I thought I would bring up an interesting dynamic that I have seen in the Phoenix real estate marketplace with regard to short sales, or foreclosures for that matter.
It’s a bizarre psychology, in my opinion. Or maybe it makes sense to others. Here goes…
I was showing a Chandler home some time ago to my buyers where the sellers happened to be home, boxing up things for a move to South Chandler. They were moving to another home community in Chandler, ostensibly to rent.
Their current home was around 4,000 square feet in size and amazingly upgraded. The kitchen cabinetry and other upgrades were clearly high-end. The house was simply gorgeous and probably cost a premium when first purchased.
However, the homeowners were short selling the property. I don’t know the personal dynamics of why they had to sell. That’s not my concern.
When discussing the short sale with the homeowner, she let me know that the ceiling fans would not stay with the house, that ‘they bought those themselves after they bought the home and were taking them.’ I am paraphrasing here.
What struck me is the thought that the home was not theirs anymore but the ceiling fans were and that they were going to take them.
The Odd Psychology of Short Sales
When you buy a home, you are so proud because it is yours. If you add ceiling fans or other changes to it, you love it even more. If you were going to sell it outright (meaning you have equity), you would most likely be expected to leave the ceiling fans behind. You probably wouldn’t care. In any conversation that talked about where you live, you would call it ‘your home.’
Until you decide to short sell the home.
Now, it’s the bank’s house. They can have it. By the way, the bank won’t miss the ceiling fans from this house and I am going to take those. The bank may have financed nearly half a million dollars on this thing, but I put down $20,000. So, I am entitled to those fans.
The Right Psychology of Short Sales
When I buy a home, it’s mine. I have signed documents and though I owe money on it through a mortgage and the mortgage company has a lien on the property, I own the home. It’s my name on the title.
If I should be unfortunate and meet with financial stress where I have to short sale my property, the home is still mine. Until I sign away my rights to the title, it is still mine.
And if I have to give it back to the bank because it can’t be sold outright, I am not taking the ceiling fans.
Why? Because they are affixed to the home. They are part of the home. While I am losing a little money on the home, there is no doubt that in today’s climate banks are losing a lot of money on each home. So, who is entitled to the ceiling fans? If in the interest of doing the right thing leaving the ceiling fans behind which may help in some small way to boost the obtained value for the home for any lenders involved, you leave them behind.
I care about the banks because I can see that all of these losses are just going to come from my wallet later anyway. Of course, I don’t care for them nearly enough as I do my own family.
It’s a Shared Responsibiity
But, we all should lose in this. It’s a shared responsibility. When the bank was willing to lend us money, we took it readily. Most of the time, we knew what we were taking on and were happy to do it.
And just because you are short selling the home doesn’t mean that the home isn’t yours any longer and you should take items that are now part of the home. They are affixed now. Leave them behind.
We all are losing out from this whether directly or indirectly. At least we could soften the blow by showing some level of self-sacrifice above what some are doing across the marketplace.
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The psychology of people going through foreclosure is almost always wierd. I mean they didn’t keep their commitment to pay their mortgage, yet somehow it’s the banks fault so they’re going to do what they can to mess em up. This is the logic of losers.