Do you remember Wimpy from the old Popeye cartoons? He was always looking at what was in it for him. If you remember Wimpy, then you remember that he used to say, “I’ll gladly pay you Tuesday for a hamburger today.” The clear and obvious bottom line was that Wimpy wanted Popeye or the other characters to lend him money to purchase a burger, yet he would probably never pay them back. The burger was what was in it for Wimpy, and he was fiscally irresponsible.
As real estate agents, what is in it for us? Commission, of course, and life long referrals if we do a good job. Sometimes, however, the deal does not close or we do not make much commission yet we can still have an opportunity for future income if we provide excellent customer service and have stellar people skills. Helping someone sell or buy their largest asset or liability (even if the deal never closes) can go a long way towards establishing future business relationships.
I recently negotiated a short sale with two lien holders. The property had declined in value by about 60%. The first was willing to accept the purchase price on the sales contract, and was offering the second lien holder $3000 to release their lien. The second lien loan balance was nearly $200,000 and I was able to get the second from $20,000 down to around $5000 but they did not want to go any further. This is the part of the short sale transaction with which I have a huge love/hate relationship. This is when I am the ping pong ball that rallies between the first and second lien holders trying to see who will miss first. The rally goes on interminably and seems to be never ending. So, I decide to call the listing agent. Maybe the buyer would be willing to kick in the $2000? Maybe the seller would be willing to kick in the $2000? Maybe everyone could throw in a little bit? Heck if the seller really has no money and does not want to see his property go to foreclosure, I will help if I can.**
So, I give the listing agent a call. I explain the situation and he says that he would rather see the property go to foreclosure than throw in any money.
I call myself a Realtor®, I call myself a Broker and I call myself a Short Sale Expeditor®. I do not generally call myself a Commission give-away-er. But, at the end of the day, if I have a choice between earning $10,000 in 30 days or nothing, I would pick the $10,000 every day of the week, every month of the year—especially if it will help a client achieve their goal (in this case, avoiding foreclosure).
This listing agent is only looking for hamburgers today, not life long referrals tomorrow. He is missing out on the big secret: that the short sale is a way to grow your real estate business and fuel your real estate career for years to come.
If you want to be big, you have to think big. Big means not just the hamburger today, but the entire restaurant tomorrow. Unlike Wimpy, big also means being fiscally responsible.
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**I just want to remind everyone that if any party helps financially to close the transaction, this financial help MUST be disclosed on the HUD-1 that is supplied to the lien holders for final approval. Also, if the buyer is helping in any way, the buyer’s lender must also be aware of this contribution. Not disclosing this would be a violation of RESPA. So, if you plan to throw in a little cash to get a short sale closed, make sure that your participation is evident on the HUD-1 and has been approved by all parties prior to closing.