How emotion can get in the way of short sale negotiations

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.

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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.