Real Estate: The Emotional Transaction
The act of purchasing and/or selling Real Estate is often referred to as “The Largest Purchases of Your Life” hinting at the heavy weight that it carries financially. But what is often left for one to discover is the emotional impact that this journey can take a person/couple on. Please note, that this journey is not just limited to the individuals that are buyer and selling the property - it also carries a significant emotional heaviness for the Real Estate Agents, Lenders and other entities that may be involved. Here’s how.
Often times a homeowner purchases a home with grand ideas. These ideas may include things such as bringing a child home for the first time, the excitedness of customizing your home intricately to your specific taste, being the first in your family to own your very own home, being a service member or service family that is looking to grow roots in a foreign city, while providing your family with a sense of “home” in-between stations or you may have recognized that homeownership is the key to living the American Dream and have great ideas of selling your home in a few years and netting a certain dollar amount. Whatever the intent may be, it means a great deal to the individual carrying it and whether one realizes it or not, this emotion will forever be embedded within you. Because of this, the journey of buying/selling a home carries a sort of heaviness that comes out while traveling down the buying and selling journey.
To my Sellers: Prior to beginning the process of selling your home, you will need to realize that not everyone shares the same sentiment and value to your home as you do. You may have poured thousands of dollars into your home and its curb appeal in an effort to customize your space to your liking or you may have purchased in one of the most popular subdivisions in your city but own one of the smaller homes on the block. Each of these factors will affect the actual value of your home vs the value that you see in your home.
Upgrades are always a plus and can add value to your home - when done right. When upgrading with the intent of reselling in the future, you not only need to think about your personal enjoyment, but the potential enjoyment of others as well. Painting the walls purple or installing carpets into your bathroom may look nice to you and make you happy, but it will also limit the amount of eyes that you have on your home and stifle your selling timeline. Potential buyers may not see value in these upgrades and in turn this will hurt your bottom line.
As with purchasing the smaller home on the block. Now, there is absolutely nothing wrong with this. I mention it to say, while the home next to yours may have sold for 1.6 million dollars, comparatively your home is 2,500 sq. ft. smaller and will not sell anywhere close to that! Being realistic PRIOR to placing your home on the open market will help all parties involved and alleviate some emotional strain.
Alternatively, to my Buyers: It is important to have an open mind when previewing homes. The paint on the wall may be the ugliest color you’ve ever seen, but at the end of the day, its just paint and paint is not expensive to purchase! Over time you will add your own touches and finishes to your home, so it is important to look at the “potential” in the home vs. the move in readiness of it. Afterall, the fun part truly is making the house YOUR home!
Now, let’s journey to being under contract with a person who absolutely loves your home for what it is worth. There is a process of due diligence that will allow for a buyer to walk away from the deal without penalty, given they did not offer a termination fee (in South Carolina). During this time period, inspections are typically completed to ensure the home is in suitable condition for the potential new owners and with this, negotiations on repairs are brought to the forefront. Sometimes there are minor things that are reported and requested to be fixed, and sometimes there are major/costly issues that are reported and requested to be replaced or repaired. This is a time where emotions can run very high, and in turn can completely kill a deal. Here are a few examples of where lines get blurred and how to combat this in order to get to the finish line:
Buyer is requesting every “little thing” from the inspection report to be repaired by the seller. — I have seen where buyers request every line item from the inspection report be repaired at the sellers’ cost, which can be drive a bit unnerving, given some of the items are of minor consequence and can easily be repaired by a DIY project on the buyers’ part. Having said this, as a seller, it could also be taken care of as a DIY project on your part as well, vs. the daunting feeling of needing to outsource the project at an outrageous price point. Additionally, this period is generally called the negotiation period for a reason. Some sellers go into negotiations with the mindset of “I’m not fixing anything” and honestly, this is fine… if you are willing to sell your home at a reduced price. If you’re not, you will need to be open minded to repair requests.
It is absolutely OK to tell the buyer NO to somethings, but it is also essential to not become defensive when the repair addendum comes over because you believe that “people are just trying to get money out of you” (not discounting the actuality of this) or “nothing is wrong with your house” because there is always going to be wear and tear on anything that is man made. Instead, work with your agent and be creative with your responses.
Seller is refusing to fix everything. — When sending over your repair request addendum you can take 1 of 3 avenues. #1. Ask for everything and expect little to nothing. This will eliminate hurt feelings when the seller says “absolutely NOT!” and will allow for negotiations to begin. #2. Be realistic about the things that you actually NEED for the seller to replace/repair. #3. Ask for nothing at all. If you are purchasing a resale home, realize that the home is going to be imperfect, but it is also going to have charm. If there are items on the inspection report labeled anything less than “marginal” or “high priority,” talk things over with your spouse and/or your agent. If you really love the house and you know that there are items on the report that are of small consequence and will not lead to a huge issue in the foreseeable future, move beyond them and make a calculated offer. If the seller refuses the items that are important to you, then it is time for you to choose whether you want to actually purchase the home or move on to something else.
Outside of the due diligence period there are additional situations that can cause uneasiness in the transaction. Here are a few:
The buyer’s financing is taking a little longer to clear and they ask for an extension of contract. I’ve seen sellers jump ship prematurely because of this. And let’s be honest, this is a very scary place to be in, especially if you are depending on the funds in order to close on a home that you are simultaneously purchasing. In order to combat a failed transaction, it is important that everyone in the transaction is communicating explicitly throughout. If you are the seller, ensure your agent is providing you with weekly updates at minimum. This can help with combating preventable & foreseeable issues.
Seller fails to repair the agreed upon repairs in a timely manner. Alway get a reinspection completed prior to closing to ensure the seller held up their end of the bargain. If they fail to do so, they will be in breach of the contract and you can walk away from the deal, ask for a concession or ensure that they replace/repair the agreed upon repairs.
The appraisal came in lower or higher than the agreed upon purchase price. With this, you can see the seller requesting that the buyer come up to meet the new appraised value or pay the difference between the agreed purchase price and the lowed appraised value. As the buyer, you are not held to either of these unless it was previously written into the ratified contract. Depending on your loan type (VA/FHA), you may be required to come down to the appraised value, but never UP. Speak with your agent about the best way to proceed if this does ever become an issue.
In summary, buying and selling a home is a profoundly emotional journey that goes beyond mere bricks and mortar. It's about finding a place where one can truly belong, realizing dreams, and creating a haven of stability and memories. As real estate agents, we understand the significance of these emotions and strive to guide our clients through the process with empathy, sensitivity, and expertise.
