Below is the Article I Wrote for the NSDREI Holiday Booklet this Year...
The Personal Side of The Short Sale
By Richard Worcester
In business, as in life, there is one simple rule for dealing with people. It’s called the Golden Rule – treat people as you wish to be treated.
As a real estate professional specializing in short sale negotiations, you have to be part psychologist and part negotiator as well as a real estate professional. The mission today is much more than just selling property. Now, ultimately we must point everyone in the direction of healing and financial recovery.
The Short Sale business is one of financial distress. When meeting with a client for the first time, they are probably going to exhibit frustration, or even hopelessness. Often, they have been hounded by creditors for months or even years. Their personal relationships may be have suffered or even been destroyed by the financial distress. The may feel as if all hope is lost. I always encourage my clients to mark this meeting, this point in time, as the time when we turned things around and began the healing process.
The first thing to do is to show compassion for their situation. Enter the psychology angle… Frankly, many of us could say “there but for the grace of God go I”. Let them know the facts. Millions of people are in the same position. Maybe you have even been there yourself? It is important to let them know that you are on their side, that you are not there to judge, but to help. This is not hard to do, as the opportunistic and predatory practices of the lenders are mostly responsible. If necessary and the client so far gone, I will even tell them to adopt the attitude of “Us vs. Them”.
Once you have developed a plan with the homeowner, you have to start negotiating with the bank. Although we believe that the financial industry is mostly responsible for the housing collapse, we don’t blame or punish the individuals that we deal with at the bank when negotiating the short sale. Again, the Golden Rule applies. The people at the bank are not so different from your clients or you. They did not cause the problem. They are tasked to help clean up the mess. They have a difficult job, and if you treat them nicely and with respect, they will respond generously.
Ultimately, you will get a short sale approval and will have to put on your Real Estate Professional hat. As in all other parts of the short sale business, the best way to deal with people again is via the Golden Rule. The real estate business today is dramatically different than it was just 5 years ago. Agents, mortgage professionals, escrow and title professionals, even contractors and tradesman, are working much harder, for much less money, than the “go-go” days of 2005. The key to success in these areas is to listen, try to understand, then act. Understand what is needed, and respect the time and feelings of the party you are dealing with. Since you were a child, you have heard the saying you catch more flies with honey than vinegar.
You will notice there is one thing missing from this narrative. I have not discussed how you get paid / how much you will make. The reason for this omission is clear. It is my position that you must separate the job you are to do from the process of getting paid. Certainly, going in, it should be clear what and how you will be getting paid. But once that is established, your focus should be on helping the people and resolving the homeowner’s problem. Your paycheck has nothing to do with the client and their situation. Your goal is to help your client sell their property and get out from under this suffocating financial burden.
I have told the story many times of being in the kitchen with the clients and jumping up and down and hugging each other when we got short sale approval, as well as the story of sitting down and crying with them when we have been denied help and foreclosed upon.
Working in the short sale business is a huge emotional as well as professional commitment. A significant part of your daily job is managing your own emotional involvement and attitudes. It is very, very easy to get on an emotional roller coaster, because you care. You want to help these clients, and they are counting on you. In fact, you may feel you are their only ally in this negotiation.
So in the short sale business, as in life, remember the one simple rule. The Golden Rule. Treat others in your business as you would like to be treated. You will be surprised how much happier and successful you will be!
