiles, cleaning/repairing wood floors, shampoo and vacuuming carpet, etc.).

Trashout and/or debris removal and hauling: Disposing of any furniture, clothing and other items left behind.

Locksmithing: Changing locks on all doors after old tenant moves out.

Minor Repairs: Eg, repairing broken windows, cabinets and doors.

Lawn Maintenance: Cutting grass, trimming shrubs and overgrown trees, etc.

Foreclosure Cleaning Business Owners: How to Locate Landlords in Your Area

Using the internet, it’s relatively easy to find landlords – no matter where you are. Because most real estate transactions are public records, all it takes is a little digging. Following are a few ways to locate landlords in your area.

Landlord Forums and Chatrooms

There are tons of landlord forums and chatrooms online that cater to this niche. This is because most landlords are small real estate investors, eg, they may own three, four or five properties. To find them, go to your favorite search engine, eg, Google/Yahoo! and type in phrases like “your city, landlords”, eg:

Phoenix, AZ landlords

Phoenix, AZ real estate investors

Phoenix, AZ landlord groups

Phoenix, AZ real estate investment meetings

Phoenix, AZ real estate investment groups

Once the listings start popping up, start doing some reading. Many of these boards are very active. Did through them and find your geographic area. Once there, network by answering questions when you can, always being sure to leave the name and contact information of your foreclosure cleaning company.

Note: Most of these forums and chat rooms won’t allow you to blatantly advertise on the site. So you won’t be able to just pop in and leave an advertisement and move on. That’s why you should answer any questions you can (or ask some). This allows you to put your contact information there legitimately.

Many forums and chatrooms will ban you if you just blatantly use the space to advertise, so don’t do it. It’s an excellent source to get business for your foreclosure cleanup company; don’t ruin it by running afoul of site guidelines.

How to Find and Market to Property Management Companies

Landlords who have many properties usually contract with property management companies to handle their properties. Property management companies do everything from running credit on prospective tenants to property repairs and maintenance to collecting rent to handling evictions to exterior care and security.

Think handle every possible facet of rental properties, which make them an excellent prospect to market to if you’re a foreclosure cleaning business. Why? Because the subcontract a lot of the work out. So contact those in your area to offer your foreclosure and real estate cleaning services.

Find them the same method outlined above for finding landlords. In fact, in your search for landlords, you’re probably going to run across some property management/property preservation companies – and vice versa.

Foreclosure Cleanup & Evictions: How to Partner with Landlords in This Scenario

Landlords need the services of foreclosure cleanup/real estate cleanup, particularly when it comes to evictions because items left behind have to be hauled away, repairs need to be made, etc. You can position your foreclosure cleanup company to work with landlords in the case of evictions in a couple of ways:

1) The Sheriff’s Office: you can choose to work with the sheriff’s office to remove items from a home after a landlord has gone through a formal eviction process; or,

2) Post Eviction Cleanup: you can decide to instead focus on post-eviction cleanup, which means you will work with the landlord in getting the property in rental shape after the legalities of the eviction are completely over.

Why You Should Proceed with Caution When Working Eviction Situations

Whether you decide to work evictions through the Sheriff’s office, or through a landlord, be sure that the eviction process is over and that the landlord has a legal right to remove stuff from the premises. Why? Because you could find yourself part of a lawsuit if you’re not careful.

Sure, the landlord owns the property, but tenants have rights and if they are violated, not only can the tenant sue the landlord they can sue you and/or your company too if you “assisted” the landlord in any way in violating their rights – even if you were an innocent participant in the process.

If you’re not sure about an eviction situation, or your gut is just telling you that something’s not right, ask the landlord for proof of the eviction. In fact, this should be your company policy in these situations to protect the viability of your, your employees and your company.

The Landlord’s “Tenant” May Be Your Next Foreclosure Cleanup Client

Ironically, your business’ foreclosure cleanup arm may very well find its next client in the landlord’s apartment or rental home. Why? Because the tenants are moving, right?

They have to go somewhere and they have to have their belongings moved. Who better than you?

