Even though the number of foreclosures may be declining, there are still many owners who are struggling with the issue of walking away from their homes.

How can you identify these owners before they lose their homes? And how can you help them possibly avoid foreclosure?

The upsurge in foreclosures has created a huge demand in the residential rental market. In many areas, rents are actually higher than the cost of owning a home. The issue is simply one of supply and demand. So what can you do to help people who are in the early stages of foreclosure or who may be considering a strategic default? Here are five options:

1. Early warning signals
I recently spoke with Curtis Fenn of TheRedX.com (full disclosure — the company is a past sponsor of my Awesome Females in Real Estate conference) about a new tool that it has just released. While a number of companies such as RealtyTrac and ForeclosureRadar provide information about the location of properties going into default, TheRedX provides the owners’ contact information and scrubs it against the Do Not Call list.

The advantages of having a potential seller’s contact information early on are enormous. Knowing when an owner first goes into foreclosure allows you to strategically target a print marketing campaign to motivate him to visit your website or to contact you about obtaining help on his foreclosure.

If you are accustomed to cold-calling or door-knocking, you can approach the homeowner with the following script: "Good morning. I’m Sally Agent with ABC Real Estate. I specialize in assisting distressed homeowners who may be facing foreclosure. Is having help delaying or stopping foreclosure a service that any of your neighbors or friends may want?"

Please note that this script does not ask the person whether he or she is the one interested. Instead, it’s asking if that person knows anyone who may be interested. This leaves the door open for the homeowner to ask for the information without having to reveal that he’s the one who really wants it.

If the person says, "Yes," here’s what to say: "I have a special report that lists four ways to stop or delay foreclosures. I can send it as an email to your email address or I can send you a text message that will take you to the report on my website. Which would you prefer: an email or a text message with the link?" (If you need help putting together a special report to use with your leads, watch this video.)

Whatever he says, you now have his contact information. By offering to help him, you also have the best chance of obtaining the listing.

2. Short-sale risks
Advise distressed homeowners to consult with their accountant or tax attorney about the various tax ramifications of a foreclosure, short sale or strategic default.

What many distressed property owners do not realize is that even if a lender approves a short sale, the homeowner may be liable for the difference between the sales price and what is owed on the mortgage. Depending upon the state and the type of the loan (recourse vs. nonrecourse), the lender may be able to seek a judgment against the owner if the person has other assets.

3. Fraudulent strategic defaults
Lately there has been a lot of buzz about strategic defaults. Many owners owe more on their property than it’s worth. Their approach to this issue is to buy another property because they can qualify, provided that they lease out their existing home. Once they are moved into the new property, they default on the first property. The lenders have become wise to this.

If you hear of anyone who is considering doing this, advise him or her that the lenders have started prosecuting people who engage in this behavior for fraud. Keeping the property as a rental is perfectly legal. Defrauding a lender about your intent is not.

4. Wait out the market
All real estate markets are cyclical, and we will pull out of this downturn at some point. In fact, in the last two deep dips that I have experienced, the market turned relatively quickly from a buyer’s market to a seller’s market. Consequently, renting a property rather than doing a short sale, foreclosure or a strategic default could actually generate revenue for the distressed property owner.

For example, when I checked the value of a friend’s house in California, Zillow.com showed the mortgage amount for purchase in this market at $1,400 per month. In contrast, the rental rate for that property was estimated to be $2,400 per month. If the owner’s situation permits, you may be able to help him with a lease of his property if he’s unable to sell.

5. Help desperate homeowners
Having early notification about who may be forced to sell your property allows you to help the homeowner with multiple options. For example, some sellers have discovered that they can rent out all or part of their property through Airbnb. This extra income can help owners make ends meet or can also allow them to downsize until the market improves and they can move back in to the property.

By helping someone keep their home until their personal situation improves, you earn their good will and usually their future business as well. If they must sell, research by the National Association of Realtors suggests that you have a good chance of listing the property if you are the first one to reach the seller.

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