Emotional Mistakes Homeowners Make in the Real Estate Market
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By Michael Estrin
Scripps Howard News Service, Bankrate.com, mercurynews.com
Posted: 03/01/2012 04:23:51 PM PST
(Link to the article is HERE)
The greatest hindrance to the sale of a home can be a seller who is seized by emotion.
Home sellers who allow emotions and sentimental attachments to overtake them during the sales process run the risk of making hasty, sometimes poor decisions.
One is to overprice the property. Getting top dollar is the dream of every home seller. But getting a buyer to pay a premium for features that are valuable only to you? That's closer to fantasy, according to Tracie Hamersley, associate broker at Citi Habitats in New York City.
Overpricing often occurs because of emotional reasons," Hamersley says. "So many sellers make the mistake of thinking that their home is special and that a special buyer will pay more because they also fell in love with the property."
The truth is prices have nothing to do with the seller's emotional affinity for the property, and according to Hamersley, it's important sellers understand that as early as possible.
Sellers who bought at the top of the market likely won't see that same price from today's buyers.
"It's a different market," Hamersley explains. "If a seller bought their home during the market's peak, they may have to face the unappealing prospect of losing money on the sale in today's market."
Another common home-seller error is going to a showing. There are a lot of legitimate reasons why a seller might want to be present for the home's showing. But having a seller there tends to
sour the experience for most buyers, according to Renee Weinberg of Petrey Real Estate in Long Beach, N.Y.
"Getting the seller out of the house is key," Weinberg says. "Whenever we take a listing, this is explained in advance."
According to Karyn Anjali Glubis, a real estate broker and owner of The Real Estate Expert in Tampa, Fla., sellers are sensitive when buyers nitpick flaws. "Sellers think that every little thing is a complaint against how they may have maintained a property," Glubis says. The reality is that observations from buyers -- though sometimes harsh -- have nothing to do with the person selling the home.
Having a seller present for an open house or the first (or even second) showing tends to stifle potential buyers from expressing opinions. After hearing negative feedback, some sellers reject offers for emotional reasons, Weinberg says.
Sellers also should be careful not to let their emotions lead them to reject early offers. The longer a property sits on the market, the worse the offers are likely to get, says Nick Jabbour, vice president of Nest Seekers International.
"Once a property is marketed, it will receive the most attention during the first two weeks," Jabbour says. "(The home is) new to the market, and any buyers that have been in the market for a home will see it come up. If it is priced right, an educated buyer, (who has) been in the market for a while (and) sees the home as a fit, will put a serious foot forward."
Sometimes early bids run the risk of spooking sellers who worry they underpriced their properties. But Jabbour says you can tell the property was priced correctly when an early offer is near the asking price, as long as the asking price is in line with the market.
Finally, when you're selling your home it's easy to take everything personally. But doing so is a big mistake, according to Fiona Dogan, a realtor in the Rye, N.Y., office of Julia B. Fee Sotheby's International Realty.
"Sellers need to become emotionally detached very quickly from their homes," Dogan says. "By its very nature, a real estate transaction is aggressive and confrontational since the seller wants the highest price and the buyer wants the lowest."
That negotiation almost always means a buyer will point out every flaw with the property. But while hearing that information may sting a little, it's really a good sign, according to Dogan, because it means the buyer is serious.
Mortgage rates dropped back to record lows this week, despite signs the economy is strengthening.
The 30-year fixed-rate mortgage fell 6 basis points to 4.1 percent. A basis point is one-hundredth of 1 percentage point.
The 15-year fixed-rate fell 3 basis points to 3.35 percent. The average rate for 30-year jumbo mortgages, or generally for those of more than $417,000, fell 2 basis points to 4.63 percent.
The 5/1 ARM fell 8 basis points to 3.04 percent. With a 5/1 ARM, the rate is fixed for five years and adjusted annually thereafter.