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2 May 2014
An emotional seller can kill your purchase. Happens all the time. An emotional seller is a homeowner who just cannot set aside their personal emotional connection with their home. They will attribute value to a home based on their own memories and on how much they have invested emotionally in their home over the years. When times are good, they sell their home for a lot more than they have in it, and that feels good, but when the market is down, the financial loss can cause them unbearable emotional pain, and that is reflected in how they negotiate on price with a buyer. But here’s the clincher. They don’t think they are emotional. They think they are being objective! They are totally sincere, but they are not objective, and it can be the reason they can’t sell their home.
I represented a buyer who found the perfect home and decided to make a reasonable offer. On the selling end, the primary decision maker was packed full of emotions when it came to her home. She didn’t ask her Realtor how much her home was worth–she told her Realtor. The listing agent in this kind of scenario is in a very difficult position. Even a strong agent has no ability to bend the mind of a seller who is totally convinced her home is worth so much. Since setting a reasonable listing price is not something anyone can do with mathematical precision, an agent doesn’t have a slam dunk on persuading a determined seller that the listing price should be less. Maybe a buyer would pay that much. You never know for sure.
By the way, there’s one other reason the agent may be getting set up by that seller for a fall. When an emotional seller doesn’t get her home sold after 6 months to a year, she begins to blame her listing agent, and somehow she forgets that she was the one who set the non-negotiable listing price and during the listing kept repeating to her listing agent her justification for why her home is worth so much. Even if the agent knows that price is too high, the seller never hears the subtle hints and often will not hear anything contrary. The psychology works like this. If you are absolutely convinced of something, you cannot hear anything contrary. It doesn’t sink in. A seller who is told by their listing agent that the price should be reduced often will never remember that. The agent often gets blamed, and a year later the seller is listing with another less experienced agent at a substantially reduced price, and the house sells.
Enter the buyer in my transaction above. The buyer made an offer based on what fair market value was perceived to be for this nice home in this current market, and there was a short list of significant negatives that undoubtedly turned away other potential buyers. When the buyer made the offer through me and I submitted to the listing agent, the reasons for the offering price were shared, including several of the potential problems the buyer would have to deal with. They were hard objective reasons. Unfortunately, we had an emotional seller and an emotional seller’s agent, and instead of acknowledging the objective issues the buyer raised, the seller was “offended” that anyone would not see her home as she saw it–perfect and wonderful and pleasing to the soul. It was almost all those things, but it just wasn’t worth what the seller was demanding. Sellers often miss a critical price issue: Buyers do not attach any emotional premium to a house they have yet to own.
What is the remedy if you are a buyer trying to negotiate with an emotional seller who refuses to bring the price down to what everyone else thinks is reasonable? Time. In other words, only time will bring a seller to the place where they realize they must reduce the price. That usually takes a minimum of six months, but it often takes one to two years. The practical answer for a buyer is start looking at other homes. You cannot negotiate with a stubborn emotional seller.
By the way, you cannot make a blanket rule out of this and conclude that a home that has been on the market for a long time is overpriced. That is another article for another day. There are other reasons a home may not have sold, especially in the higher price ranges. A reasonable seller in any price range will be reasonable. It’s the emotional seller who may not be.
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