By Ralph R. Roberts
RISMEDIA, February 2, 2009-Most real estate agents would describe current conditions in the mortgage and lending industries as brutal, at best, yet we like to project a sense of optimism to our clients. Eternal optimism is not necessarily a bad thing, but sugar-coating scenarios for homeowners who cannot afford their monthly mortgage payments or are facing a foreclosure often does a disservice to clients.
Distressed homeowners typically end up in trouble because they listened to a smooth-talking professional or failed to take an honest look at their finances. The last thing they need is a real estate professional feeding any of their remaining false hopes. Yet, many agents step into situations in which the homeowners are facing foreclosure and lead them into believing that their home is worth much more than its true market value, just to get the listing. This usually backfires on the agent as well as the homeowners. The overpriced home lingers on the market until the foreclosure clock runs out of time, driving the homeowners into a foreclosure they could have avoided.
Distressed homeowners need to hear the facts, however painful those facts may be. When you sit down with the homeowners to review their options, keep in mind that your role is to be open and honest and to lay out all available options.
You are also responsible for presenting homeowners with your honest assessment of their home’s value given current market conditions and the fact that they need to sell in a hurry. If this means that the homeowner would probably need to sell at a loss, it is a painful fact they need to be aware of and plan for-perhaps by initiating a dialog with the lender over a possible short sale.
Remember: When you’re dealing with homeowners who are facing the prospect of foreclosure, the clock is ticking. They need someone who can lay out their options and pursue the most practical of the available options. In “Foreclosure Self-Defense For Dummies,” I explain the most common and practical options for homeowners facing foreclosure. These options include getting a loan modification, working out a payment plan with the lender through forbearance, refinancing, declaring bankruptcy, offering a deed in lieu of foreclosure, and a half dozen others.
In many cases, the best option for distressed homeowners is for them to list and sell their home (with a short sale, if necessary), so they can move to more affordable accommodations. If selling is the best option for them, and the option they choose after careful consideration of all their options, then you need to come clean about the following:
– The condition of their home in relation to other comparable homes for sale in their neighborhood.
– A realistic listing price that is likely to attract interested and qualified buyers in the required timeframe.
Chances are good that the homeowners will embrace your honesty and integrity and choose to work with you. Of course, you may lose the listing to another agent who presents the homeowners with a rosier scenario, but if you are in this business (as you should be) for long-term success rather than a quick profit, you cannot let this get in the way of doing what is right.
When dealing with distressed homeowners, give it to them straight. Help them put a bad situation in their past and move on to better days.
Ralph R. Roberts is a consumer advocate, host of KeepMyHouse.com, and author of numerous books, including Foreclosure Self-Defense For Dummies. Ralph is based in Sterling Heights, Michigan and can be reached at RalphRoberts@RalphRoberts.com.
