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How emotion can get in the way of short sale negotiations

Short sale negotiations are not well known for being easy, and that’s why it is such a tricky niche, but knowing a simple truth about banks can help anyone inch closer to mastering the process.

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stress

People Buy with Emotion Not Logic

It’s not uncommon for agents and sellers to become very emotional during the purchase and sale of a home, particularly in a short sale situation due to the added stress of the hardship and the dealings with the lender. That being said, the more objective that agents (and sellers and buyers) can be, the higher the likelihood of success in the transaction.

Zig Ziglar once said, “People usually buy on emotion and the justify it with logic.” And, while that may work if you are trying to convince your spouse that you must have a new red Corvette, the short sale transaction will go a lot more smoothly if you can sit back and tap into the practical components.

When working on short sales, I often hear comments from sellers and other agents such as “Tell the bank that I do not have the money” or “Tell the bank that they are forcing my client into foreclosure.” The thing about short sale processing is that even though those comments are true, they will do absolutely nothing to elicit a quick and efficient short sale approval letter. I figured out a long time ago that the bank is not a thinking, feeling being. It is a business—and a very large one that is looking at its books, practices, and procedures when making decisions. It’s all about debt settlement; it’s not about you.

Banks Are Like Puppies

The best way that it can be explained is like this: If you or someone you know has a new puppy, you may say or hear such comments as “My puppy is sad” or “My puppy is lonely.” However, as you probably already realize, this is not the case. What happens is that folks project human feelings and traits onto their pets (also called anthropomorphizing). I’m not saying that banks are animals, but if you project emotions on the bank in an attempt to negotiate terms, you will soon realize that this negotiation style will not lead to short sale success.

Best Practices for Obtaining Short Sale Approval

What’s the best way to deal with the short sale lender? The best way to elicit short sale success is to provide the bank with the short sale documentation that they want. And, if that is not enough to help the lender make its decision about approving a short sale, then you need to strategize. Consider any other paperwork or documentation you could provide that could the lender to review and approve your short sale while keeping it aligned with their books, practices and procedures—while keeping everything objective.

Once in a blue moon, you may have a short sale processor or vice president that can override decisions and use a little bit of subjectivity. Sadly, however, this doesn’t happen all the time. Therefore, the best way to arrive at short sale success is retrain your brain to remember that the bank is like your new puppy dog, but probably not quite as cute.

Melissa Zavala is the Broker/Owner of Broadpoint Properties and Head Honcho of Short Sale Expeditor®, and Chief Executive Officer of Transaction 911. Before landing in real estate, she had careers in education and publishing. Most recently, she has been able to use her teaching and organizational skills while traveling the world over—dispelling myths about the distressed property market, engaging and motivating real estate agents, and sharing her passion for real estate. When she isn’t speaking or writing, Melissa enjoys practicing yoga, walking the dog, and vacationing at beach resorts.

Austin

Austin tops the list of best places to buy a home

When looking to buy a home, taking the long view is important before making such a huge investment – where are the best places to make that commitment?

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Looking at the bigger picture

(REALUOSO.COM) – Let us first express that although we are completely biased about Texas (we’re headquartered here, I personally grew up here), the data is not – Texas is the best. That’s a scientific fact. There’s a running joke in Austin that if there is a list of “best places to [anything],” we’re on it, and the joke causes eye rolls instead of humility (we’re sore winners and sore losers in this town).

That said, SelfStorage.com dug into the data and determined that the top 12 places to buy a home are currently Texas and North Carolina (and Portland, I guess you’re okay too or whatever).

They examined the nerdiest of numbers from the compound annual growth rate in inflation-adjusted GDP to cost premium, affordability, taxes, job growth, and housing availability.

“Buying a house is a big decision and a big commitment,” the company notes. “Although U.S. home prices have risen in the long term, the last decade has shown that path is sometimes full of twists, turns, dizzying heights and steep, abrupt falls. Today, home prices are stabilizing and increasing in most areas of the U.S.”

Click here to continue reading the list of the 12 best places to buy a home…

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Housing News

Average age of houses on the rise, so is it now better or worse to buy new?

With aging housing in America, are first-time buyers better off buying new or existing homes? The average age of a home is rising, as is the price of new housing, so a shift could be upon us.

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aging housing inventory

The average home age is higher than ever

(REALUOSO.COM) – In a survey from the Department of Housing and Urban Development American Housing Survey (AHS), the median age of homes in the United States was 35 years old. In Texas, homes are a bit younger with the median age between 19 – 29 years. The northeast has the oldest homes, with the median age between 50 – 61 years. In 1985, the median age of a home was only 23 years.

With more houses around 40 years old, the National Association of Realtors asserts that homeowners will have to undertake remodeling and renovation projects before selling unless the home is sold as-is, in which case the buyer will be responsible to update their new residence. Even homeowners who aren’t selling will need to consider remodeling for structural and aesthetic reasons.

Prices of new homes on the rise

Newer homes cost more than they used to. The price differential between new homes and older homes has increased from 10 percent traditionally to around 37 percent in 2014. This is due to rising construction costs, scarcity of lots, and a low inventory of new homes that doesn’t meet the demand.

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Housing News

Are Realtors the real loser in the fight between Zillow Group and Move, Inc.?

The last year has been one of dramatic and rapid change in the real estate tech sector, but Realtors are vulnerable, and we’re worried.

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Why Realtors are vulnerable to these rapid changes

(REALUOSO.COM) – Corporate warfare demands headlines in every industry, but in the real estate tech sector, a storm has been brewing for years, which in the last year has come to a head. Zillow Group and Move, Inc. (which is owned by News Corp. and operates ListHub, Realtor.com, TopProducer, and other brands) have been competing for a decade now, and the race has appeared to be an aggressive yet polite boxing match. Last year, the gloves came off, and now, they’ve drawn swords and appear to want blood.

Note: We’ll let you decide which company plays which role in the image above.

So how then, does any of this make Realtors the victims of this sword fight? Let’s get everyone up to speed, and then we’ll discuss.

1. Zillow poaches top talent, Move/NAR sues

It all started last year when the gloves came off – Move’s Chief Strategy Officer (who was also Realtor.com’s President), Errol Samuelson jumped ship and joined Zillow on the same day he phoned in his resignation without notice. He left under questionable circumstances, which has led to a lengthy legal battle (wherein Move and NAR have sued Zillow and Samuelson over allegations of breach of contract, breach of fiduciary duty, and misappropriation of trade secrets), with the most recent motion being for contempt, which a judge granted to Move/NAR after the mysterious “Samuelson Memo” surfaced.

Salt was added to the wound when Move awarded Samuelson’s job to Move veteran, Curt Beardsley, who days after Samuelson left, also defected to Zillow. This too led to a lawsuit, with allegations including breach of contract, violation of corporations code, illegal dumping of stocks, and Move has sought restitution. These charges are extremely serious, but demanded slightly less attention than the ongoing lawsuit against Samuelson.

2. Two major media brands emerge

Last fall, the News Corp. acquisition of Move, Inc. was given the green light by the feds, and this month, Zillow finalized their acquisition of Trulia.

…Click here to continue reading this story…

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