A few weeks ago I received an unsolicited cash offer to sellmy second-home condominium, which I have owned about 15 years. In the lastyear, I have used it less and less so this surprise purchase offer at a veryfair price received my careful consideration.
As I often do when making major decisions, I got out a sheetof paper and drew a line down the middle. This is called the “Ben FranklinDecision Method.” I don’t know if that genius originated the idea, butI’ll give him the credit.
Purchase Bob Bruss reports online.
At the top of the left side, I wrote “Reasons toSell.” On the top of the right side I wrote “Reasons Not toSell.” I came up with five or six reasons on both sides.
The next morning I wrote down a few more reasons on eachside. By the end of the weekend, although there were more reasons to sell thannot to sell, I decided to keep the condo and not sell. That simple exerciseprobably prevented my contracting “seller’s remorse.”
HOW TO PREVENT “SELLER’S REMORSE” DISEASE. Ask anyexperienced real estate agent and he or she can probably regale you withstories of their home sellers who changed their minds about selling. As abuyer, having encountered several of these sellers who suffered “seller’sremorse,” I know how frustrating this disease can be.
Smart real estate agents, before taking a listing to sell ahome, can head off this potential problem by asking why the seller wants tosell. When a seller states a valid reason, such as a job transfer, moving up ordown to a larger or smaller home, divorce, financial problems, moving closer torelatives, or pending foreclosure, the seller’s remorse disease is not likelyto strike after the seller accepts a buyer’s purchase offer.
However, when the seller states an indefinite reason such as”testing the market,” wanting to move to a better neighborhood,moving from a house to a condo, or wanting a newer home, experienced realestate agents know “seller’s remorse” disease might easily strikebecause the seller is not highly motivated to sell.
Not until after the seller accepts a purchase offer does thereality set in when the seller asks, “Where am I going to move?”
When I see an MLS (multiple listing service) listing thatsays in the “remarks” section, “Subject to seller finding anacceptable home to purchase,” I know that is a potential seller’s remorsecase waiting to happen.
For example, years ago my parents hired a contractor tobuild a new house for them. I suspect I was the cause of their desire for alarger home because a few months after they moved in, I was born.
Several times my mother told me the story of how the Realtorthey hired to sell their old home worked too fast and quickly found a buyer.They weren’t ready to move yet. But they had to move out of their old homebefore the new house was finished. As a result, they spent several monthsliving in a residence hotel. Fortunately, their new house was finished before Iarrived so I wasn’t born in a hotel room.
TWO SITUATIONS WHEN HOME SELLER REMORSE STRIKES. Thereare two primary circumstances when home seller remorse is most likely tostrike:
1. Longtime homeowners are likely to incur this diseaseshortly after listing their house or condo on the market for sale. Toillustrate, just a few days ago, I met an elderly lady who was going throughher scrapbook as she was cleaning out her house in preparation to move to anassisted-living residence. As she threw away the yellowed newspaper clippings,she told me that only 10 percent of the clippings were worth saving.
Unlike that woman who seemed highly motivated to move on,many home sellers often incur second thoughts as they prepare for the sale,such as by cleaning out closets and throwing away years of memories.
The best thing the seller can do at this point, if theseller isn’t highly motivated, is to cancel the listing. Smart realty agentswillingly cancel a listing if the seller asks because it is a waste of time towork with an uncooperative seller.
2. The second and most common situation where home seller’sremorse strikes occurs shortly after the home seller accepts a buyer’s purchaseoffer. This is the moment when the home seller understands it’s time to moveout and he or she realizes the “old home” is pretty nice after all.
The 30- to 60-day “escrow period” after the selleraccepts the buyer’s purchase offer is the critical time when the home seller ismost likely to consider not selling. The reason is sellers start thinking aboutall the wonderful memories enjoyed in their home or how they will never be ableto find another residence as nice.
The seller’s listing agent, at this point, has to doeverything possible to hold the sale together. A friendly reminder to theseller about all the sales benefits, such as the $250,000 (or $500,000 formarried couples) tax-free principal-residence-sale tax break, moving to a newlocation, or whatever the seller said his/her motivation might be.
ADVERSE CONSEQUENCES OF HOME SELLER’S REMORSE. As alast resort, if the listing agent is not successful overcoming seller’s remorseand the seller wants to cancel the sale, it’s time for the listing agent tobring out the legal remedy.
“I’ve changed my mind and I don’t want to sell my home.Give the buyer their deposit back. I’m not moving.” Those are the worstwords a listing agent can hear.
The listing agent’s solution is to politely inform the homeseller of the possible legal consequences of a breach of the sales contract. Ina nutshell, if the buyer really wants the home, the buyer can bring a”specific performance lawsuit” to force the seller to complete thesale on the terms agreed in the signed sales contract.
To make matters worse for the seller, a savvy buyer’s lawyerwill usually record a “lis pendens” against the title to prevent theseller from selling to another buyer or even refinancing the property. Thelegal reason is every property is unique so monetary damages are not an adequateremedy for the buyer if the seller breaches the sales contract.
Just in case seller’s remorse disease strikes, both listingagents and home buyers should understand the possible consequences of aspecific performance lawsuit to enforce the sales contract. For more details onthe possible adverse results of breach of contract by either the home seller orbuyer, please consult a local real estate attorney.
(For more information on Bob Bruss publications, visit his
Real Estate Center).
Copyright 2006 Inman News