Facts and Figures Trump Feelings When Buying a Home
Buying and selling real estate is a very emotional process. That’s certainly the case with both parties -- buyers and sellers. I recently met a seller who had a very beautiful home he was planning to offer for sale. He built it from scratch with quite a few extras in finishes, and absolutely gorgeous view.
After our conversation about their plans for moving and their goals for marketing and selling their home, we discussed the comparable sales in the community to pinpoint the fair market value as well as a right asking price for their home. The market data in the community clearly showed the fair market value of the property to be between $1.6 and $1.7 million. The seller was not too happy with those numbers, and we heard a statement we hear very often: “We just need someone to fall in love with our home and an agent that can appreciate all we have done to it.”
How Buying a Home Can Be Like a Bad Date
We all know buyers make the decision to make an offer on a property based on that “We love it!” feeling they get when they look at a home. I would, however, argue this feeling is similar to love at first sight that you might see on a reality show. Everything seems perfect in the beginning but it doesn’t last.
Have you ever met someone that seemed like a perfect match initially? Imagine you are at the party and there is this great guy: tall, well built, handsome, appears to be a gentleman, cracking jokes, being funny, and he attracts all the attention in the room. Everyone loves him. He’s the perfect guy! (I apologize to anyone reading this who prefers a beautiful woman -- feel free to swap the description, but the principle is still the same).
You talk with him and by the end of the party, you’re thrilled when you both agree to meet again. During the second meeting, you go out to dinner and that’s where things begin to look quite different. He starts talking down to the waitress. He cares about the car that he drives more than you. Worse, his arrogance begins to show. At the end of the night, you realize this charming personality has serious character flaws. The initial spark is slowly getting smaller and smaller and eventually disappears.
Love Only Gets You So Far
It’s not that much different in real estate. The initial affection in a property is very quickly overshadowed by the reality of facts and numbers. Every buyer, regardless of the price point, will want to make sure all other aspects of the property are as sparkly as the initial appearance. That’s where they meet with their agent to review the comparable sales to confirm they are falling in love with the right candidate. The next step is the home inspection where things need to check out again.
If your asking price is too high, love won’t mean much if they can’t afford it or they have a good agent who helps them understand why they shouldn’t pay too much. A home inspection that comes back showing multiple problems will win out over extra details or enough square footage. When the appraisal comes back showing that the home isn’t worth what’s being offered for it, the mortgage company will act like the parents in Romeo and Juliet.
As a seller, you can’t depend on a buyer falling in love with your home, no matter the price. At the end of the day, facts take over emotions. Yes, make sure your home is something buyers will love. But don’t forget to back up that love with more than charisma and charm.
Ready to buy or sell? Let’s talk!