According to a recent article in the Wall Street Journal, many owners of apartment complexes are actively marketing to previous homeowners who lost their home to foreclosure, or were affected by foreclosure in some way. For example, the article cited Camden Property Trust, a leasing company that owns 62,903 rental units in the Las Vegas area, as buying mailing lists and marketing to owners who are about to lose their home in foreclosure.

This is proving to be a successful marketing tactic for many landlords and property management companies. Hence, don’t be surprised if you’re hired for cleanup jobs from the landlord’s new tenant.

Some of these tenants ultimately avoid foreclosure by getting paid incentives from their mortgage companies to move out early and leave the home in good shape. What does this mean for you? That they the “moving cash” they need to pay companies like yours.  

Working with Landlords Can Be Evergreen!

Establishing a relationship with even a few landlords can keep your foreclosure cleaning company very busy. Mainly because if they like and trust your work, they’ll call on you over and over again. They’ll also recommend you to others. Finally, you can market directly to the tenants yourself.

As one Atlanta real estate investor (and landlord) said, “Reliability in this industry is key. Once you find any type of contractor in the real estate services industry you can count on, trust me, you keep their number handy because so many of them are unreliable.”

So, make that your marketing slogan, eg, “We show up on time, every time. You never have to worry!” And do it. Your phone will be ringing off the hook.

The bottom line is that landlords – whether they own just a few properties, or are large ones who have their properties handled by property management and preservation companies – can be a lucrative source of evergreen business for your foreclosure cleaning company. So, make yourself known to them.

P.S.: Read how one foreclosure cleaning business owner makes up to $40,000/wk.

P.P.S.: Like this post? Follow Foreclosure Business News on Twitter.

Copyright © 2010 Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author.

The following foreclosure cleanup bid was for a real client. We covered exactly what the client wanted in Part I of this article on how to bid on foreclosure cleaning jobs. Here, we’ll go through actual pricing and provide notes on why/how we did certain things. Ready? Ok, let’s get to it.

Total Foreclosure Cleanup Job Bid: $6,120

Note: There were certain parts of the job that we did not bid on, ie, installing the carpet throughout the home and repairing the ceiling leak in the garage. Although the realtor told us she wanted this initially, she contracted with another company to handle these parts of the job.

Bid Specifics

Interior Cleaning: The home was approximately 4,000 square feet (3,966 sq. ft to be exact. This portion of the job included cleaning all rooms. In the kitchen the realtor requested specifically that all sinks, countertops, cabinets and appliances be thoroughly cleaned (eg, refrigerator, oven, venting hood, dishwasher, etc.).

Also, the client requested that all ceiling fans, mirrors and windows (upstairs and downstairs, inside and out).

In the garage and basement, the client only wanted a “broom swept” clean.

Rekeying Locks: Remember, there were four (the front door, back door and two basement doors).

Repairing/Replacing Garage Remotes:  This included installing new garage remote controls for two doors near the back, and repairing and/or replacing (whichever was more cost conscious) non-functioning garage door remote control that the realtor had.

Screen Door Repair: Fix broken screen door to the rear entry off kitchen.

Trashout and Debris Removal: This included removing trash and debris from the front and back yard. Some of the items were furniture, exercise equipment, clothing and other miscellaneous items left by previous tenants.

Note: Some items the owners wanted left behind included lawn equipment and other “clearly marked” items in the basement. The realtor agreed to clearly mark the items that were not to be removed with yellow Post-It notes.

Light Bulb Removal & Replacement: All broken light bulbs  were to be removed and clients requested that all light fixtures have working bulbs.

Tub Caulking: As necessary.

Job Total for the Above: $2,865

This is how we arrived at this foreclosure cleaning job figure:

Trashout, debris removal and dumping: $1,050

Household Cleaning: $675

Electrical and General Handyman Duties: $525

Window Cleaning (Inside and Out): $300 Note: This was a tri-level home with tall windows, hence extra equipment had to be rented to adequately complete the job.

Appliance Surcharge Cleaning: $225 Why the surcharge? The fridge was full of old, rotten food left behind. Industrial strength cleaners and bags were necessary, in addition to possible pest control spray.

