Work Only With The Motivated

(They want to do it)

I am sure this has happened to you: you make the same proposal to two people. One person is indifferent no matter how well you present the benefits. The other person finds that what you have to say makes sense to begin with, and gets into action. If you have been in the short sales business for any length of time, by now you have already figured out that no matter how much effort you put forth in the former case, in the end it will be a waste of time. In the latter case, chances are, you will get full cooperation and come up with a profit. Why is that?

I used to think that I had to convince people about the benefits of my services. Then someone told me: “Convincing is a waste of time. Only work with people who are ready to act.” It took a while for that concept to sink in, but now I only work with clients that are already predisposed to appreciate what I have to offer them. In other words, I only work with the motivated.

Today, in my never-ending search for learning from the wise, I found a fitting quote from a prominent man. With respect to motivating, Dwight Eisenhower said “Motivation is the art of getting people to do what you want them to do because they want to do it.” As a powerful general, and later a politician, he had the ability and prerogative to impose himself over his subordinates. To him, leadership was not about forcing people, because “you don’t lead by hitting people over the head - that’s assault, not leadership”.

The real estate lesson is: Work only with motivated people because they want to do what you want them to do. The reason is simple. They do things because they see a benefit, not because they have been forced to do it. So only work with motivated sellers. From the beginning, they see a benefit in what you have to offer.

The fact is that perception is reality. Let me ask you a question: If a homeowner does not want to sell a property at the price the offers are coming at, because the homeowner perceives that the property is worth more, what are the possibilities of that homeowner consummating a transaction? In this situation, no buyer will purchase the property. We live in a capitalist society. The real value of a property is dictated by the market, not the seller’s perception. In this example, the way the homeowner perceives reality does not match the market; therefore, the homeowner is not motivated. As a real estate professional (agent or investor) this is a losing proposition. If the homeowner does not see a benefit, the homeowner will not be motivated.

In this present market, with the ever-increasing number of For Sale signs and negative real estate news in the media, homeowners in default are usually already pessimistic about the value of their property. Typically, they have little or no equity and feel that they do not have much to gain from a sale. They believe that they will come out of the transaction with nothing. So, as a real estate professional, how do you deal with this?

The answer to this is the fact that perception is reality. Focus on those clients who correctly perceive that your services are of great benefit to them. Even if immense benefits exist, if the homeowner does not perceive these benefits as such, nothing will change their mind. In the foreclosure business, especially with short sales, typically the benefit is that the homeowner will be worse off without the real estate professional’s help. In other words, the benefit is that things will be a lot more bearable.

Based on this rationale, the real estate professional’s job is to reduce the pain. In this case, this means bringing urgent financial and emotional relief. In real estate, finances and emotions are always highly intertwined. For clarity’s sake, I will separate and simplify them.

Financial Relief:
Homeowners in foreclosure who have taken cash-out second mortgages are almost certain to face aggressive collection efforts if that second mortgage does not get paid off at the foreclosure sale. Usually, that is what happens. These homeowners, especially if they are employed, at this juncture, have no way out of that debt. If the debt is large enough, collectors will attempt wage garnishment. Since October 2005, filing for bankruptcy has become a lot more penalizing and difficult. Homeowners about to face this situation will typically, and accurately, perceive that a short sale will eliminate or vastly reduce this impending hardship. The benefit of financial relief is the motivation.

Emotional Relief:
How pleasant is it to explain to oneself, one’s family and others, that the property was lost through foreclosure? If there is any pride, having to abandon a property in disgrace is very unpleasant indeed. Not only that, with that kind of tarnished credit, even finding a rental property can be difficult. What can be more emotionally distressing to the homeowner than losing the property and now having difficulty finding a place to live. This kind of pressure can break up a family. A short sale can provide a golden bridge for the homeowner. The benefit of an amiable sale that results in emotional relief is the motivation.

In short sales, it is imperative to work with motivated people because they want to do it. It is incredible how much is possible when people want to do something. Motivated short sale clients have the accurate perception that they will be better off than ending up foreclosed. They want to do it. So when selecting your clients, remember Eisenhower: “…people do what you want them to do because they want to do it.”

Written by Oscar Morante, of Advanced Real Estate Concepts, LLC.