I got a phone call yesterday regarding a letter I had sent to a homeowner in foreclosure...
We talked for a few minutes and went over some of the things he could do avoid the foreclosure, and try to keep the house. Quickly my list of options for saving the house were eliminated for one reason or another, and he asked me to meet with him today to list the house for sale.
When I got there, I presented him with closed comps the area from the last 6 months that would help him decide on a selling price... he didn't want to see them. He already had a price in his head before I got there based on an appraisal for a re-finance over a year ago, (re-fi appraisals always seem to come back higher than traditional purchase appraisals...). I tried to explain how using that number would be fine, but that it wasn't a good idea to inflate that estimate by $20K.
Not only do I imagine it won't sell at that price... but even if it did, I don't know of any bank will lend money $20K over the highest comp in the neighborhood unless the buyer pays the difference in cash. We are not seeing the same kind of appreciation in the market here in Plainfield, IL that we did a few years ago. Could it have happened in 2004, 2005, and even the first half of 2006, probably. But now?
He needed to see an equity sheet for the breakdown in the cost of selling his house. He needed to see exactly where he stood financially, in relation to how much he could realistically sell the house for. After doing the numbers based on where he stood today, the outlook was grim. He really does need to sell the house for much more than it is worth... just to break even.
I don't believe the house or the neighborhood warrant the asking price he needs to get... but I can't make him understand, what he doesn't want to see. He really needs to do a short sale on the mortgage just to get out from underneath it... the problem is, isn't really the owner of the property. The house is in his fathers name and he won't consent to a short sale because of the implications to his credit.
I was extremely frustrated by the experience, but none the less enlightened. I know this experience will make me be more prepared the next time I come across this situation. I need to develop my ability to overcome objections, especially when those objections are the very things keeping my clients in their current undesirable situation.
I will most likely not earn a commission for the listing on this house, and I'm okay with that... really. I know it will come back to me in some way... and because the process I went through to get it, taught me a valuable lesson...which may be payment enough for me!
How would you have handled this?
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