When you decide to sell your house, it can be hard to let go emotionally, because many of us associate our house with the memories we created there: the birthday parties, the holiday celebrations, and all the firsts—from your child’s first steps to your first day as empty nesters. This can be problematic when it comes to determining your property’s market value because your memories are priceless, while your house is not.
As you contemplate a listing price, remember that you get to take your memories with you to your new home. The memories don’t stay with the old house, so their value shouldn’t either. Determining a listing price is one of the many things a good Realtor can help you with. Your Realtor will review comparable properties in the neighborhood and assess the local housing market trends to come up with a suggested listing price. This is often the moment when sellers see a flash before their eyes of all the improvements they made, and wonder why the house isn’t worth more.
The cost of some improvements can be recouped, usually those that involve updating kitchens and bathrooms. However, converting a garage to a family room or installing built-in shelves may not increase the value of the home by the amount of money (and sweat and tears) you invested. Work with your Realtor to understand the reasons for his or her suggested listing price.
In addition to square footage and location, your Realtor may consider issues such as how quickly you’ve said you want to sell. Keep in mind, the Realtor does not establish the value of the home: the market does. The Realtor is simply trying to interpret market data to reflect an accurate value so potential buyers will come knocking.
Can Realtors make mistakes? Yes, of course. But are they typically trying to sell your property at a price below market value? No, that doesn’t benefit them or you. You should definitely feel free to ask how your Realtor came up with his or her suggested list price, and where wiggle room may exist, but just because you don’t like the price doesn’t mean it isn’t the right one. Sellers have an especially tough time with this concept when they paid too much for the house and are now “upside down” (owe more than the house is worth). Sadly for those folks, when the appraiser comes to examine the property, there is no line item for how much you paid for the house—this has no impact on the value of the property.
If you want to know how much money you’ll walk away with at the end of a sale, ask your Realtor to create a seller’s net sheet, which includes the sale price minus the expenses related to the sale (e.g., brokerage fees, loan, title and escrow fees and any credit to the buyer for repairs).
Here are some signs that you may be overly emotionally invested in your house when it comes to selling it:
- You argue with the Realtor that the list price is way too low
- You ignore the Realtor’s advice about making improvements, repairs, or updates to the house
- You refuse to respond to requests to show the house in a timely manner
- You become irrational during negotiations after buyers make an offer or counter offer
It’s understandable to have an emotional attachment to your house, just be sure to recognize it so your emotions do not take precedence over judgment.
One final piece of advice: before you sell your house, be sure you can qualify for a new one. It’s best to get preapproved for a loan to buy another house before you let go of the one you’re in.
If you have questions about real estate or property management, please contact me at rselzer@selzerrealty.com or visit www.realtyworldselzer.com. If I use your suggestion in a column, I’ll send you a $5.00 gift card to Schat’s Bakery. If you’d like to read previous articles, visit my blog at www.richardselzer.com. Dick Selzer is a real estate broker who has been in the business for more than 40 years.