5 Emotional Mistakes Made by Sellers

Fortunately, when it comes to emotion, what’s predictable is avoidable if you’re willing to acknowledge and correct for your own feelings and how they can foul up your decision-making. This list will help you predict - and hopefully avoid - some common decision traps driven by emotions.

1. Price reduction paralysis. Wikipedia defines panic as “a sudden sensation of fear which is so strong as to dominate or prevent reason and logical thinking.”  In cases of overpricing, the seller has most often started out as overconfident in their home’s prospects on the current market.  When a home is dramatically overpriced, cutting the price is the only way to fix the scenario and render the home more compelling to buyers.  Work with your agent to understand how to use the data around how long most homes in your area take to sell as a guidepost for making price reductions, if and when the need arises.

2. Excessive attachment. Yes, this is the place your kid took her first steps or the place you carried your bride over the threshold. But at the time you make a decision to sell it, your home becomes an asset, that like any other good you would sell in the course of business, this asset must be marketed and priced and transacted for.

Sellers who are excessively attached to a home are likely to:

• overprice it
• ignore market data, like the recent sales prices of comparable homes nearby
• disregard their agent’s staging advice
• improperly prepare their home for the market, failing to update or neutralize the decor
• be irrational in negotiations around price or repairs

Buyers don’t know the emotional value your home holds for you, nor do they care.  If you truly want to sell it, you must release yourself from your emotional attachment.

3. Ignoring the needs of your target audience. Every marketer knows that it’s essential to understand your target buyer’s wants, needs and lifestyle in order to get top dollar for your product (that’s your home).  It’s up to you - working with your agent - to figure out who the target market for your home is and to market it accordingly.  Understanding your target market is one thing - marketing appropriately for them is another.


4. Celebrating too soon.  Multiple offers and above-asking sales prices can happen in today’s market, but it’s critical not to assume your home will be in that number until a deal is actually closed.  Sellers who “celebrate too soon” can put themselves at a disadvantage in a number of ways by:

·       Overpricing their homes, assuming the demand-supply imbalance will automatically swing in their favor

·        Getting sloppy in how they maintain their homes on a daily basis, while they are still on the market

• Making large purchases or spending their house proceeds “in advance,” while the buyer’s loan and inspections are still pending.

Even on today’s market, deals sometimes fall out of escrow because a buyer has a change in their life, their job or their family, or because they simply turn out not to qualify for the loan they were pre-approved to receive. Smart sellers stay vigilant and keep their houses meticulous and their finances in good shape from property preparation through close of escrow.

5. Price confusion. Some sellers have a confused understanding of the mechanics of determining the fair market value of a home and setting a list price.   A home’s fair market value is defined by what a qualified buyer will pay for it at a given moment in time. The best way to estimate or approximate that for a home before it is actually sold is to look at what qualified buyers have actually paid for very similar nearby homes, as recently as possible. This is what agents call looking at the comparables in a Comparative Market Analysis.

If a home is more or less upgraded, spacious or well-located than the comps, or if the market has moved up or down since the time the comps were sold, it might warrant listing the property at a price higher or lower than the comps indicate.  The biggest mistake a seller can make is pricing your home so high that no one comes to see it and it lags on the market. Smart sellers use comparable sales data and their agent’s advice when pricing their home.