1. Your Home May Not Be Worth What You Think
The biggest shock most sellers face is the true value of their homes, either determined by one or more agents in comparable market analysis reports or through actual offers from buyers. Sometimes sellers can be pleasantly surprised when houses go up 20% in value in two years as in some parts of California, Texas and other parts of the country. But most sellers find that their homes are not made of gold like they wish. The reality is that markets change, and home values rise and fall. Many factors affect home values and most of them are subjective and hard to measure. Sometimes you may see no difference between your home and others on the market, and it is hard to understand why your home may appear to be less valuable. Harder to understand is why improvements you may have made do not seem to raise the value of your home. Also irrelevant is what you paid for the home, and what you need the home’s price to yield so you can pay debts or buy another property. Many people believe their home should pay off like a securities investment.
Historically home values have barely kept pace with inflation – that is why they are a place to live, not an investment. But many people believe that when you spend that much money, you ought to be making money on your home. The economic reality says otherwise, because homes depreciate even while they gain in value. Buyers will determine the true worth of your
home, in this market, at this time, and what your home is worth right now may be very different than what it was worth three months ago or what it will be worth six months from now. All you can do with your agent is determine an asking price based on comparables, square footage, condition, and other factors, and see what the market will bear.
2. People Won’t Love Your Home Like You Do
You love your home and fully expect others to appreciate the same qualities in it that you do, but buyers have their own lifestyles, preferences, tastes and attitudes. The chances of finding a buyer who will want your home “as is” are slim to none. In fact, buyers will look at your home with an eye to how they can make it their own. Then they will love it the way you do. But first, they may knock out that wall where you have your prize fish tank, tear down that designer wallpaper you had imported from England and gut the kitchen where you spent so many Thanksgivings preparing dinner. All those changes cost money, so they will value your home less while they consider remodeling and decorating costs It will hurt your feelings that the buyer will find every little flaw possible with the home and use that knowledge to negotiate the home’s price downward. Don’t let yourself think that what was good enough for you and your family should be good enough for the buyer. But keep in mind, that selling a home can be fiercely competitive. Your home is competing against new homes, homes that have already been updated, and homes that offer unique features that your home doesn’t. Your home has to withstand the glare of scrutiny. So, keep your cool. It’s just business, not personal. You weren’t going to take that wallpaper with you anyway.
3. Sooner Or Later You Will Lose Your Temper
Your relationship with your buyer will be one of love/hate. The buyer is an adversary because s/he wants to pay the least for your home, while you want to net the most possible. The buyer, in order to improve bargaining leverage, may pick your home apart. Many of the buyer’s complaints and requests for repairs will be legitimate, but some may not. In fact, some requests can be outrageous. It’s your job to stay focused on the ball. If you don’t want to comply with the buyer’s wishes, you don’t have to. You can draw the line, and have your agent tell their agent to tell them to get real. But, the bottom line is that the buyer brings the money to the table. No transaction can take place without one so letting tempers flare only gets you further from your goal. The buyer has pride, too, and doesn’t want to lose face any more than you do. But anyone who can’t be reasonable because they have let angry feelings get in the way isn’t going to be making any deals happen. You may get angry at your Realtor, too. But if your agent is a pro, they will be able to handle your concerns. Just know that some things, like other people’s behavior are simply out of your Realtor’s control.
4. Unexpected Showings.
Buyers aren’t going to operate on your schedule. When your home is put on the market, you won’t have just your own Realtor showing your home, you may have dozens of Realtors and their clients wanting to see the home at almost anytime of the day or evening. You may feel like fair game when buyers show up at your home without an appointment or ahead of their Realtors and ask to see your home. Don’t let them in no matter what they say. There is no reason for an unaccompanied buyer to be in your home for any reason. Just say no. Your Realtor will ask you to keep your home in show condition, which is not easy. People will break appointments, ask to reschedule and there are only so many times a week you can buff those hardwoods. Be flexible, and trust that every buyer who enters your home, regardless of whether they saw your laundry on the floor, is a potential buyer.
5. Buyer rudeness
Everyday, we each experience rudeness in society. People don’t RSVP in time for the party, they don’t write thank you notes anymore, they get in the express line with at least 20 items, and they are turning road rage into a national pastime. So why be surprised when buyers visit your home and leave their sweaty McDonald’s cup on your coffee table? Or leave the cabinets and closet doors open wherever they looked? Or miss their appointment altogether, expecting you to reschedule at a moment’s notice? As tempting as it may be to play Miss Manners, it’s not worth passing up a good offer because the buyer left a dirty diaper in your trash bin.
Inspections kill more deals than any other single factor besides overpricing. All older homes have some minor and some major problems. These can either be addressed in the sales price of the home, or as a negotiation with the buyer under contract. And it is a matter of opinion how seriously the buyer will take some problems over others. Although the inspection is typically an expense on the buyer’s side of the ledger, sellers can avoid a lot of heartache by hiring an inspector themselves before listing their homes. The inspector should reveal what the buyer’s inspector will find, giving you the knowledge you need to fix problems that must be fixed, price the home more competitively with your agent and give you maneuverability in negotiations with the buyer. A buyer who sees a favorable inspection report is more likely to make a fair offer, and less likely to bargain hunt or place a lot of contingencies in the contract. If you don’t choose to have your home inspected, be prepared to be surprised with some repair expenses or face a price reduction if you want to keep the deal going.
7. Last Minute Problems That Delay Closing
Service providers, from lenders to inspectors to closing agents, may cause problems, sometimes without meaning to. In some areas, closings are happening at such a rate that all service providers associated with the real estate transaction are on overload. Lenders may wait until the day before closing to appraise your home. Title insurers, dispatched at the last minute, may find an area of dispute in your survey. The plumber who was going to replace your shower pan in time for final walk-through is called out of town and can’t do the job. Any of these scenarios and many others may cause closing to be delayed by days or even weeks. Expect people to be late, unprepared, or to not show up at all. Try to schedule repair people, appraisers and closing agents any time but peak periods. Your closing will go much more smoothly if you close during the first of the month rather than at the end with everyone else. A lot of other things can go wrong, too.
Your sprinkler system could go off and soak the buyer. You dog may get loose and bite your buyer’s agent on the ankle. A storm could take your roof off an hour before closing. Whatever happens, you can prevent a lot of problems in advance, and handle the unexpected ones with a good sense of humor.
Be prepared for anything and everything. Listen to your Realtor. You’re paying for good advice. Take it.