Active Rain January 12, 2012

Real Estate Transactions are Stressful Enough, Then Add Foreclosure *POP*

I remember the conversation like it was yesterday, even though it was 1997 or 1998. The typically sweet, warm and cordial client and I were discussing our next move on a purchase offer, and I was advising them against what struck me as making a rash response. “Well if you don’t agree, Phil,” she said “Maybe we should just call the listing agent and deal with him directly.” It was out of character for this person, over the top, out of the blue, and hostile. And it was also very temporary. Everything worked out fine, but it made me appreciate that the stress of a real estate transaction can bring out some serious passions in people. That’s just how it has always been.

Stress can make a person cross-eyed crazy. 

That was 14 or 15 years ago in a healthy economy at lower prices. 

Now…add the shadow of foreclosure to the mix, a recession, and a terribly depressed housing market and you’ve got yourself a real party. Now we are talking 3-ring circus, half a bottle of vodka won’t calm me down stress. 

My job as a broker is to diffuse the stress and be the voice of reason. That’s not always easy. Take the lady in my example back in the 1990’s. If she were buying a short sale and dealing with stressed out homeowners facing foreclosure and financial crisis, it would be like throwing gas on an already roaring fire. 

The thing that all buyers should understand is that what might, in the fog of stress and emotion, look like manipulation or game playing on the part of a distressed seller is actually just normal people trying to cope. For example: I have had situations where buyers have been eager to get the seller to sign the contract. However, there have been delays on the seller’s part due in large part to their circumstances. A signature might be delayed because a divorced spouse is out of state or working funny hours at a second job to make ends meet. Or a financially distressed seller can’t make a repair until after they squirrel up some extra money. 

And yet the buyers sometimes don’t see that. They see delay. Games being played. Shenanigans. That’s what it seems like to them. 

What the buyer often doesn’t understand is that their sensibilities are innaccurate because they are stressed and on edge in a situation that occurs in life but a handful of times. The seller isn’t playing them. They are just dealing with hardship. It is all in how you interpret through your mental filter. The best thing for the principals to do in a sale- especially a distress sale- is to practice deep breathing and not trust their physical impulses. Suspicion of the unknown may have helped our ancestors survive with sabre-toothed tigers, but it doesn’t help negotiate real estate. 

That’s what brokers are for.