Equipment Rental, Pickup and Delivery: $90

Important Note about Pricing Foreclosure Cleaning Jobs

The company profit was included in the rates above. As a matter of course, we do not give specific bid breakdowns to the realtor because sometimes clients will use this to price shop.

We DID provide the realtor with a “breakout quote” for the painting (see below). Why? Just in case she wanted to opt out of hiring our company for painting. We did this because the realtor had requested “touch up” painting.

We pointed out to her that it would be more time consuming, hence more expensive, to do touchup painting instead of entirely repainting because the paint on the walls was old and dirty. Hence, any “touch up” painting we did would clearly stand out and not look professional.

Foreclosure Cleanup Bid for Painting Portion of this Job

In spite of our advice above, we bid on this as a “touch-up” paint job, just like the realtor requested. This included painting the entire interior of the home, including water stains on ceiling in living room area off kitchen.

This estimate also included touch-up painting of square footage not included in main finished area, specifically the “hallway areas” leading to basement and/or garage.

This estimate does not include painting of the basement and garage.

Total square footage of area to be painted was $2,644 sq. ft. We charged $1.25 per square foot, which brought the total to . . .   

TOTAL FOR PAINTING: $3,305

Once we deducted the $50 discount for the Multiple Listing Service (we give this to realtors who belong to the FMLS because we advertise there and that’s how she found us), the total estimate for this foreclosure cleaning job came to . . . .

GRAND TOTAL: $6,170

Additional Notes We Added to This Foreclosure Cleanup Bid

–Payment immediately upon completion.

–Property owner or the realtor will provide and/or contractor for all supplies, eg, paint, locks, screens, light bulbs, garage door wall panel(s) and opener(s). As per realtor request, the quote provided is for labor only. The contractor (us) will provide all necessary cleaning and debris removal supplies/equipment.

Expiration of Estimate: This Estimate/Bid is good for 7 (Seven) days from date shown on bid.

If all is agreeable and you customer wishes to proceed, please sign and return per instructions outlined on n next page.

Pricing & Bidding

Several in-house profit margin percentages and were used to construct this bid. And, this is different for every company. Some that we used here include job distance, tri-level home, equipment needed, type of debris to be removed (there were several very heavy items), job turarnound time, etc.

About Giving Estimates for Painting

Note they want “touch-up” painting. This practically doesn’t exist. Usually, it’s easier to repaint than “touch up” paint.

One good thing about touch up painting though (if that is what you’re eventually hired to do) is that you usually don’t have to worry about areas window sills, baseboards, closet interiors, etc. Clearly state in your painting estimates what will and will not be covered though. That way, there are no surprises on either end when the job is done. To find a home’s square footage, search a county’s “property search” website and used this info to get a pretty accurate estimate.

As you can see, a lot goes into giving a foreclosure cleanup bid. If it seems overwhelming, don’t let it be. The more you give the better you will get at it.

P.P.S.: Like this post? Follow Foreclosure Business News on Twitter.

Copyright © 2010 Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author.

The following information is from an actual foreclosure cleaning job bid. Note: Particulars for your company may change based on geographic location, cost of materials and several other factors. This information is dispensed in two parts. The first part covers the details the client sent to the foreclosure cleaning company about what they wanted done.

The second part covers the actual bid the foreclosure cleaning company owner sent back to the realtor.

Foreclosure Cleanup Job Bid: What the Prospective Client Requested

The home in question was getting ready to be re-rented by the owners. The previous renters had skipped out, leaving a lot of stuff behind. They hired a realtor to oversee getting the home ready to be re-occupied.

1. Rekeying four doors

2. Installing new garage remote controls

3. Fixing busted screen door at rear of home

4. Removing trash and debris from front and back yard

5. Mow grass and trim hedges

6. Trash out interior of home, including the basement; removing everything except lawn equipment left behind by previous renters)

7. Replace all nonworking light bulbs throughout home (FYI, this house was about 4,000 sq feet)

8. Dust all light fixtures and ceiling fans

9. Clean kitchen, including all appliances

10. Clean bathrooms and caulk tubs

11. Do touchup painting, including ceiling (which had water stains)

12. Install brand new vinyl tiles in two upstairs bathrooms

13. Install carpet throughout the remainder of the house (except for basement)

14. Repair water damaged ceiling in garage

Extras: Realtor requested that if we spotted anything else that needed done to add them to our bid estimate.

