Selling Themselves Short

When practitioners are caught up in market woes, anguish and depression can damage their judgment.

January 1, 2012

People facing a short sale or foreclosure may be experiencing symptoms that mimic or closely resemble post-traumatic stress syndrome. Anger. Depression. Fear.

You don’t need to have been deployed to a war zone to be suffering from trauma, says Laurel Mulholland, a psychotherapist based in Boulder, Colo. Mulholland says. Trauma is relative.

Mulholland notes that when her clients discuss a job loss or foreclosure, their feelings resonate strongly with the term “trauma.” “There is a ripple effect. It may start with money problems, but it spreads to every aspect of the person’s life. The ripple becomes a tsunami. They are paralyzed; they see the collapse coming, but they feel powerless.”

Savvy practitioners have learned how to work with such feelings. Amy Coleman, owner of Golden State Realty Group Inc. in Sacramento, Calif., recalls that short sales began to ramp up slowly but steadily four to five years ago in her area. Today, more than half of the sales in her market are distressed sales. So Coleman incorporates a comprehensive initial consultation with clients. “I explain up front the emotions they’ll go through. If you can preempt the negativity, distress, and anger, it helps keep them calmer, whether it’s a six-month process or two-year process.”

Facing Up to Your Own Distress

But what if you’re the one facing foreclosure?

Real estate practitioners who are being traumatized by market realities often attempt to conceal their misfortune due to a combination of shame and the fear of causing further damage to their business.

Kathy McGraw knows how quickly one’s life and fortunes can change. Until early 2008, she was an independent broker with two offices in the Greater Los Angeles area and 10 agents under her license. As the market slid, she became depressed, and by January 2010, McGraw, then 59, had lost her home to foreclosure. Today, the Army and National Guard veteran and former Peace Corps volunteer, who was briefly homeless and then in transitional housing, is about to move into permanent housing. Her inability to afford dental care contributed to her downfall, she says. “People judge you on looks. It affected me greatly. Sometimes I would shut the phone off for days. It’s so easy to do the wrong things. A lot of decision-making skills were off. I’d lose papers. I gave my listings away because I couldn’t handle it. I had to let the two offices go. I knew I was slipping into a major depression.”

McGraw is now undergoing therapy and awaiting her permanent teeth. “I am working on getting my life back together,” she says. It’s unclear whether she’ll return to the real estate business, but for now she earns money as a notary.

A Nightmarish Situation

Seven years ago, Frances Flynn Thorsen was known as a go-to salesperson for HUD properties in Pennsylvania’s Lehigh Valley. That began to fall apart when she tangled with a predatory lender and wound up in foreclosure. Thorsen says she sought out the lender in the hopes of obtaining a quick fix on an IRS debt, a decision she freely admits showed poor judgment. “I should have hired an attorney to resolve the issue, but instead I went against my own instincts and procured the loan. Then my mother became ill with cancer, and I had less time to concentrate on my real estate business. Before I knew it, I had this nightmarish situation on my hands.”

Like McGraw, Thorsen found herself too paralyzed by anxiety to work. Her house began appearing on Internet foreclosure portals before it was actually foreclosed on, she says. “Buyers were tromping through unannounced. I was in a state of terror. My sister, who is a nurse, believed I was going into life-threatening trauma.”

Thorsen persevered and eventually regained her equilibrium. Now a real estate educator, writer, and public speaker based in Tucson, Ariz., Thorsen says her story is far from unique. “Agents often contact me who are struggling to keep their businesses afloat. They are literally shaking with shame. I encourage those who are threatened with foreclosure to consult a bankruptcy attorney. They need a fresh start.”

Beaty Reynolds is a freelance writer for REALTOR® Magazine.

Paula Hess

Paula Hess is a freelance writer for REALTOR® Magazine.