Selling your home is a minefield of emotional hazards. Normal reactions can range from “Who needs a cocktail?” edginess to “I don’t know why I’m crying!” hysteria.
The stress, fear and the financial implications can mean seller’s remorse is just a low appraisal away.
First off, know you are not alone. According to Google, more than 4,000 people last year sought help from Google for their seller’s remorse. In a study of Emotions in Real Estate Negotiations, real estate agents reported there were negative emotional reactions in a whopping 88% of negotiations; 82% of those agents said these reaction actually influenced the negotiation process.
Heck, one study of UK home sellers showed that selling a home is considered more stressful than having a baby.
“A home is one of the biggest financial investments most people ever make,” says top 1% real estate agent Brad Korb of Brad Korb Real Estate Group in Los Angeles. “It’s normal to feel anxious. If you weren’t feeling anxious about selling your home, it wouldn’t be normal.”
With all the potential stressors, it’s no surprise some people feel pangs of regret when offers are made, documents are signed and boxes are packed. However, there are actions you can take now to prevent seller’s remorse at closing.
Why is this something you should prepare for?
Because, according to that aforementioned Real Estate Negotiations study, emotional reactions slow down the selling process. Or worse. They can mean backing out of a contract, which can have legal and financial consequences (more about those later).
Or even worse: You feel years of regret.
We want to make selling your home as easy as possible (and help you avoid a life of contrition), so we’ve compiled four ways to prevent seller’s remorse before you meet your wide-eyed buyers face to face at closing.
1. Know Your Real Estate Market
The Vivo Property Buyers study asked buyers about the most important factor in selling their homes. “Getting the highest price” was the No. 1 answer. The second? Selling fast.
These two priorities can often contradict each other, and the study attributes this inherent contrast with at least some of the stress of selling a home. If you want to sell fast, you may not be able to hold out for the highest offer, right?
In some cases, like this one documented in the LA Times, seller’s remorse can happen when the seller puts their home on the market and then realizes — either during or after closing — that they could have made more money. In the example, the seller demanded a larger down payment after the contract was signed. The buyer nicely reminded them of their legally binding contract and then not-so-nicely threatened to sue.
This is why it is so important to know your market: To give you reasonable expectations for what you may get for your home and how fast it may sell.
Remember, no matter what you think your home is worth, the market will dictate the offers you get. Thinking otherwise could be costly.
According to a study in Real Estate Economics, mispricing a listing can cost the seller time and money (and heartache). “Homes with large percentage changes in list price take longer to sell and ultimately sell at lower prices,” it asserts.
You want the list price to be compelling enough to entice multiple offers. According to the National Association of Realtors, if you price a home 10 percent under market value you may just garner the attention of 75 percent of available buyers, compared to 60 percent when you price it at market value (Note: that can often depend on your area).
So how do you price your house right? The penultimate way to find out your home’s value is to ask a real estate agent to run a comparative market analysis, which can help you determine a value for your home based on recently sold comparable properties. Or if you have an affinity for Excel spreadsheets, conduct your own comparative market analysis.
Ask your agent about trends, supply and demand; visit local news sites to read about upcoming developments, community upgrades or quality-of-life projects in your area; and check out resources like Walk Score to learn about your neighborhood’s walkability and transportation rankings. All of these resources can help you get a better idea of your home’s value.
You also might consider making improvements to your house to increase the value of your home, such as upgrading the bathroom or kitchen. However, you should know that not all improvement costs will be recouped; pick your projects carefully. Your agent will have specific suggestions that reflect the needs of buyers and the market you are in.
2. Plan Your Life Beyond Your Home Sale
You put your house on the market, and you quickly receive multiple offers. For most sellers, this is a dream come true. But for those who don’t have life post-sale figured out, this can be a nightmare. Just like this desperate fella, who is among numerous sellers who have posted online similar queries about backing out of a contract because they are not ready to move.
Simply put, seller’s remorse can be triggered by a lack of preparation. And we say it with as little judgement as possible.
We get it. It’s hard out there for a seller. You are focused on finding an agent, making improvements and doing all that market research. You didn’t think you’d need to have every detail mapped out before you put your house on the market. But when you get five offers each asking to close in 30 days, you may start to panic and rethink the whole ordeal.
And a fast sale is not a rare situation. According to the National Realtors Association, U.S. homes are on the market an average of only 34 days, four less than last year.
Unless you have the cash on hand for a down payment, you may have to buy a new home after or at the same time as selling your old home. According to investment site NOLO, you should look at the local housing market to analyze whether you can sell your old home before buying a new one (or visa versa). In a strong market, it says, you may need to start looking for a new home prior to putting your house on the market. In a not-so hot market, you may have a little bit more flexibility.
This is also when you seek support from your real estate agent, who can be an excellent resource for planning life after selling your home. “We always talk to sellers about their plans,” Korb says. “We want to make sure it’s not vague or ambiguous.” That can even mean connecting clients with buyer’s agents in other communities, if they are relocating.