The reason this is such a good example of a foreclosure cleaning job bid is because there are lots of services requested.

The Difference between a “Foreclosure Cleanup” Job and a “Real Estate Cleanup” Job

Technically, this is not a foreclosure cleaning job because the property was not foreclosed on. Hence, it’s a real estate cleaning job. But, they require the exact same services your foreclosure clean up company provides.

The only difference between real estate cleanup and foreclosure cleanup is in how you pitch the services of your company. Right now, foreclosure cleanup is a hot business opportunity, so it makes sense to market your company in this manner.

However, when home foreclosure no longer tops the news, it doesn’t mean that there won’t be any business. There will be. Foreclosure cleaning is an evergreen business because as long as real estate is bought, sold and rented, it will need to be cleared out, cleaned up, repaired and maintained. Always remember this.

P.P.S.: Like this post? Follow Foreclosure Business News on Twitter.

Copyright © 2010 Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author.

In a foreclosure cleanup business, you can offer a variety of services. This is a good thing for two reasons: (i) because it allows you to have multiple streams of income; and (ii) you can offer as many or as few services as you want.

Foreclosure Cleaning: The Services Offered Often Dictate the Equipment Needed

For example, you can offer trashouts and exterior property services, eg, lawn maintenance, gutter cleaning, pressure washing, etc. Or, you may focus on the interior, eg, white glove cleaning, interior repairs, carpet and floor cleaning, etc. The bottom line is, how you structure your foreclosure cleaning services is up to you.

However, for the most part, the services your foreclosure cleanup business will offer will be determined by the equipment needed to complete the job at hand. Hence, knowing how much equipment costs are – whether it’s renting or buying – is crucial.

Should You Wait to Purchase Equipment for Your Foreclosure Cleaning Business?

The simple answer is, yes, especially if you are completely new to the industry and don’t have a lot of startup capital. And, the equipment you do decide to buy doesn’t have to be brand new.

On places like Craigslist.com and Backpage.com, you can pick up a lot of used equipment for your foreclosure cleaning business, especially as some many people are losing their homes these days and are downsizing.

But if you have absolutely no money to start with, only offer those services for which you have the equipment right in your garage or in your cleaning cabinets.

Everyone has cleaning supplies . . . because they have to clean their own homes. And, if you live in the suburbs, you probably have a lawn mower. So right there you have everything you need to offer simple lawn maintenance and a good, simple cleaning. And, this is all most banks/lenders want when they hire a home to be trashed out/cleaned.

When Renting Equipment for Your Foreclosure Cleaning Business is a Good Idea

Following are some guidelines to keep in mind when it comes to accepting jobs for which you don’t have the money to outright buy the equipment, in which case you’ll rent it. If you get a job that:

(i) you know you can do;

(ii) that you will make a good money off of;

(iii) that can easily cover the cost of renting the equipment;

(iv) where it would “hurt” you not to take the job (eg, the client is unlikely to call on you again if they feel that you can’t handle most of their job requests); and

(v) that you will be paid for relatively quickly;

THEN, you should take the job and rent the equipment.

For example, let’s say a bank wants to hire you to remove trash and debris, mow the lawn and pressure wash the property.

You can handle the trashout and mowing the lawn with no problem. But, you don’t have a pressure washer. Well, large home improvement stores like Home Depot rent this type of equipment relatively cheaply by the hour, day, week, etc.

You can rent a pressure washer in most cases for under $50 a day. If you’re charging the client $$200 to $300, it’s worth it for you to take this job and shell out the cash up front to rent the pressure washer.  

Your profit easily exceeds your cash outlay, so you should be good – even if the client takes 30 days or more to pay.

Just be sure you don’t make a habit of stretching yourself too thin financially. This was a relatively inexpensive equipment rental fee. Not all pan out like this and you can find yourself in dire financial straits if you’re not careful. If you keep the guidelines outlined here in mind, you should be fine.

