My Meeting with Dana

So I met with Dana and Kent. They have a bit of debt and a lot of equity. They wanted to sell, rent some place and pay off their debt. That's all well and good, but not realistic. First, they don't have oodles of debt. They have enough debt to be annoying. Second, they don't have so much equity they could buy another home for cash. Third, what they would pay in rent is considerably more than their mortgage payment. Essentially, they want to stop the short-term bleeding by chopping off their hands.

As much as I would love to sell their home to cover Buckaroo's insane grocery addiction, it isn't in their best interests. And that's one of the reasons some real estate professionals get into trouble--sometimes they work in their own best interests. It gives all of us a bad name.

Now, I am not virtue grandstanding here. In fact I really, would have rather offered them a listing contract. But the meeting just happens to be blog fodder. And more to the point, I do believe in Karma. I also believe in Heaven. Both of which I want on my side. Knowing what I know and letting them think that selling their home so they can do better wouldn't sit well with my conscience.

Though it isn't really my job, sometimes what I do falls into the nebulous catchall category of "provider of common sense." I told them that I strongly suspected even if they refinanced, if they don't fix their current money habits they will be right back where they started a year from now. This originally didn't land well, but as the conversation continued, they seemed to agree: they needed more than a short-term band-aid.

The way we left our chat was threefold. First, they needed to refinance and pay off what they could. I got them in touch with a loan officer, who took their application and is helping them weigh their options. Dana and Kent will still have equity if they go this route, refinance and pay off their debts.

Second, I suggested they search for better paying employment, as it seems to me that might a significant reason their issues are what they are. In fact, I suggested if they didn't feel like improving their primary income, perhaps a second job for both of them for the next few months until they get back on their feet might be something to consider.

And third, I recommended Dave Ramsey. I like his podcasts. I am not a super-big fan of all of his methods, but he gives some pretty reasonable common sense approaches to how to live life within one's means. And if Mr. Ramsey wasn't their cup of tea, look around for other options to learn how to manage their money. Because managing money is actually a learned skill. I was pleased to see Kent spend a moment on Google looking up Dave Ramsey before I left. Hopefully they will get on the right path soon.