Emotional Mistakes When Selling Your Home

 We all have at one time or another said something in the heat of the moment just to wish we could take those words back.  The truth is that we all commit emotional mistakes in different areas in our lives.  But what about when it comes to selling a home? The stakes are too high to allow yourself and your sale to fall victim to your emotional pitfalls.  Fortunately, what’s predictable is certainly avoidable if you are willing to adjust for your feelings and how they can cloud your decision making abilities.  Do your best to avoid these common decision traps driven by your emotions.

1.  Confusion with Listing Price.  Some sellers are confused about the mechanics of determining fair market value of a home and setting a realistic price. A DFW homes fair market value is determined by what a buyer is willing to pay for it at a given time.  The best way to estimate what a home is worth before it actually sells is to look at what homebuyers have actually paid for very similar homes nearby.  This is what real estate agents call comparables or “comps”.  Most listing agents will do a formal version of this process called a Comparative Market Analysis, and present that to a seller to consider in setting the list price for their own home.  

2.    Stagnation of Price Reduction.  Wikipedia, on the web, defines panic as “a sudden sensation of fear which is so strong as to dominate or prevent reason and logical thinking, replacing it with overwhelming feelings of anxiety and frantic agitation consistent with an animalistic fight or flight reaction.”  In cases where a home has been overpriced, the seller has most often started out overconfident in their home’s value in the current market place.  But as the days on the market turn into weeks, or months, that confidence turns into panic. Unfortunately, this panic is often accompanied by a fear that actually reducing the houses price will actually kick off a free fall in price and elicited low ball offers. This couldn’t be further from the truth. When a house is overpriced, cutting the price is the only way to fix the problem and render the home more attractive to buyers. Some sellers have  found that reducing their price gets them to a sweet spot and then they receive multiple offers and ends up selling somewhere between the reduced price and the original list price. The best way to deactivate this panic is to put a plan in place before it ever arises. Work with your agent to understand how to use the data around how long most homes in your area take to sell as a guidepost for making price reductions, if and when the need arises. 

3.    Ignoring the Needs of Your Buyers.  By virtue of putting your house on the market for sale, you have become a marketer.  Almost every marketer knows that it is essential to understand your buyer’s wants needs and lifestyle in order for them to get top dollar for their house.  It’s up to you, working with your agent, to figure out who the target market for your home is and to market it accordingly. Understanding your target market is one thing but marketing appropriately for them is another. Your townhome buyer might be drawn in by mentions of built in closet organizers, an espresso and coffee machine included in the sale and incentives like HOA dues paid a month in advance. Make sure you mention just how close and convenient the place is to the subway station entrance in your marketing materials.  

4.    Celebrating the Sale.   Multiple offers and above asking sales prices are happening frequently on today’s market, even with all the foreclosures in Dallas.  but it is critical not to assume your home will be in that number until the transaction actually closes. Sellers who celebrate too soon can put themselves at a disadvantage in a number of ways. Even in today’s brisk market transactions sometimes fall out of escrow because a buyer has a change of heart, their job or their family, or because they could not qualify for the mortgage they were pre-approved for. Many sellers keep their houses meticulous and their finances in excellent shape throughout the entire time frame from property preparation through close of escrow. 

With all that said some sellers are so emotional about their plans for the next stage of their life they convince themselves to base the list price for their current home not on its fair market value but base it on how much money they need for their next home purchase. This is the quickest and worst route to pricing your home so high that no one comes to see it and it sits on the market with no offers at all, or very low ones.  Sellers can fight this tendency by staying focused on comparable sales data, and committing to being responsive to market feedback like low buyer traffic or having your home sit on the market for many days beyond the average in your area.