Casting for Leads

In addition to properties being underwater, another issue with real estate leads at this time is the slow growth in construction. Construction projects slowed to a near standstill after 2008 due to the mortgage crisis. Now, banks are making it almost as hard for companies to get loans as they have for individual buyers. This means there are fewer new construction projects happen- ing, adding to the squeeze in the real estate lead market. When a home does come on the market, due to the shortage in properties available, the prices have been driven higher than might occur in a normal market. Fewer homes with more peo- ple bidding on them will naturally cause an increase in price. In fact, many real estate agents are reporting that their listings are selling within days for more than the stated listing price. CREATIVITY NEEDED IN LEAD STRATEGIES All of these factors point to the fact that creativity and flexi- bility are needed in the real estate investing market right now. While you could simply focus on the traditional market, you will find there are fewer homes to choose from, and you may have to pay a premium to purchase them for your portfolio. For that reason, many real estate investors have been shying away from traditional lead sources and are looking for alternatives. One alternative is the foreclosure market with the properties be- ing held by a bank. These properties are sold “as is” and frequently have damage that is a direct result of homes being abandoned by their owners. There is also the issue of having to evict squatters who have taken up residence in a property that you would like to purchase. Because banks are actively trying to recoup their losses, they are less likely than at any time in history to give you a quick answer on your bid, work with you on the pricing or commit to a quick closing. In fact, many banks are now expecting market prices for homes that are in dismal condition. PROBATES ARE AMEANINGFUL OPTION While no real estate investor should eliminate a lead source from his or her business—as each of them can yield a gem, whether the traditional, new construction or foreclosure mar- ket—there is definitely room for another option. Seasoned real estate investors are now adding probate leads to their options when looking for leads. While many people aren’t familiar with probate leads, they have been on the market for decades. Probate leads are generat- ed when probates are filed in a local courthouse, and they can be a great way to add to your options for your buying area. Pro- bates can include a wide variety of investments. Having access to these leads is a great way to diversify your lead strategy and give yourself some additional options when looking for proper- ties to add to your portfolio.

What probate leads offer is a way to diversify your lead strat- egy and include more than just one type of real estate listing. This option can give you ways to find lower-priced properties that may have more flexibility in their terms.


WHAT ARE PROBATE LEADS? Probates leads include information on property that is part of a legal filing after the death of a loved one. These cases include many types of property that may have been owned by someone who has passed on: homes, vacation homes, cars, RVs, businesses, commercial property, rental property, artwork and other personal property. These cases are listed in each county after the death of a loved one where a probate needs to be filed and are controlled by the local court. Generally, this property has to be sold in order to pay for medical, tax, legal and funeral expenses. The court will assign an executor to handle the sale of the property so that these obliga- tions can be met and the heirs can receive any remaining funds.  PROBATE LEADS ARE THE CADILLAC OF LEADS As part of an overall investment strategy, probate leads are valuable because they come with very motivated sellers. Executors need to deal with the property that is in the probate filing in order to meet the court requirements. Many times, they need cash in order to pay bills that have been left after the passing of their loved one. Executors also realize that the property they are selling may need updates. This creates a situation where the executor may be willing to sell the property for a discount. Finding prop- erty at a discounted rate in today’s market is a real challenge, and that is what makes probate leads such an important part of an overall lead strategy. These properties may be available for 30 percent to 50 percent off the market price and are gen- erally available for a quick closing.

by Leon McKenzie


market. Banks and lending institutions are hesitant to lend to those who don’t have stellar credit. While a decade ago it was easy to get money to purchase a home or put on an addition, leery banking businesses simply don’t want to take the risk and have to add more properties to their foreclosure rolls. This, too, is adding to the restriction in leads.

xperts in the real estate industry always have a focus on bringing in leads for their real estate business. With- out a steady stream of properties to look at, it can be nearly impossible to meet your investment goals. That said, there is an ongoing challenge in finding investment properties in the real estate market due to ongoing tightening on the supply side.

FACTORS THAT HAVE CAUSED A LEAD SHORTAGE Since the recession of 2008, homeowners have not been as eager to put an ex- isting home on the market. Challenges with the home being “underwater”—or worth less than the original value it was mortgaged for— have made it difficult for people to sell their homes, as their mortgage balance can be higher than the sell- ing price for their home. These same homeowners can’t sell their homes be- cause they cannot afford to bring money to the closing table, so they are staying put. This means there are fewer homes coming onto owners can’t afford to sell their homes, so they aren’t upgrading or downsizing. Getting an individual mortgage is also a chal- lenge at this juncture of the the residential market throughout the nation, stalling supply. Home-

HOWLONG ARE THEYVIABLE? New users of probate leads may think the leads would have a short time on the market. That is not the case, in fact.

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Leon McKenzie is chief operating officer of U.S. Probate Leads, which he co-founded 12 years ago. The company has grown to become a leading provider of probate leads for virtually every county in the United States, using a national network of researchers who collect data directly from individual probate courts each month. Contact him at or 877-470-9751.

48 | think realty magazine september :: october 2016

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