Warning: The “Emotions” of Spending On New Tools and Equipment

As a long-time business owner, you’re just going to have to trust me on the following:

When you first open your foreclosure cleaning business, it’s tempting to spend, spend, spend initially on all the things you “need” to get your business up and going.  The word need is in quotation marks because rarely do you need everything that you think you do.

But a business is like a new baby. You want it to have the best, so you go out and get all the bells and whistles you think it’s going to need. Before you know it, you’re in a spending frenzy. And, you will even justify it to yourself, even when you feel in the pit of your stomach that you’ve gone over board.  

It’s easy to understand, after all, you’re “starting a business gosh darnit!”

Rein yourself in though and rent equipment, especially big -ticket items, before buying. As mentioned above, large home improvement stores like Home Depot rent everything from tools to heavy equipment to generators to actual trucks.

With options like this, your foreclosure cleaning business may never need to actually buy equipment.

Foreclosure Cleanup Business Owners: Why Waiting to Purchase Equipment Is Smart

Waiting to purchase equipment is a good idea for two reasons:

(i) it will truly allow you to grow only as fast as your new business’ finances can afford; and

(ii) it will give you a chance to see which services are really taking off in your geographic area before you invest precious capital in equipment you may not use that much.

Beware of Overspending!

Golden Tip: Careful not to enter the store and spend anticipated profits on items you know you already have at home/your office, but you simply don’t want to go back to get, eg, gloves, rope, tarp, putty knives, etc.

On more than one occasion, one foreclosure cleaning business owner reports, she’s spent $50 on what should have been a $25 (at most)  trip on miscellaneous supplies like this. And, all because she failed to properly plan and pack for the job at hand.

Foreclosure Cleaning Sample Tool & Equipment Rental Rates

Get an idea of what equipment rental rates for your foreclosure cleanup business may run. This list (which may take a moment to load) is from a home depot-type store in Atlanta. These rates may vary according to geography. Some of the tools and equipment this list can be rented by the hour, by day, week or month.  

Getting an idea of what to expect when you rent equipment for your foreclosure cleaning business will give you a leg up in pricing jobs. Following are some common equipment rental costs:  

–Pressure Washer: Rent $46 (four hours)

–Fiberglass Extension Ladder, 28′: Rent $25 (four hours)

–Tow N Go Trailer, 5×8: Rent $24 (full day)

Want to know how much it costs to rent equipment for your foreclosure cleanup business? Pop into a Home Depot in your area and go to their rental department and get a price sheet.

P.P.S.: Like this post? Follow Foreclosure Business News on Twitter.

Copyright © 2010 Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author.

According to the MSN.com article, New wave of foreclosures coming, the government’s efforts to help citizens obtain a piece of the American dream – home ownership — may in fact be doing the opposite (pushing more into foreclosure). How?

Via the Federal Housing Administration (FHA), the government has given home loans to buyers that traditional banks wouldn’t touch with a ten foot pole. With tightening credit markets and the foreclosure crisis still raging, many banks have abandoned zero percent down loans, and/or giving home loans to those with less than perfect credit.

But, the FHA hasn’t. They back loans to those with less than stellar credit, and require less of a down payment (eg, 3.5%). Traditional lenders in today’s market, by comparison, may require a 20% down payment.

And, critics argue, actions like this by the FHA is what has been artificially propped up the housing market for the last year or so.

Now, the fallout is already starting. Proof?

About 9% of FHA borrowers have missed at least three payments (up from 6.5% a year ago), and experts say that means a new wave of home foreclosures is coming.

By using lower home loan qualification standards, the types of buyers being put into homes back by the FHA are much more likely to default. And, if this sounds familiar, you’re probably right.

This kind of lending* by the FHA (similar to subprime mortgage) is what got us into this mess in the first place. But apparently we didn’t learn our lesson (or at least the government didn’t). According to the Washington Post article, Rising FHA default rate foreshadows a crush of foreclosures:

The problems are rooted in FHA mortgages made in 2007 and 2008. Those loans are now maturing into their worst years because failures most often occur two to three years after a mortgage is made.

So we’re just at the beginning of the home foreclosures to come, if this holds true (and data suggests that it does).

