I remember when….

The last thing you would pay late was your house.

Your car would be repossessed, your cell phone would be shut off….and your weekly grocery budget would go to Ramen Noodles and Mac and Cheese. Heck, you would have the water and electricity cut off before you would miss a house payment…

Missing a house payment…let alone a foreclosure was akin to being the town leper.

I have very distinct memories as a kid of my parents always making sure the house payment was paid. There were times when other things wouldn’t be paid so there would be enough scratch to cover the mortgage……that means the cable, phone and even the water (once or twice) would be sacrificed for the house payment.

Do you remember those days?….well, all that has now radically changed…

Before (and when I say before we are talking about only 24-36 months ago) one of the very tenants of our country was that you paid your debts. In ancient times when you didn’t pay your debt you would have been flung from the highest cliff or at the very least had an arm chopped off.

Lets look at the reality of today.

When someone loses a job they often have to make very few sacrifices….as in doing without. Let me explain. Most Americans largest single monthly expense is their home. Followed by their myriad of other reoccurring monthly expenses..cars, boats, hot tubs, 4,889 channels on their cable or satellite dish etc.

With all the various government sponsored housing programs if someone stops making a house payment they can often stay in their home payment free for months…and in some states…years. For example. In Ohio if someone files a few extra forms and makes a little extra effort they can stay in their home payment free for 2 years..or longer.

SO, where exactly IS the motivation for someone to actually make a house payment? The negative ramifications of not making a house payment have all but…gone ‘poof’.

Here is an excerpt from The Herald Tribune:

Phil Agnes and other lawyers have two words for homeowners facing foreclosure: Stay put.

The flood of foreclosures has clogged the courts, allowing homeowners to stay in their homes while the paperwork goes through the system. Many homeowners are unaware that they can remain at home for months while the foreclosure is in court, attorneys say.

And homeowners willing to challenge the foreclosure sometimes can remain in their homes for more than a year, sometimes more than two years, just by filing a few basic legal documents.

“It’s in everyone’s best interest to stay in the home,” said Agnes, an attorney who volunteers at Gulf Coast Legal Services Inc.

What are the real ramifications of creating a system that motivates people to not meet their obligations? I am no fan of some of the really terrible crap that the lenders pulled over the last 5-7 years. But, look at it from their perspectives. If YOU were a lender how motivated would you be to make mortgage loans when their repayment is now seen as ‘optional’.
Listen, I am not insensitive to the financial plight facing millions of Americans. Remember, I when I was the kid I saw my family dealing with financial hardship there would be times when we didn’t have a working phone etc. But, my parents knew that if they didn’t make the house payment they would be tossed out. Now, people are being rewarded for not making their house payments…

And I will go one step further with this. With the banks getting bail outs and their ‘negative equity’ (called toxic assets) being admonished…is it really wrong for the rest of us to do the same? Heck, NONE of us voted for the bail outs!  WE didn’t rewrite the rules for financial responsibility. Starting with George Bush and now with the new President a HARD RESET was hit and all the rules have changed. Does it make sense for the homeowner who is upside down in their home by 20…30….50% to stay in their home? Especially considering that the real estate markets will take years (maybe decades) to ‘recover’. Given the current environment it could be easily argued that the smart upside down homeowner has their property for sale…listed as a Short Sale.  In essence, creating their own ‘bail-out’.

Before you fire off a nasty email telling me that we are some how advocating financial irresponsibility please understand, we didn’t make the rules. Sure, HREU is the nation’s largest online real estate university. But, I promise you we don’t have that kind of influence. Matter of fact, there are many new studies coming out that show the homeowners most likely to unload their own ‘toxic asset’ are actually the well-heeled, better educated…and gainfully employed. Read the article HERE

I am not judging. In no way do we pretend to hold any sort of moral high ground. What I am suggesting is that when you motivate people to NOT make their house payments…that is exactly what they will do.

As a Realtor, what do you do with all of this?

You understand the trend and if you are smart you…dare I say….try to be a part of it. Please don’t translate what I am saying as, “HREU is coaching their students to tell  sellers to not make their house payments…” NO, that is not what we are suggesting.
Matter of fact, we feel counseling your sellers to not make their house payments could be seen as unethical. (I know many will disagree with me on that point and we welcome the debate.)

However, when there is a massive shift taking place you either have to be part of it or you will get left behind. As we are fond of saying…’You are either a gas hog SUV or you are a Hybrid’. The world (like it or not) is going Hybrid. Don’t swim against the tide…let it carry you to where you want to be.

Its YOUR JOB to know how to help your homeowners. In this market you have to be the kind of agent who has the mindset to be of service and the skill set to serve.

So, lets talk about the opportunity. I am about to say a word that will inevitably elicit two distinct responses. Before I tell you the word I want you to pay very (very) close attention to what your response is. YOUR response to this word will tell you a lot about how you think…and how your thinking may be hurting you…

Ready for it…here is the word…..

SHORT SALES.

Ok, be honest..what was your response? Did you respond by:

1)    Experiencing a gag reflex and maybe tasting a little bile in the back of your mouth? Does the very thought of a Short Sale cause you  to quiver in fear? Be honest with yourself….what do you REALLY think about Short Sales?

1a) Or did you simply stop reading this post…?

Remember, watch your own reaction and learn from it. Be awake and AWARE of the power of your thoughts.

Chances are if you had a negative reaction to Short Sales its because of some very limited experience…maybe you ‘tried’ a Short Sale..or you ‘heard they don’t work’ or were told something negative from the office know-it-all. I bet that your reaction, if it was negative wasn’t based on truth..wasn’t based on your true experiences. Its was based on your fear and internal desire to stay in complacency.

Do you see how your thinking is holding you back? How you think will define what you think…and what level of success you will ultimately allow yourself to experience.

Or maybe you reacted like this:

2)    I LOVE Short Sales. More than that…I look for Short Sales night and day. I know that there is a seemingly endless supply of short sales. Even better, there is virtually NO competition! Other agents (maybe even my broker) actually believes that Short Sales don’t close, are hard to do etc.

(Did you listen to the recent Superstar Interview with Vicki Watzlawick…? She is tracking to close hundreds of short sales this year.)

If you are in this second group you are most likely having your best year ever. You are not living in fear..you are totally motivated and pumped about this housing market. Other agents are living in fear and praying day and night to the real estate gods that this housing crash will end. While you may miss the better economy you aren’t waiting around for anything to change. You are embracing the change and….let’s be honest….making a fortune.

If you have read this chances are you are an HREU student (or should be) so, you know what I am about to say….

The ONLY TRUE HOPE FOR HOMEOWERS WILL COME FROM CARING COMPETENT AND SKILLED AGENTS. Agents who have the mindset to be of service and  the skill set to serve. Its not about who is right…or who is wrong. Its about helping others. Heck, I am old enough to remember how things used to be…and hopefully versitile enough to adapt and change to how things are. Are You?

One last thing…..Watch the FREE Agent Short Sale Secrets video and download your FREE Short Sale Secrets book.

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