them. If he defaults, I will have to go through the considerable expense, time, and headaches of foreclosure, which could take months (or years, depending upon the state). Once foreclosure is complete, who knows how much damage Mr. Jones might have done to the house. It's not uncommon for those who lose their homes in foreclosure to be angry and deliberately damage the house. I have known of foreclosed homeowners who poured concrete down the toilets before they were evicted, and you can imagine how much it costs to repair something like that. I calculate for the worst- case scenario to make repairs on the

house once foreclosure is done. If you were Mr. Smith, would you rather have $8,000 now, or hope Mr. Jones sends you $132.15 every month for the next 10 years and have to deal with it if he doesn't? Here's another way to illustrate the point to Mr. Smith: You put a twenty-dollar bill and a hundred-dollar bill on the table and say, “Suppose I offered you the choice of this twenty or this hundred. Of course, you would take the hun- dred. But what if I told you that I will give you the twenty right now or give you the hundred six months from now – which would you choose?"

If Mr. Smith is like most people, he will choose to wait six months to take the $100. You then make the same offer, except you increase the time when you will give him the $100 from six months to a year and ask him which he will choose. If he still says he will wait, increase the time to two years, three years and so on. At some point, he will choose to take the $20. That's when you say: "Mr. Smith, you have just told me that 20 dollars now is more valu- able to you than the promise of 100 dollars two years from now" (or whatever period of time he chose).

thinkrealty . com | 65

Made with FlippingBook Online newsletter