Unchecked, emotion can ruin a home sale. Buying or selling a home is a business transaction, often the largest financial transaction someone makes. Of course for both parties, emotion is a major factor. Buyers must like the home they purchase and connect with it. Sellers must deal with a steady stream of people judging their castle, starting with buyers and including many others along the way.
Emotions typically run the highest during negotiation. We have the market “judging” the seller’s home and a buyer assigning a value to it. That value may not be what the seller feels is appropriate. After all, this is their home; they’ve done this and that to it and it’s the best home in the area. Buyers typically look for the best price possible; sellers don’t see it the same way. Conversely, in a very active market the buyers may be forced to pay more than desired to beat others. The key is to understand the market and (as much as possible) consider the home a widget. For each side; does the deal make sense? Is this a good business decision? In the end, while it might not be perfect, does it work?
Emotion Can Ruin a Home Sale – Home Inspections
Behind the contract negotiations, the next most difficult part of a transaction tends to be the inspection process. Buyers want a professional, impartial opinion of the home. An inspection is not an appraisal; both are key players but have completely different roles. Every home has issues and inspectors are paid to find them. Sellers have maintained the home perfectly, the idea that this inspector will say otherwise is blasphemy. Buyers often attend inspections as this allows them a chance to walk the home and ask questions. Sellers should not be present; while many think they’ll “explain” things to the inspector, many times they just end up at odds over things. Present or not, almost every seller will have the same initial reaction to the inspection report; “that’s nonsense!”. Buyers should stick to safety and code issues; sellers should accept that even though their home is perfect, work may be required.
Emotion Can Ruin a Home Sale – Inspection Resolution
Buying or selling a home (some folks do both simultaneously) is an emotional process. How well those emotions are regulated will go a long way towards the success of a deal. As much as possible, the best experience results when everyone treats the transaction as business.
Every buyer wants a perfectly maintained home and every seller has a perfectly maintained home. In the real world, that’s not the case and buyers typically ask for repairs to be made. This is another round of negotiation, again the key for both sides is a pragmatic and business-like approach.
Buyers need to understand that no home is perfect and that every home requires something; be reasonable with the request for repairs. Sellers need to understand the same thing and be open to considering what’s requested. Many agents prefer to determine a price reduction; this is the simplest and cleanest way to resolve this phase.
If the seller agrees to address items on the inspection report, they should be properly completed according to the terms agreed upon. If the agreement calls for professionals to do the work, it should not be done by the owner. If the agreement calls for A, B, C and D to be done, all should be done. Time frames in the agreement must be adhered to. Unilaterally deciding to change the terms or not doing something, no matter the reason, is unwise and breaks the contractual obligation of the seller. The contract is a legal binding document.
Emotion Can Ruin a Home Sale – Appraisal Issues
While not always a problem, an appraisal below contract price provides a great opportunity to ruin a deal. A “low” appraisal typically detonates the seller; “How can the appraiser kill the deal, the seller is willing to pay the price”? Appraisals are not rubber stamps for transactions, appraiser work solely for the lender and follow strict guidelines. If the appraisal comes in low the deal is not always doomed, the best case scenario is buyer and seller working out the challenge. That’s not always the case and if the seller is unwilling to consider an adjustment, the buyer can terminate the deal without penalty. Sellers beware: having a failed contract and the home coming back on the market isn’t a good look – to future buyers, agents or the next appraiser. Why did that deal terminate? Is the home really worth it? It’s best to find the happy medium and close the deal.
Keep Emotions in Check, Close the Deal
It’s hard, but keep the transaction all business. Don’t let emotion ruin a home sale. For buyers that means a systematic and well organized approach. Become familiar with areas, know what you want, understand pricing trends and mortgage options. For sellers, the home is now a widget. It is one of many and will be judged against comparable listings and sales in the local area. It’s imperative that each party research and work with experienced professionals; lean on them as they’ve been through hundreds of deals. Quality agents make real estate transactions look boring and easy. The proper mindset is the foundation for a success.