Not all homeowners have the luxury of waiting out the recession in the comfort of their homes. Some can no longer afford their monthly mortgage payments. Others are facing foreclosure. Some may even have to relocate to find or retain gainful employment. These people must sell, and they typically have to sell in a hurry. In most housing markets these days, that translates into the painful prospect of selling the home for less than they owe on it. And very few homeowners can afford that option.

The solution may be one or more short sales – negotiating a deal in which the lien holders agree to accept less than full payment as payment in full on any loans taken out against the property. This may include the first mortgage, home equity loan or line of credit, and any construction liens. Although few lenders will go along with a short sale that enables the homeowners to profit, many are willing to agree to a deal in which the homeowner can break even if it enables the lenders to forego the expense and hassles of having to foreclose.

You may be wondering at this point what this has to do with you. As a real estate agent, you may be in an ideal position to assist sellers with their short sale needs. After all, most homeowners have no clue on where to start or how to effectively negotiate with their lenders. In addition, lenders are often skeptical when homeowners call, asking or demanding a short sale. Your status and reputation as a real estate professional gives you more credibility in the lender’s eyes. The lender is likely to be more willing to listen to a real estate professional who knows current market values and the price and timeframe for selling the property.

Negotiating short sales on behalf of your clients can benefit you in several ways, some direct and some indirect:

• The homeowners are more likely to contract with you to list their home when you have offered valuable advice and a viable solution to a serious problem.

• You generate positive word-of-mouth advertising by assisting homeowners in distress.

• You help prevent foreclosures that can further depress home values in your market.

• You establish valuable professional relationships with lenders that have the potential of generating additional business and opportunities later.

Before contacting lenders and other lien holders on the homeowner’s behalf, obtain letters signed by the homeowners authorizing you to negotiate on their behalf. Then, spend some time crunching the numbers. You will usually have more success negotiating with junior lien holders, because they stand to lose the most from a foreclosure. The foreclosure could wipe out their lien against the property, leaving them with nothing. By negotiating a short sale with you, they can salvage at least something out of the deal.

Also, be prepared to have the lenders come back to you requesting that you lower your commission. Whether you agree to accept a lower commission is entirely up to you, but by being prepared for the possibility, you will be in a better position to deliver an answer ... or a counteroffer.

Remember: We are all victims of foreclosure. By helping homeowners avoid foreclosure, you contribute to stabilizing your housing market, expediting its eventual recovery, and preserving the American Dream.

Published: March 2, 2009

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Ralph R. Roberts, CRS, GRI is an award-winning and internationally recognized real estate agent, author, coach, and speaker. Throughout his career, Ralph has proven his commitment to helping other real estate and sales professionals build upon their past and present success, grow and expand their businesses, and provide a rich and rewarding future for themselves, their customers, their employees, and their families. As president and CEO of Ralph Roberts Realty, Ralph has personally helped thousands of consumers realize their dream of homeownership. While selling over 10,000 homes (and buying and selling over 3,000 investment properties) throughout his 30-year career, Ralph has made the time to mentor and coach hundreds of professionals in real estate, sales, and a host of other fields. Ralph is a recognized authority on Real Estate and Mortgage Fraud; Residential Real Estate; Personal Salesmanship; Sales Force and Office Management, Motivation, Design, and Team Building; and Foreclosure Self-Defense and Loan Modification, fields in which he has demonstrated his commitment to preserving the American Dream of Homeownership. Ralph's numerous websites, blogs, seminars, and speaking engagements engage, entertain, and educate both consumers and professionals. Ralph is also an accomplished author with several successful titles to his credit, including: Power Teams: The Complete Guide to Building and Managing a Winning Real Estate Agent Team Financing Real Estate Investments For Dummies (John Wiley & Sons) Mortgage Myths: 77 Secrets That Will Save You Thousands on Home Financing (John Wiley & Sons) Foreclosure Self-Defense For Dummies (John Wiley & Sons) Protect Yourself from Real Estate and Mortgage Fraud: Preserving the American Dream of Homeownership (Kaplan) Foreclosure Investing For Dummies (John Wiley & Sons) Foreclosure Myths: 77 Secrets to Saving Thousands on Distressed Properties (John Wiley & Sons) Advanced Selling For Dummies (John Wiley & Sons) Flipping Houses For Dummies 52 Weeks of Sales Success (John Wiley & Sons) Walk Like a Giant, Sell Like a Madman (John Wiley & Sons) Cross-Cultural Selling For Dummies (John Wiley & Sons) To learn more about Ralph, visit AboutRalph.com, check out his daily insights on real estate and mortgage fraud prevention at FlippingFrenzy.com, or visit his latest blog dedicated to helping distressed homeowners fight foreclosure, KeepMyHouse.com. You can reach Ralph at or by calling (586) 751-0000.