Buyer & Seller Tips
Thinking Ahead About “Buyer’s Remorse”
If you are thinking of buying your first home, you should take out a pen and paper right now and draw a line down the center of the paper. Calmly and logically, think of all possible advantages to buying a home and write them down on one side of the page. Afterwards, you should list all the disadvantages.
Then save the list in a place you will be certain to remember.
Of course it sounds silly. Who needs to write down their reasons for buying a home? After all, home ownership is the central theme to living the “American Dream.”
Naturally, while in hot pursuit of this dream you are going to be excited about the future — researching neighborhoods, searching MLS sites on the internet, viewing home buyer’s magazines full of appealing homes that are just “minutes from the beach” with “fantastic views” and “cozy family rooms.”
Next comes the really good stuff – looking at houses. Full of imagination and optimism for the future, you wander about each home envisioning a happy and contented life for you and your family. The first house may be “too big,” and another may be “too small,” but you are certain to find one that seems “just right.” So you make an offer and wait anxiously and excitedly for the counter-offer. Finally, you and the seller agree on terms and you have bought yourself a brand new home!
Congratulations! Break out the champagne and celebrate!
Later that night or perhaps the next day, you start to worry about whether you made the right decision. Doubtful thoughts will intrude. Can you afford it? Is it the right time? Should you have waited? What if you lose your job? What if this happens? What if that happens? Anxiety and stress set in. Sleep may be hours in coming.
This is a normal response to buying a home and is called “Buyer’s Remorse.” You have just made the single biggest purchase you have ever made in your life and it can be downright scary. Logic deserts you. Worry takes over.
Remember your list?
Back when you were thinking semi-logically, you were fairly rational about home ownership. You catalogued the good and the bad, weighed them against each other, and decided that buying a home was the smart thing to do. Reviewing the list will help resolve your buyer’s remorse.
You will not be totally stress-free, but it will help.
Of course, in spite of this advice you will probably not take the time to make that list now – before you buy a home. Hardly anyone ever does.
So when buyer’s remorse sets in and you remember reading this column, here is what you do — get a piece of paper and draw a line down the center. Then…
You know the rest.
At What Price Should I Sell My Home?
Think Like a Buyer
In setting the list price for your home, you should be aware of a buyer’s frame of mind. Based on a list of houses for sale in your neighborhood (which can be in the form of a printed list from us, or online search results that you’ve found yourself), buyers will determine which houses they want to view. Consider the following pricing factors:
- If you set the price too high, your house won’t be picked for viewing, even though it may be much nicer than others in the area. You may have told your REALTOR® to “Bring me any offer. Frankly, I’d take less.” But in that list of houses, yours simply looks too expensive to be considered.
- If you price too low, you’ll short-change yourself. Your house will sell promptly, yes, but before it has time to find the buyer who would have paid more.
NOTE: Never say “asking” price, which implies you don’t expect to get it.
Where to Find Assistance
To determine the proper list price, contact a REALTOR® and have them provide you with the following professional services:
- Furnishing comparable sales.
- Analyzing market conditions.
- Helping to determine offering incentives.
- Estimating your net proceeds.
Using Comparable Sales
No matter how attractive and polished your house, buyers will be comparing its price with everything else on the market. Your best guide is a record of what the buying public has been willing to pay in the past few months for property in your neighborhood like yours.
We can furnish data on sale figures for those “comps”, and analyze them for a suggested listing price. The decision about how much to ask, though, is always yours. The list of comparable sales we bring to you, along with data about other houses in your neighborhood presently on the market, is used for a “Comparative Market Analysis (CMA).” To help in estimating a possible sale price for your house, the analysis will also include data on nearby houses that failed to sell in the past few months, along with their list prices.
Consider Market Conditions
A Comparative Market Analysis (CMA) often includes Days on the Market (DOM) for each comparable house sold. When real estate is booming and prices are rising, houses may sell in a few days. Conversely, when the market slows down, average DOM can run into many months.
We can tell you whether your area is currently a buyer’s market or a seller’s market. In a seller’s market, you can price a bit beyond what you really expect, just to see what the reaction will be. In a buyer’s market, if you really need to sell promptly, offer an attractive bargain price.
Comparative Market Analysis vs. Appraisal
This CMA differs from a formal appraisal in several ways. One major difference is that an appraisal will be based only on past sales. In addition, an appraisal is done for a fee while the CMA is provided by us and may include properties currently listed for sale and those currently pending sale.
In the normal home sale, a CMA is probably enough to let you set a proper price. A formal written appraisal (which may cost a few hundred dollars) can be useful if you have unique property, if there hasn’t been much activity in your area recently, if co-owners disagree about price, and any other circumstance that makes it difficult to put a value on your home.
NOTE: If you do order a market value appraisal, make it clear you don’t need an elaborate, or full narrative report–the kind that’s complete with photos of the house and neighborhood, a map specifying the site, and floor plans is sufficient.