Peggy Chirico ~ Hartford & Tolland County Real Estate Blog: I'm Not Going to Give My House Away!

I'm not going to give my house away!

If I had a dollar for every time a potential seller told me that, I'd have my own island in the Caribbean by now!   But after hearing it so often, I began to wonder what was behind it.  After all, for every seller who wasn't going to give his house away, there was a seller who paid attention to market data, priced his home accordingly, and accepted a reasonable offer.  So what's the difference?

Sure, some sellers are just unreasonable and unmotivated. They say things like:

• I don't have to sell now!
• I just want to test the waters.
• Let's price it high and see what happens.
• You couldn't build this house for twice the amount I'm selling it for!

But with others you get a sense that there is an emotional attachment that is preventing them from selling. So no matter what the market says or what you tell them, they are going to overprice their homes--and hope that they get no buyers or that they get a price so high that they can move on.

Why?  I don't have the answers but I have thought about it a lot.  Here are a few reasons that I think this happens:

Reason #1:  They have too much of an emotional attachment to their house.

An emotional attachment may occur in several forms.  It may be a family home where children were born and raised; it might be that the owner built the house or put too much sweat equity into every renovation.  The owners may have such an attachment to the house that they can't ever picture someone else living in "their home."  They may need to downsize but leaving their home causes so much anxiety that even if they look at smaller houses, they will never find one that will be better than the one they are currently living in.

Potential Solutions:  My experience has shown that, until the owners see the downside of their current situation, they will have a hard time moving on.  They need to see that another lifestyle, another state, another type of living situation is better.  Whether it is warmer weather drawing them or the fact that someone else will take care of the yard or that they will be able to travel more or they will be closer to family, there must be something that is attracting them more than where they are right now.  Once they realize that, they will be more likely to let their house go.  

Reason #2: There is pain associated with the sale.

This is similar to Reason #1except that it is driven by not being able to accept something that has already occurred. Sometimes people associate a house with a  past life that they no longer have and the house is the only way (in their minds) for them to hang on to it.  For example, if a divorce occurred and one person is not willing to accept it, he may see the house as a symbol of a marriage he still wants.  Or he hopes that she will return because she also feels an emotional attachment to the house.  As long as he thinks that they may get back together again (even though the divorce is finalized), he will have no motivation to price it to sell. 

Potential Solutions:  Until a person is willing or able to move to the next stage in his life, it will be very difficult to convince him to price the house to sell.  He will be an unmotivated seller and it may be better to just stay in touch until the situation changes.

Reason #3:  They owe too much on the house to realize any gain if they sell at a lower price. 

We have been indoctrinated to believe that real estate is an investment, and when we don't see the gains we expected, it just doesn't sit well.  These people are holding out for a high price just so they can sell the house, pay closing costs, and either break out even or pay out only a small amount.

I'm not talking here about people who have to do a short sale; those people have already come to grips with reality and are working toward a solution.  The people who fall into this category have not accepted that they won't make any money on their investment and are hoping against hope that someone will want to buy their house at an above-market price.

Potential Solutions: They can either wait it out and hope that the market recovers, or they can sell and buy in the same market.  They could find another property that has better potential for appreciation or a property that offers lower taxes, lower mortgage payments, or more amenities for their money.  If it truly is a short sale, they need resources and advice on how to successfully sell it for less than they owe on it.  But if they are just wanting to make money on their investment, they have to realize that no one is going to overpay for a house.

Of course, there are many reasons that a person will want to overprice their house; some people are simply not realistic, don't really need to sell their house, or are just testing the waters.  But others are not emotionally ready to sell and may be using overpricing as a way to sabotage a potential sale.  Are their any easy solutions? Probably not, but sometimes it helps if we can understand the reasons behind their unrealistic price.