Should I mail free and clear owners?
By Josh MillerUpdated 4 min readNot as your first list: across 2,170 counties, about 1.5 of every 100 free and clear owners sold off-market within 12 months, a little under a house picked at random, and they trailed a random house in 1,492 of those counties. High equity owners living elsewhere were a coin flip, so use both as a filter on top of a dated event, not as the list itself.
Free and clear is the biggest list in the business. In the 2,170 counties we measured, 35,163,184 owners held their house with no mortgage. Within 12 months, 524,749 of them sold off-market.
Picture a stack of 5,000 letters to free and clear owners. At that rate, about 75 of those people sell their house off-market in the next year. Mail 5,000 houses picked at random in the same counties and you'd reach about 80.
That's the whole problem in one stack. The list everyone starts with sells a little worse than no list at all.
What we counted
For each county, we took everyone on the free and clear list, then checked the county's deed records for an off-market, arm's-length sale in the 12 months that followed. No MLS listing, no transfer to a family member. The sale a mail investor can actually win. Then we put a house picked at random in the same county next to it.
Free and clear owners sold less often than a random house in 1,492 of those 2,170 counties. They beat it by a wide margin in only 5.
High equity is a coin flip
High equity owners who live somewhere else did a bit better: about 1.8 of every 100 sold off-market within 12 months across 1,794 counties, against about 1.6 for a random house. But in 844 of those counties they came in under a random house. Flip a coin and you'll call your county about as well.
| County | Free and clear | High equity, living elsewhere | Any house, at random |
|---|---|---|---|
| Harris County, TX (Houston) | 1.1 | 1.3 | 1.4 |
| Bexar County, TX (San Antonio) | 1.3 | 1.9 | 1.7 |
| Tarrant County, TX (Fort Worth) | 1.2 | 1.5 | 1.3 |
| Maricopa County, AZ (Phoenix) | 1.3 | 1.7 | 1.4 |
| Cook County, IL (Chicago) | 1.3 | 2.6 | 1.1 |
| Wayne County, MI (Detroit) | 2.9 | 2.9 | 1.7 |
| King County, WA (Seattle) | 3.6 | 2.9 | 3.7 |
Source: GoForClose count of off-market, arm's-length deeds in county records, 12 months.
Houston is the clean example. About 457,000 free and clear owners on record, about 1.1 of every 100 sold off-market within 12 months, and a random house beat them. Detroit shows why you check anyway: there, free and clear owners sold at about 2.9 of every 100, well ahead of a random house.
It changes by state, and Texas is the worst of it
Free and clear beat a random house in only 12 of 154 Texas counties we measured, 1 of 60 in Oklahoma, 3 of 84 in Iowa and none of 17 in Kansas. It did better in Michigan (46 of 68), Utah (8 of 11) and Massachusetts (13 of 14).
High equity flipped the other way in places. It beat a random house in 31 of 33 Illinois counties, 51 of 54 in New York and 89 of 97 in North Carolina, but in only 3 of 49 Georgia counties and 9 of 52 in California.
In Fulton County, GA (Atlanta), about 0.9 of every 100 high equity owners living elsewhere sold off-market within 12 months, against about 1.5 of every 100 houses at random. In Cook County, IL (Chicago), it was about 2.6 against 1.1.
So "high equity is a good list" is true in Chicago and false in Atlanta, from the same kind of records in the same year. That's why we never quote a national rule for a list like this.
Why the logic doesn't show up in the sales
The case for free and clear sounds right. No loan means the owner can take less and still leave with cash. They can carry a note. They don't need a lender's permission.
All of that is about whether a deal works once the owner decides to sell. None of it makes them decide. A lot of free and clear owners are people who paid off a house they plan to stay in, which is the opposite of a motivated seller.
And it isn't free to find that out. The filter is free; it's sitting in the list tool you already pay for. What it costs is the skip trace, the postage and the hours on owners who were never going to sell, and those cost exactly as much as a good name does.
What to do with the list instead
Use free and clear as the second filter, not the first. Start with an owner who has a dated reason to sell now: a foreclosure filing, an expired listing, a lien, a probate case, back taxes. Then sort that list by equity, because equity is what lets you make an offer that works for both of you.
Foreclosure filings, expired listings and liens sold off-market at about 4 to 13 of every 100 within 12 months of the filing in the counties we measured. The full table is here, and here's how stacking works.
Then look at your own county. Your free and clear owners may be the Detroit kind or the Houston kind, and the county's records already know which.
Questions investors ask
Are free and clear properties good leads for wholesalers?
Not on their own. Across 2,170 counties we measured, free and clear owners sold off-market at about 1.5 of every 100 within 12 months, against about 1.6 of every 100 houses picked at random in the same counties. They came in under a random house in 1,492 of those counties.
Why do investors mail free and clear owners?
Because there's no loan to pay off, the owner can take a lower price and still walk away with cash, and they can sell on terms. That's true. It just doesn't make them more likely to sell this year.
Is a high equity list better?
Barely. High equity owners living elsewhere sold off-market at about 1.8 of every 100 within 12 months across 1,794 counties, against about 1.6 for a random house, and they were below a random house in 844 of those counties.
When does a free and clear list work?
When it's stacked on a dated event. A free and clear house with a probate case, a lien, a code violation or back taxes has a reason to sell now. The equity is what makes the deal work once it does.
Do I pay extra for a free and clear list?
No. It's a filter inside the list tool you already use. The cost is what comes after: skip tracing, postage and your time on owners who were never going to sell.