Finally though, the message may be sinking in as the FHA has tightened its lending guidelines, pushing the down payment requirement up to 10% from 3.5, and limiting the amount that sellers can kick in. As one journalist noted, it means those wanting to purchase a home now have to put “some skin in the game.” This makes it harder to walk away when things get tough.

And, this makes perfect sense. After all, if you didn’t come to the table with any money (or very little), you’re much more likely to walk away. But, if you had to save $15,000 for a 10% down payment — and it took you three or four years to do so — and you have to come up with another $2,000 or so for closing costs, then you’re much less likely to let your home go into foreclosure.

The memories of the overtime you worked, the second job you took on and the time you sacrificed away from family and friends will give you the kick in the pants you need to do “whatever it takes” to prevent foreclosure.

While it looks like we are stuck in this home foreclosure crisis for a few more years to come it looks like we, the American public, are finally learning our lessons — and so is our government. One day, hopefully, the home foreclosure crisis will be a history lesson future generations can learn from. But for now, we struggle on through it.

*Note: The FHA is not a lender, but it insures lenders when mortgages go sour.

Get full details on why more home foreclosures are on the way.

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Copyright © 2010 Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author.

Industry experts pinpoint the start of the home foreclosure crisis to the fall of December 2007. Now we’re two and a half years into it, and it still rages on. However, many homeowners who want to prevent foreclosure are like a deer caught in headlights – they’re perpetually frozen; not taking any action. And, this is about the worst thing that can happen.

Today we’re going to discuss why selling your home may be your best option. While it may be your least favorite option to prevent foreclosure, it could be the only thing to get you out of the financial mess you’re in and allow you to start anew.

Preventing Foreclosure by Selling: How Much Can You Sell For

Many homeowners are underwater in their homes nowadays. What does this mean?

What does “Being Underwater” Mean When it Comes to Home Foreclosure?

Being underwater means a homeowner owes more on their mortgage than their home is worth on the open market. To use a very simple example, if you owe $100,000 on your home, but it is appraised at $75,000, then you are “underwater” by $25,000.

If You’re Underwater, You’re Not Alone: Almost 25% of U.S. Homeowners Are

If this describes you and you’re trying to prevent foreclosure, you’re not alone. A November 24, 2009 article in the Wall Street Journal said that approximately one quarter of U.S. homeowners are underwater. The article, One in Four Borrowers Is Underwater, states:

The proportion of U.S. homeowners who owe more on their mortgages than the properties are worth has swelled to about 23%, threatening prospects for a sustained housing recovery. . . . Nearly 10.7 million households had negative equity in their homes in the third quarter [2009], . . . Home prices have fallen so far that 5.3 million U.S. households are tied to mortgages that are at least 20% higher than their home’s value . . .

To Prevent Foreclosure, Find Out What Your Home Is Worth

If you’re not sure if you’re underwater, one of the best ways to find out is to have an appraisal done. This will cost a few hundred dollars ($250-$500). You may be not be as bad off as you think. If you are underwater, one option to consider is a short sale to prevent foreclosure.

What Is a Short Sale and How It Can Help You Prevent Foreclosure

A short sale is when the lender (mortgage holder) agrees to accept a lower amount than what is owed on the home loan. Many lenders are agreeable to this option these days because they know the state of the market. They’d rather this than have you walk away from your mortgage altogether (voluntary foreclosure).

Be aware that each lender’s short sale process is different and if you do decide to go this route that you do a short sale with “no recourse.” This simply means that the lender agrees not to come after you for any outstanding balance on the loan. Learn more about short sales and the consequences of doing one to help you avoid foreclosure.

Just know that the the main benefit of doing a short sale is that you do prevent foreclosure, and get to get on with your life.

Preventing Foreclosure: Why Selling May Be Your Best Option Even If You Have Equity

Let’s say you’re one of the homeowners these days who’s lucky enough to have equity in their home. Selling may still be the best option to prevent foreclosure. Here’s why.

If you’ve lost a job, run out of savings and are falling more and more behind, then selling might be a way out. The reason is, it’s taking many job hunters longer to find jobs. And, the older you are the worse it gets.

