“Ignorance is innocence - stupidity comes with experience”

What a great quote to follow up yesterday’s post about short sales. As I look back on things, I think I can claim innocent ignorance in my first couple of short sale experiences. Now that I’ve had a few short sales, I must now admit to the stupidity that comes with experience. That’s one reason that I sought out a partner for the negotiation portion of the short sale business. The more that I experience what goes on in short sales, the more stupid the whole process appears to me.


The main speaker at the recent ConEd class that I attended on short sales made the point early in his presentation that one must leave common sense out of the process. He had great stories about the nonsense that his company runs into all the time in dealing with the lenders on short sales. There is little place for logic or common sense in the process.

Perhaps the most telling indicator that common sense might not prevail is the classification of all of these homes by the lender as “assets.” They are not someone’s home, they are assets. They are not a lovingly cared for family treasures, they are assets. They are not the single most expensive and important possession in someone’s life. They are assets. Once they are abstracted to the status of assets and then lumped with other assets into investment instruments that become the possessions of investors, all connection with reality and common sense is lost.

Assets, after all, must be dealt with using rules and computer models and their fates be decided by committees. Asset managers must be assigned. Committees must meet. Databases of the assets must be created and reports must be generated. Decisions cannot be made in haste with assets. And decisions must be made in an orderly fashion and with the consent of the investors in these assets. An organizational structure must be created to deal with these assets, perhaps even special Web sites created. Why, an entire industry could grow up around these assets – and has.

Meanwhile out in the asset in question it’s been two months and no one has heard anything back from the lender about the short sale offer. Dad still hasn’t found work and the old family asset is starting to deteriorate. The family is innocently ignorant of the stupidity that is going on in the experienced land of asset management.

And yet that is our world of real estate. We do the best that we can to counsel patience and persistence to the people living in the assets. We hold hands with them. We commiserate with them. Sometimes we may cry or pray with them. Out at our end these assets are still someone’s home.