Your agent may also advise you to consider a contingent contract. If your concern is finding a fitting replacement for your home, a contingent contract can give you time to find a new home without an obligation to sell if a new home is not found. Some buyers might agree to an open-ended period, but most will likely prefer to delay closing a specific number of days or until you close on a specific house. Also know that having a contingent contract could deter potential buyers who don’t want to wait around for you to find your dream home; at the very least, it may cause some buyers to hesitate or it could hurt your negotiating power.
Similarly, you might want consider a rent back, which allows a seller to rent the home from the buyer for a certain amount of time after closing. If this is appealing, this piece on rent backs in the Washington Post suggests you purchase renters insurance during your extended stay, document the agreement and be prepared to pay the full amount up front (you may get some back if you leave earlier).
If a buyer doesn’t agree to rent back, you can always find a rental. It’s a short-term option until you close on your new home, helping to relieve some fear and anxiety. Airbnb, known for its vacation rentals, might be a good resource (especially during non-vacation season months). Or try out Apartments.com to look for a sublet.
3. Trust the Right Advisors — Especially Your Real Estate Agent
Your kids don’t want you to sell the house, your neighbor thinks you should have listed at a higher price, and your co-worker says you should have waited until summer.
Everyone has an opinion.
Korb says one of the most common reasons his clients feel seller’s remorse is because of outside opinions. Make sure you talk to key stakeholders (spouse, kids, etc) prior to listing. But once you are under contract, try to avoid commentary from the Monday morning quarterbacks in your life.
However, you should not feel like you are in this alone. Your real estate agent is a little bit therapist, a little bit advisor, a little bit salesperson and a little bit negotiator. Every blog or news story you read on seller’s remorse will advise you to find a sympathetic, compassionate agent.
And research backs it up.
Your real estate agent can have a real influence on your emotions, according to research titled Romancing the Home: Emotions and the Interactional Creation of Demand in the Housing Market by Max Besbris. His research shows that agents really do have an impact on client emotions — from excitement to fear. He found those emotions even influenced clients’ economic decisions.
That means you need to find a real estate agent who understands your pricing concerns, your emotional hang-ups and your connection to your home. Korb says a good agent will help you stay positive and get you excited while also managing your expectations.
Still worried? Here are 7 things you can do to help maximize your partnership with your agent (Hint: It includes lots of communication, being flexible with pricing and improving the smell of your home).
4. It’s OK to Grieve After Selling Your House
It’s inevitable: You are going to say goodbye to this home of yours, this treasure chest of memories. You will say goodbye to the pink walls of your daughter’s room and every scuff on the hardwood, each one a memory.
You feel dread, sadness and a bit of heart break leaving this place, and it feels a bit like losing an old friend.
Selling your home may require some grieving. “Even when you’re moving for positive reasons — a better job, a better house, better schools — moving is a major grief event,” Russell Friedman, executive director of the Grief Recovery Institute, told the Denver Post. Freidman suggests sellers must have a little faith in the unknown, even though human brains crave the familiar.
“It does feel bad when the familiar is missing,” he says. “People want to live on one side of the line, but if you don’t feel sadness, you can’t feel joy.”
There are also ways you can emotionally detach from your house.
Make a few updates
Ask your agent what you can change about your house to help it sell — and then do it. By making a few updates or renovations to your home, you are easing into the reality of selling. Paint that pink wall taupe and redo your floors to cover the wear and tear.
Consider renting it out first
At the same time, don’t ask your buyers to pay for your memories and don’t let your attachment to your home dictate whether you sell or rent it out. If the rental market is thriving, you may want to consider finding renters (Wait, do you really want to be a landlord?). However, if you are renting it out merely so you don’t have to let it go, you may be leaving money on the table.
Focus on the positives
Celebrate your new community, your new home, your better financial situation, your new job, etc. Think about all the reasons you want or need to sell your home, admit the challenges you are facing and recognize how your house is keeping you from meeting your goals or inhibiting your quality of life.
And be honest with yourself that maybe, just maybe, this isn’t the right time to sell.
Because, if you put your house on the market and worry turns to repentance, you may have to back yourself out of a contract. If this is the case, you should be prepared to pay up. Korb says he recently had a seller who changed his plans last minute. The jilted buyers said they understood his situation, but they wanted to be reimbursed for costs, including inspections fees and temporary housing.
“If you are going to back out, you will need to make it a win-win for everyone,” he says.
And some buyers may not let you off the hook so easily.
Plus, let’s face it, backing out of a deal is a massive waste of money, time and energy for all parties involved, especially you. Selling your home should be a positive experience. Yes, it will be difficult. It will be a challenge. Tears will be shed, and goodbyes to empty rooms will be blubbered.
But in the end, change can be a good thing — especially when the selling process is smooth, there is a plan in place, and the tears are kept to a minimum.