According to Orlando Huaman, a job counselor:

The job hunt typically lasts from 8 to 23 weeks, depending on where you are and the economy, and how high you are aiming. Don’t count on the “8 weeks”, but mentally prepared for the 23.

That’s almost six months, and some experts say it can be even longer than that, which is why financial experts like Suze Orman say you should have at least 8 months of expenses saved in your emergency fund.

If you’re a senior citizen, things are much more dire. According to The New York Times article, 65 and Up and Looking for Work:

. . . unemployed older workers stay out of work longer — 36.5 weeks on average, 40 percent longer than for the unemployed in general.

Unless you have significant savings and/or other monies you can tap, the quicker you decide to sell, the easier you can rebound if you’re trying to prevent foreclosure. Why?

Because you can not only prevent foreclosure, but also get some extra cash to pay off outstanding debt, handle moving expenses, establish an emergency fund to tide you over until you land that next job, etc. If you do this early enough you may even be able to preserve your credit, which means you can buy another more affordable home . . . if not now, then soon after you get back on your feet financially.

The point is, you can prevent foreclosure. But you have to assess your situation early; accept the cold, hard realities of it, and then make the tough decisions. The sooner you do, the sooner you can put it behind you and get on with the next phase of your life.

Get info on 32 ways to stop foreclosure: Discover what banks won’t tell you & investors don’t want you to know.

P.P.S.: Like this post? Follow Foreclosure Business News on Twitter.

Copyright © 2010 Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author

New Rule Affects Homeowners in Obama Administration’s “Prevent Foreclosure” Program

Now, if you want a home loan modification, you’re going to have to provide documentation to prove your financial status. This is a change in the Obama administration’s foreclosure prevention program, Making Homes Affordable. According to a press release on MakingHomesAffordable.gov, the reason for the change is explained in the following manner:

“With more than 850,000 homeowners in trial and permanent modifications, we are providing immediate relief to struggling homeowners,” said Phyllis Caldwell, Chief of Treasury’s Homeownership Preservation Office. “Today’s guidance represents our commitment to more efficiently move qualified homeowners into permanent modifications.” . . . This guidance refines the documentation requirements in order to expedite conversions of current trial modifications to permanent ones. (emphasis added)

Bottleneck in Pushing through More Home Loan Modifications

There has been a bottleneck in the process, preventing more homeowners from receiving home loan modifications. And, the fingerpointing goes both ways.

Homeowners say that banks and other lenders required unreasonable documentation, and lost documents even when they were sent in. Some homeowners report having to send in documents on three or four occasions, still with no results.

Lenders have complained that homeowners who want a home loan modification failed to provide proper documentation. Not only that, they’ve failed to do so within the proper timeframe.

Government Grants Home Loan Modifications . . . If the Fingerpointing Can Be Stopped

According to the article, this should alleviate the fingerpointing. The article states:

The new procedure, to be adopted by loan servicers by June 1, would provide troubled borrowers with what the Treasury Department said would be a “simple, standard package of documents” to complete so that servicers could calculate whether they would qualify for a loan modification.

Only time will tell how it all shakes out. Read the entire article on how this change in the Obama administration’s prevent foreclosure program may affect you.

P.S.: Read how one foreclosure cleaning business owner makes up to $40,000/wk.

P.P.S.: Like this post? Follow Foreclosure Business News on Twitter.

Copyright © 2010 Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author

If you own a foreclosure cleaning business, one of the easiest, free ways to land more jobs is to create a caller intake form (ie, call log) to use as an everyday part of your marketing efforts. We’ll explain how in a moment.

This is a very easy form you can create yourself using MS Word, or any other word processing software. Once you create it, give it to the person answering your phone and instruct them how to use it – and ensure that they do for every call.

Why Use a Caller Intake Form In Your Foreclosure Cleanup Business

This simple little form can tell you a lot about your business. For example, you can find out how many calls you are getting each day, the types of jobs prospects are calling about, how many estimates you are asked to give, which geographic location the calls are coming from, how many prospects are responding to any marketing you may be doing, which season is the busiest, etc.

By having information like this at your fingertips, you can tailor your marketing efforts to make more money. For example, if you see that the bulk of the calls you’re getting come from a certain geographic area, you can market more heavily in that area. As another example, if you see that approximately 50% of the calls you’re getting are for light repairs, you can offer special deals and discounts to bring more of those types of jobs in.

