| I am sure this has happened to you: you make the | | | | will come out of the transaction with nothing. So, as a |
| same proposal to two people. One person is | | | | real estate professional, how do you deal with this? |
| indifferent no matter how well you present the | | | | The answer to this is the fact that perception is reality. |
| benefits. The other person finds that what you have to | | | | Focus on those clients who correctly perceive that |
| say makes sense to begin with, and gets into action. If | | | | your services are of great benefit to them. Even if |
| you have been in the short sales business for any | | | | immense benefits exist, if the homeowner does not |
| length of time, by now you have already figured out | | | | perceive these benefits as such, nothing will change |
| that no matter how much effort you put forth in the | | | | their mind. In the foreclosure business, especially with |
| former case, in the end it will be a waste of time. In the | | | | short sales, typically the benefit is that the homeowner |
| latter case, chances are, you will get full cooperation | | | | will be worse off without the real estate professional's |
| and come up with a profit. Why is that? | | | | help. In other words, the benefit is that things will be a |
| I used to think that I had to convince people about the | | | | lot more bearable. |
| benefits of my services. Then someone told me: | | | | Based on this rationale, the real estate professional's |
| "Convincing is a waste of time. Only work with people | | | | job is to reduce the pain. In this case, this means |
| who are ready to act." It took a while for that concept | | | | bringing urgent financial and emotional relief. In real |
| to sink in, but now I only work with clients that are | | | | estate, finances and emotions are always highly |
| already predisposed to appreciate what I have to | | | | intertwined. For clarity's sake, I will separate and |
| offer them. In other words, I only work with the | | | | simplify them. |
| motivated. | | | | Financial Relief: |
| Today, in my never-ending search for learning from | | | | Homeowners in foreclosure who have taken cash-out |
| the wise, I found a fitting quote from a prominent man. | | | | second mortgages are almost certain to face |
| With respect to motivating, Dwight Eisenhower said | | | | aggressive collection efforts if that second mortgage |
| "Motivation is the art of getting people to do what you | | | | does not get paid off at the foreclosure sale. Usually, |
| want them to do because they want to do it." As a | | | | that is what happens. These homeowners, especially if |
| powerful general, and later a politician, he had the ability | | | | they are employed, at this juncture, have no way out |
| and prerogative to impose himself over his | | | | of that debt. If the debt is large enough, collectors will |
| subordinates. To him, leadership was not about forcing | | | | attempt wage garnishment. Since October 2005, filing |
| people, because "you don't lead by hitting people over | | | | for bankruptcy has become a lot more penalizing and |
| the head - that's assault, not leadership". | | | | difficult. Homeowners about to face this situation will |
| The real estate lesson is: Work only with motivated | | | | typically, and accurately, perceive that a short sale will |
| people because they want to do what you want them | | | | eliminate or vastly reduce this impending hardship. The |
| to do. The reason is simple. They do things because | | | | benefit of financial relief is the motivation. |
| they see a benefit, not because they have been | | | | Emotional Relief: |
| forced to do it. So only work with motivated sellers. | | | | How pleasant is it to explain to oneself, one's family |
| From the beginning, they see a benefit in what you | | | | and others, that the property was lost through |
| have to offer. | | | | foreclosure? If there is any pride, having to abandon a |
| The fact is that perception is reality. Let me ask you a | | | | property in disgrace is very unpleasant indeed. Not only |
| question: If a homeowner does not want to sell a | | | | that, with that kind of tarnished credit, even finding a |
| property at the price the offers are coming at, | | | | rental property can be difficult. What can be more |
| because the homeowner perceives that the property | | | | emotionally distressing to the homeowner than losing |
| is worth more, what are the possibilities of that | | | | the property and now having difficulty finding a place |
| homeowner consummating a transaction? In this | | | | to live. This kind of pressure can break up a family. A |
| situation, no buyer will purchase the property. We live in | | | | short sale can provide a golden bridge for the |
| a capitalist society. The real value of a property is | | | | homeowner. The benefit of an amiable sale that |
| dictated by the market, not the seller's perception. In | | | | results in emotional relief is the motivation. |
| this example, the way the homeowner perceives | | | | In short sales, it is imperative to work with motivated |
| reality does not match the market; therefore, the | | | | people because they want to do it. It is incredible how |
| homeowner is not motivated. As a real estate | | | | much is possible when people want to do something. |
| professional (agent or investor) this is a losing | | | | Motivated short sale clients have the accurate |
| proposition. If the homeowner does not see a benefit, | | | | perception that they will be better off than ending up |
| the homeowner will not be motivated. | | | | foreclosed. They want to do it. So when selecting your |
| In this present market, with the ever-increasing number | | | | clients, remember Eisenhower: "…people do |
| of For Sale signs and negative real estate news in the | | | | what you want them to do because they want to do |
| media, homeowners in default are usually already | | | | it." |
| pessimistic about the value of their property. Typically, | | | | Written by Oscar Morante, of Advanced Real Estate |
| they have little or no equity and feel that they do not | | | | Concepts, LLC. |
| have much to gain from a sale. They believe that they | | | | |