A few weeks ago I received an unsolicited cash offer to sell my second-home condominium, which I have owned about 15 years. In the last year, I have used it less and less so this surprise purchase offer at a very fair price received my careful consideration.
As I often do when making major decisions, I got out a sheet of paper and drew a line down the middle. This is called the “Ben Franklin Decision Method.” I don’t know if that genius originated the idea, but I’ll give him the credit.
Purchase Bob Bruss reports online.
At the top of the left side, I wrote “Reasons to Sell.” On the top of the right side I wrote “Reasons Not to Sell.” I came up with five or six reasons on both sides.
The next morning I wrote down a few more reasons on each side. By the end of the weekend, although there were more reasons to sell than not to sell, I decided to keep the condo and not sell. That simple exercise probably prevented my contracting “seller’s remorse.”
HOW TO PREVENT “SELLER’S REMORSE” DISEASE. Ask any experienced real estate agent and he or she can probably regale you with stories of their home sellers who changed their minds about selling. As a buyer, having encountered several of these sellers who suffered “seller’s remorse,” I know how frustrating this disease can be.
Smart real estate agents, before taking a listing to sell a home, can head off this potential problem by asking why the seller wants to sell. When a seller states a valid reason, such as a job transfer, moving up or down to a larger or smaller home, divorce, financial problems, moving closer to relatives, or pending foreclosure, the seller’s remorse disease is not likely to 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 real estate agents know “seller’s remorse” disease might easily strike because the seller is not highly motivated to sell.
Not until after the seller accepts a purchase offer does the reality set in when the seller asks, “Where am I going to move?”
When I see an MLS (multiple listing service) listing that says in the “remarks” section, “Subject to seller finding an acceptable home to purchase,” I know that is a potential seller’s remorse case waiting to happen.
For example, years ago my parents hired a contractor to build a new house for them. I suspect I was the cause of their desire for a larger home because a few months after they moved in, I was born.
Several times my mother told me the story of how the Realtor they 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 home before the new house was finished. As a result, they spent several months living in a residence hotel. Fortunately, their new house was finished before I arrived so I wasn’t born in a hotel room.
TWO SITUATIONS WHEN HOME SELLER REMORSE STRIKES. There are two primary circumstances when home seller remorse is most likely to strike:
1. Longtime homeowners are likely to incur this disease shortly after listing their house or condo on the market for sale. To illustrate, just a few days ago, I met an elderly lady who was going through her scrapbook as she was cleaning out her house in preparation to move to an assisted-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 the seller isn’t highly motivated, is to cancel the listing. Smart realty agents willingly cancel a listing if the seller asks because it is a waste of time to work with an uncooperative seller.
2. The second and most common situation where home seller’s remorse strikes occurs shortly after the home seller accepts a buyer’s purchase offer. This is the moment when the home seller understands it’s time to move out and he or she realizes the “old home” is pretty nice after all.
The 30- to 60-day “escrow period” after the seller accepts the buyer’s purchase offer is the critical time when the home seller is most likely to consider not selling. The reason is sellers start thinking about all the wonderful memories enjoyed in their home or how they will never be able to find another residence as nice.
The seller’s listing agent, at this point, has to do everything possible to hold the sale together. A friendly reminder to the seller about all the sales benefits, such as the $250,000 (or $500,000 for married couples) tax-free principal-residence-sale tax break, moving to a new location, or whatever the seller said his/her motivation might be.
ADVERSE CONSEQUENCES OF HOME SELLER’S REMORSE. As a last resort, if the listing agent is not successful overcoming seller’s remorse and the seller wants to cancel the sale, it’s time for the listing agent to bring 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 worst words a listing agent can hear.
The listing agent’s solution is to politely inform the home seller of the possible legal consequences of a breach of the sales contract. In a nutshell, if the buyer really wants the home, the buyer can bring a “specific performance lawsuit” to force the seller to complete the sale on the terms agreed in the signed sales contract.
To make matters worse for the seller, a savvy buyer’s lawyer will usually record a “lis pendens” against the title to prevent the seller from selling to another buyer or even refinancing the property. The legal reason is every property is unique so monetary damages are not an adequate remedy for the buyer if the seller breaches the sales contract.
Just in case seller’s remorse disease strikes, both listing agents and home buyers should understand the possible consequences of a specific performance lawsuit to enforce the sales contract. For more details on the possible adverse results of breach of contract by either the home seller or buyer, please consult a local real estate attorney.
(For more information on Bob Bruss publications, visit his
Real Estate Center).
