Lose Some Pride or Lose Your Home?

It's been a long week and it's only Tuesday. So, let me unwind after a hard day in the housing mines by telling you a little story...

I recently listed a very nice home in a very nice neighborhood. The owners were very nice people. Everything, in fact, was awfully nice and swell until my phone rang early one Friday morning:

Caller: Hi, is this Suzy Trotta?

Me: Yes, how can I help you? [I have very good phone manners]

Caller: I'm calling about the foreclosure property you have for sale.

Me: Um, I don't have any foreclosure properties for sale.

Caller: Have you looked in today's News Sentinel? Cuz you do now.

Sure enough, an examination of the KNS foreclosure notices showed that my nice little listing was due to be auctioned off on the courthouse steps in two weeks. I called the number given in the notice, thinking this must surely be some bizarre mix-up. I mean, my sellers were such nice people.

The helpful woman at the law firm told me that yes, indeed, my listing was going to auction and the reason was that the current owners had not paid their mortgage in 7 months.

7 months.

I was completely dumbfounded. My nice little sellers? Those sweet folks whose dining room table I had sat at just a few weeks before? What the fudge?

I decided to call my clients to figure out what was going on.

Me: Hi, Mrs. Seller. Great news. We had two showings this week. And by the way, did you know your home is possibly going into foreclosure?

I waited.

One Mississippi...

Two Mississippi...

Three Mississippi...

Mrs. Seller: Why, yes, we did.

So there it was. They knew. They knew! My next immediate thought was, "Why in the world didn't they tell me?"

I know, I know, the simple answer was because they were embarrassed. But is suffering embarrassment worse than going into foreclosure?

Luckily we wound up being able to do a short sale and everything turned out pretty ok. Instead of going into foreclosure, those folks will now have to pay taxes on the amount of money the bank lost on the short sale and suffer the damage of the missed mortgage payments on their credit report. Still, much better than foreclosure, trust me.

My role in this situation was not to judge. I never really found out what prevented them from paying their mortgage, but that wasn't my business anyway. The fact was that my clients were still really nice people. They were just really nice people who go in over their head financially. Scheisse passiert as the Germans say.

No, my job was to sell that home before auction and I somehow managed to pull it off. Yes, that's the sound of me tooting my own horn. Toot! Toot!

But I'm not just telling you this story to show off my superior home selling skills. There is a actually a moral in this story that I think is very important:

If you are in trouble with your home financing and have missed payments or know that foreclosure is looming in your future, do not keep this information to yourself when listing your home. I know you want to try to sell it and pay the bank off and hope the whole mess just goes away without any of your friends and neighbors ever finding out. And I get that. I really do.

But the fact of the matter is that while real estate agents can certainly help you in this situation, we can only help you if you ask us to. If we know up front what your situation is, we can start working the phone immediately. Calling your loss mitigation coordinator. Calling investors. Calling other agents who know other investors. We can try to help you work with the bank to try and arrange a short sale. And a short sale, while not being the answer to your prayers, will still be much, much better than foreclosure.

So swallow your pride and ask for our help. Losing a little pride is a much better option than losing your home to foreclosure.