The experience of buying or selling a home can bring unexpected strong feelings, often unrecognized, … [+]
Every residential real estate transaction, whether on the buy-side or the sell-side, involves different components unfolding at different rates. While much has been written about the hard facts of interest rates, inventory fluctuations, and the importance of proper pricing, far less attention is paid to the equally important (but less easy to quantify) “soft” impediments that buyers and sellers frequently experience. As these buyers and sellers go through the multiple decisions that comprise the transactional process, experienced agents can provide guidance and support for them in acknowledging these less visible challenges.
Among the most significant are:
1. The Psychological Transition From A Homeowner Mentality To A Home Seller Mentality
Even when a seller is committed to selling, the conceptual process required to morph a home into a product is challenging. A home often looks quite different from a sales product, which is what any house or apartment becomes as soon as it is placed on the market. The product is designed to attract the broadest number of potential purchasers. Orange or magenta walls, triple layers of drapes, tchotchkes everywhere: these may be the beloved attributes of the seller’s home. But all of that has to go when the place becomes a product. This often takes a big emotional toll on the seller, whose taste and design scheme can become deeply embedded into their psychic sense of self. The process can involve anger, grief, and an adjustment period before the seller lets these feelings go enough to allow the needed transmutation to occur.
2. The Misaligned Sense Of Value Between A Buyer And A Seller
Psychologists are extremely familiar with the all-too-human phenomenon known as the “endowment effect.” This condition reflects the tendency to overvalue the thing one owns while concurrently undervaluing the thing one’s neighbor owns. Agents see this all the time in the real estate business. While there are certainly many incidences of a seller overpricing, there are as many in which a buyer undervalues a property they want to bid on. Each of the two is certain that they are correct. The seller has overvalued their home (because it is theirs), while the buyer has undervalued the home for the same reason in reverse because it is not theirs. Using comps and sometimes even a hard line to persuade both sides that the truth lies somewhere in between can be a difficult and intensive job for the agents.
3. The Impossible, The Possible And The Process
Every agent has stories about a buyer who, after rejecting several highly suitable properties early in their search, purchases a paler facsimile of those early wins six months and 30 property viewings later. Similarly, every agent has a seller who assures their agent that they are a rational decision-maker, then turns down excellent offers early on only to settle for less, and sometimes considerably less, months or even years later. Such clients, hoping unconsciously for the impossible, reject the possible as being not good enough. It can require many months to become grounded in reality before these clients are able to make a good decision. The challenge of aligning reality with expectation can take a long time.
4. Alignment
Agents can often help their clients by advising them to create a priority-of-needs list. Sometimes, this list creation and subsequent revision is part of the unfolding process described above. Even then, the agent must be attentive to subtle clues that demonstrate that the client’s stated goals don’t always align perfectly with their unstated desires. Is location really the most important thing for this buyer? Or can they be more flexible about that if the size and beauty of the home, or the view from the windows, exceeds expectations? Does a seller care most about money, timing, or a good feeling about the buyer who will be taking over their home? What people say they want and what they really want are not always exactly the same. Only when both are understood and acknowledged can the most suitable property be found.
Don’t Let Unseen Issues Crater The Deal
The experience of buying or selling a home can bring unexpected strong feelings, often unrecognized, to the surface. These feelings can easily become deal impediments if they remain unacknowledged. We all struggle in many parts of our lives with unrealistic expectations. Real estate transactions, so enormous in their financial impact for both parties, can surface these expectations in surprising ways. Buyers, sellers, and agents should do everything they can to keep these non-concrete but nonetheless vivid issues in their dialogue as they proceed through their real estate transaction. Otherwise, the unseen issues can easily crater the deal!