A few weeks ago, I spent several days at my second home in Minnesota. I look forward to these monthly “forced vacations” where I combine business and pleasure. Of course, I always check up on the local real estate market conditions.
On my most recent Minnesota visit, at Southdale (the nation’s first enclosed indoor shopping mall), I unexpectedly encountered a high school classmate (actually a high school sweetheart, but that’s another story).
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After all these years, I’m surprised we recognized each other. Of course, I hadn’t changed a bit. Then I said “Bring me up to date on what’s happening in your life.”
Knowing I write about real estate, she “unloaded” she and her husband decided to sell their longtime home and how it is turning out to be the biggest mistake of their lives. Fortunately, we found a convenient bench to discuss this real estate crisis.
HOME-SALE TAX-FREE PROFIT DOESN’T LOOK SO EXCITING. Then she explained how they decided to sell their home because (1) the local home sale market was very good, (2) how much their home had appreciated in market value, (3) how their home sold in less than 30 days, and (4) their home-sale profit up to $500,000 is tax-free.
But then she emphasized all the good memories of their home suddenly, without warning, popped into their minds after they signed the sales contract but before the sale has closed. Their two children are now grown and happily married, but they still enjoy “coming home” to where they grew up.
Apparently, the two adult children are opposed to the home sale although their parents plan to move to an elegant rental retirement apartment residence. They will now have sufficient cash to travel and perhaps buy or rent a second home in a warmer winter area, such as Florida or Arizona.
HOME SELLER’S REMORSE STRIKES. “What should we do?” That was the unexpected question I was asked by my high school classmate.
Thinking fast and putting on my real estate broker’s hat, I politely repeated all the reasons why my friend and her husband had decided to sell their home.
Then I asked, now that you have sold your home (although the sale has not yet closed), is there any valid reason for not closing the sale of your home?
She said the only reason is their children object because they won’t have a place to call “home.”
Then I shared my story of how my parents sold the home where I grew up while I was away at Northwestern University. At first, I objected. But then I realized their home sale was what they wanted, they gained financial freedom they never had before, and their home sale financed their comfortable retirement.
ROLE OF THE REAL ESTATE AGENT IN SELLER’S REMORSE. Ask any experienced real estate agent to regale you with stories of home seller’s remorse and how the agent saved those sales. That’s what a sharp realty agent should do.
The role of a savvy real estate agent is to counsel their home seller who wants to cancel a home sale. It happens quite frequently.
A very effective way to do this is to take a blank piece of paper and draw a line down the middle. On one side of the paper, a sharp realty agent will ask their home seller to list all the reasons they wanted to sell their house or condo when they listed it for sale. Of course, the listing agent can “suggest” motivations. On the other side of the paper, the seller’s listing agent should ask for any important reasons why the seller should not sell the home.
This list will usually be very short. The result: seller’s remorse disease is quickly cured when the seller is reminded of the overwhelming advantages of the sale.
POSSIBLE RESULTS IF HOME SELLER REFUSES TO SELL. As a long-time real estate investor, I can only recall one time when I encountered a seller with a severe case of “home seller’s remorse” disease.
I was the buyer. We had a firm purchase contract with no loopholes. The seller’s listing agent phoned my buyer’s agent to state the sellers thought I should increase my 10 percent cash down payment (the sellers had agreed to carry back a 90 percent mortgage).
With my buyer agent’s approval, I phoned the listing agent. I politely emphasized that if his sellers didn’t deliver their signed deed on the closing date on the original terms, I would have no alternative but to (1) sue for specific performance of the sales contract and (2) record a “lis pendens” against the property title to effectively prevent a sale or refinancing of the property.
Within a few hours, the listing agent phoned me to sheepishly report his sellers had agreed they would sign the deed and the sale would close on schedule.
This example shows why home buyers (and their real estate agents) should not hesitate to enforce their legal rights when the home seller contracts a case of seller’s remorse disease and either tries to back out or change the sale terms.
Often, just a polite reminder of the home buyer’s extremely effective legal remedy of a specific performance lawsuit to enforce the sales contract, plus recording a “lis pendens” against the property title, is sufficient to quickly cure the home seller’s remorse malady. For more details, please consult a local real estate attorney.
(For more information on Bob Bruss publications, visit his
Real Estate Center).
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