NASHVILLE, TN – At 6AM on Saturday morning, with the sun just beginning to take flight over the horizon, while in the solitude of birds chirping, water bubbling and my fly rod swaying to and fro, it dawned on me that closing short sales is much like fly fishing. Unlike other types of fishing, fly fishing requires a number of details to be executed correctly in order to catch fish. If just one of those details is amiss, you may not catch a single fish all day…regardless of how good the fish are biting. The same is true of short sales.
Recent news articles have been littered with real estate agents and investors complaining about not closing short sales. I would argue that in most cases, the reason why those deals didn't close was because one of any number of short sale details was handled incorrectly. Since many agents and investors in this country are handling one or many of the major short sale details incorrectly, it stands to reason that many are not closing deals…and instead of learning the correct way to close them, they have begun spending their time venting their frustrations to the press. I feel these complainers are inaccurately giving short sales a bad name and I want to clear the air on this topic. And surprisingly, fly fishing is a great metaphor for this.
I remember when I first began fly fishing for trout…I never caught a single thing. I would spend a whole day on the river, watching other angler's poles bending to the tugs of fish on their lines, some catching 30, 40 even 50 fish in a day, and meanwhile, I would go empty handed or “skunked” as they say. Even more frustrating was that I could see the fish, I would watch my fly drift past their mouths and they would simply ignore it. This went on for years and all my previous bass fishing experience, all the fly fishing books, magazines and TV programs…none of them helped solve the problem.
I became closed minded, convinced that fly fishing didn't work…even though I saw people catching fish on a fly rod everytime I went fishing. It's amazing to what extents we humans will go to avoid admitting our own ignorance. The truth was that it wasn't fly fishing that was to blame, it was me! It was my fault that I couldn't catch fish. And I was too arrogant and defensive at the time to admit my lack of fly fishing knowledge.
The good news is that I applied a lesson I learned from real estate investing (get a mentor) to fishing and invested in a fly fishing mentor (or in the fishing world, what they call a “guide”). In a very short period of time, I actually started catching fish. And what was so remarkable was that I didn't just catch one or two, I began catching a TON of fish everytime I went fly fishing. With the help of a mentor, I went from no fish to tons of fish. What a difference a mentor can make in producing the results you want to produce. “As iron sharpens iron, so one man sharpens another.” – Proverbs 27:17
You'll find the same to be true with short sales. Once you have learned the major details and are able to execute them correctly and consistently, your business begins to blossom and you close more deals than you ever dreamed possible. To illustrate, I have put together a short video of my fly fishing experience on Saturday and how it relates to short sales:
As you saw in the video, a very, very slight difference in my fly selection made the difference between catching a fish on every cast and not catching a single fish. This is but one of many different facets of fly fishing that my guide taught me. Once I was able to put all of these details together into practice correctly, I began to experience incredible fishing results. The same is true of short sales. When all the different facets are put together correctly, short sales consistently produce remarkable financial results for you without cash, credit or the normal risks and hassles of most real estate deals.
It is also equally true that if the details of a short sale are NOT handled correctly, short sales can be “anything but short” and in many cases, extremely difficult to close. There simply is no middle ground. It's all or nothing. That's why you hear of two types of people in the short sale business, those who are making a fortune and those who are not making anything at all.
Take fly selection for example. I equate picking the right fly to presenting the right offer to the bank. Before I had a guide, I didn't know if I was using the correct sized fly, the correct fly pattern and if the fish weren't biting, I had no idea what fly to switch to or if I should switch at all? Submitting the correct offer with a short sale is much the same. Make the wrong offer amount or input the wrong closing costs on the preliminary HUD and you can squelch a short sale deal before it starts. And then comes the counteroffer process and if you don't know exactly how the short sale business works, you are in the dark as to what to counteroffer and how much.
Another example is in presenting the fly to the fish (aka, the cast). The fly cast is similar in a short sale deal to communicating with all parties correctly. If you don't present the concept clearly, if you don't explain the process correctly, if you don't set the expectations properly and if you're not open and transparent throughout the deal, you can have everything else perfect and still not close the deal. Poor communication leads to distrust, and when the parties to a deal don't trust you, they leave and go elsewhere to work with someone else.
Another example is the time of day that I was fishing. It was right at daybreak as you noticed. In this case, the best time to fish was about 5AM to 9AM. I can catch a fish on almost every cast during those times in the summer. But once the sun gets up well into the sky, say 10AMish, the fish for the most part stop feeding until it cools off in the evening. Alot of previously delirious sellers come out of the woodwork a few days before their foreclosure auction date and make frantic calls to anyone and everyone willing to listen. Inexperienced investors or agents think they have a great potential deal on their hands and drop everything they are doing and spend two days trying to desperately help the sellers only to learn that it's too late. That's like fishing in the middle of the day when the fish aren't biting.
Sure, you could get lucky and the foreclosure date could be postponed, just like you could get lucky and catch a fish in the heat of the day, but the intelligent short sale investors and agents work smarter, not harder, and spend their time on the deals that have plenty of time before the foreclosure sale date. (Hint: We often like to start our deals when the homeowner is still current…that's like fishing while it is still dark in the morning. Some of the biggest fish are caught then.)
I have so many other examples, including having the right fly line, rod and reel equating to using the proper short sale tools and so many others, but this post is already getting quite lengthy. My intent was to explain why people like me tout short sales as the greatest thing since sliced bread and why others complain about them. The complainers haven't put all the details in place, they haven't put all the pieces of the puzzle together, and therefore, they come up short everytime. But for the successful short sale people out there, they will tell you stories of incredible amounts of money made and homeowners helped along the way. They will share with you that they wouldn't change what they are doing for the world…making huge checks without cash, credit, or the normal risks and hassles of most real estate deals. They will tell you that short sales have changed their lives forever. So you go…it was the best of times, it was the worse of times. In conclusion I want you to take away two key lessons…First, if you are fly fishing or doing short sales and are not producing extraordinary results, it's not fly fishing's or short sales' fault…it's yours…and Second, if you want to produce extraordinary fly fishing or short sale results, invest in a mentor.