This is the kind of info (ie, market research) large companies like Home Depot and WalMart use to fatten their bottom lines. Only you don’t have a marketing department or Harvard MBAs on your staff to conduct this type of research for your foreclosure cleaning business. And luckily, you don’t need to.

A simple Caller Intake form can do the job for you. In fact, this one simple little form – that you create yourself – can help guide the growth of your business for years to come.

How to Set Up Your Caller Intake Form

The Caller Intake form you create for your foreclosure cleaning business should include, at a minimum, the following info:

–Date/Time of Call

–Caller’s Name

–Caller’s Company Name

–Caller’s Contact Info (at minimum, a phone number; if possible an email and mailing address). Note: The person answering your phone can say something to the effect of, “Would you like to subscribe to our newsletter? We offer special deals and discounts on services in it, in addition to providing valuable industry info our prospects can use.”

If the person says yes, then get their email address.

–Location of Prospective Foreclosure Cleaning Job

–Scope of Job (ie, what they want done)

–Job Deadline (When they want the job completed)

–Date/Time Prospect is Available to Meet for Estimate

–How Caller Heard About Your Foreclosure Cleaning Company

How the Foreclosure Cleanup Caller Intake Form Can Help Grow Your Business

The Call Intake form ensures that you get all the information you need to give the prospect exactly what they asked for. It will make your enterprise appear professional because you won’t have to keep calling the prospect back to ask questions.

It should take you no more than 10 or 15 minutes to pull this form together using the tips here. Again, it doesn’t have to be fancy; just thorough.

Call Patterns that Will Guide Your Decision-making

As time passes, you’ll start to see a pattern in your calls, eg, are most calls coming in the early evening, mid-day, or morning? The intake form will also reveal whether most of your call activity is happening at the end of the week or the beginning of the week, mid-month or end of month, etc.

Phone Activity vs. Actual Jobs

As your foreclosure cleaning business grows, you will see which months received the most phone activity versus actual jobs. You’ll also notice that certain times of the month may see you acting as an “estimate machine. ”

However, when when you compare your call sheet to the actual foreclosure cleaning job estimates given out compared to the estimates that eventually led to jobs, you’ll may be able to discern a pattern that you can use to make better decisions moving forward.

For example, after a while you’ll be able to forecast with some degree of certainty that in this particular month, we will be geting “x” number of calls, which we know will lead to “x” number of estimates, which will then lead to “x” number of actual foreclosure cleaing jobs.

Then, you can go back to see if your foreclosure cleanup calls spiked as a result of a certain type of marketing you did (eg, postcards mailed, calls made, email campaigns sent out, etc.). Once you make this connection, then you can double up on the marketing that worked and eliminate the marketing methods that weren’t as effective.

Geography Matters

This is another thing you’ll be able to see from your caller log, ie, where most of your calls are coming from as opposed to where most of the actual foreclosure cleaning jobs you landed are located.

How’d They Hear About You?

The line near the bottom of the call intake sheet is crucial to your marketing budget — and landing more foreclosure cleaning jobs. Why? Because it will tell you which marketing methods are most effective; hence, you can do more of this type of marketing to land more jobs. .

Note: While you may not be able to ask all the questions on your call log, do your best to get an answer to this one; it is the most important.

Create Your Call Intake Form and Use It from the Day You Open Your Business Doors

If you don’t have a call log, create one using the guidelines outlined above. And, no matter who you hire as your receptionist (can be family, friends, formal or informal administrative help), call in and test them to see if they are asking the questions on the form. While some calls may not lend to a full intake, most will.

An Invaluable, Free Marketing Tool for Every Foreclosure Cleaning Business

As you can see, this one little seemingly unimportant form provides a wealth of information — right at your fingertips — that you can use to grow a very lucrative foreclosure cleanup business for years to come.

P.S.: Read how one foreclosure cleaning business owner makes up to $40,000/wk.

P.P.S.: Like this post? Follow Foreclosure Business News on Twitter.

Copyright © 2010 Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author.