Stage Three: Bargaining. Traditionally, the bargaining stage for people facing death can involve attempting to bargain with whatever God the person believes in. Terminally ill patients try to rationalize with themselves: “I will accept this if I can make it to Christmas” or my son’s wedding (or insert holiday or event here). People facing less serious trauma can bargain or seek to NEGOTIATE a compromise. For example, “Can’t we still be friends?…” when facing a break-up. Bargaining rarely provides a sustainable solution, especially if it’s a matter of life or death.
For a short sale client, the bargaining stage provides the most critical phase in working with a Realtor. The most obvious outlet in the bargaining phase is the loan modification. While a loan modification has to be right for the homeowner and should be weighed on its own merits, the success rate for a long term modification has been less than fruitful and often results with the homeowner back into default.
When a homeowner enters the Bargaining Phase, they enter with the mind set of keeping their home. Here is where the disconnection from reality can hurt the homeowner. In this phase, a homeowner is doing whatever they can to keep their memory of the home… unfortunately, that memory often includes equity. An agent can have success in this phase by reminding the client of the difference between a house and a home. Agents that refer to the house rather than home help to detach the feelings associated with where someone lives. It is the agent’s responsibility to recreate the sense of home with the homeowner and family.
A house is four walls, a two car garage, with the Daytona floor plan and the bonus room. All of these items are very re-creatable, possibly around the corner, and maybe even for less than what they are paying right now on their mortgage. The point here is that given the inventory of rental homes in markets that have been hardest hit with the housing meltdown, several options exist to recreate a house to live in.
Agents should explain the term “home” in abstract terms. Examples such as the place where the kids go to school, the grocery store where you know which isle the dog food is kept, and the place you go to church… it’s the concept not the actual structure they are trying to keep. As an agent, if you can recreate “home”, while getting the client out from underneath their current house there is little left for the homeowner to bargain for, given their current situation compared to the better view.
The notion of hope has been discussed earlier. Here again hope plays a role. Agents that have the most success with planting the seed of hope, do so very early on, as early as the listing appointment. By setting goals early in the process, success can be pointed to along the way. Realtors should explain their goal is to get the homeowner out of this current situation and into a better housing situation down the road. Realtors should not think of or explain the short sale as the finish line; it is a starting point for the future. Working with the homeowner, the Realtor can outline how credit repair, saving, and time can put them back into owning a home.
By transferring hope into a forward looking object, the new home makes the current situation more tolerable and the homeowner is more likely to move forward and move faster to the acceptance stage.