When Sellers Get Cold Feet
Seller’s remorse: that sinking feeling in your heart and stomach knowing you may have lost something you can never get back. In real estate and especially home ownership, this “syndrome” is very real and have sent some into a downward spiral that has a ripple effect into other parts of their lives.
The leading cause of seller’s remorse and how to avoid it is when an offer presents itself before the seller has time to fully consider and process the option to sell or keep.
With buyer’s remorse on the other hand, you are often able to get out of the contract because of certain subjects in the contract but you won’t be stuck with a house you don’t want.
With seller’s remorse you don’t have that option; you can only hope and dream that the buyer’s decide to back out. It is for that reason that you should be doubly sure that you want to sell your house, not just something that you are thinking about.
Just like buyers who get cold feet, sellers can also feel remorse, have second thoughts about selling a home. Seller's remorse often happens because the seller was not really motivated in the first place. Sometimes sellers think they want to sell, but they don't really have good reasons to sell.
But before you put the kibosh on the sale, I suggest you revisit all the reasons -- the physical or mental list of pros and cons -- you compiled for putting up your home for sale in the first place. People who re-examine these motivators will often realize, albeit grudgingly, that selling was actually the right decision given changes in life circumstances and needs. Ask yourself this question: Where do I see myself in five years?
What is Seller's Remorse?
While buyer's remorse is more common, seller's remorse does happen, and for a variety of reasons:
- Some owners simply feel they should have gotten a better price and were taken advantage of.
- Others don't want to sell at a reduced price after a surprisingly low appraisal.
- Some have a practical reason: A new job didn't materialize or work out.
- More often, though, the overwhelming emotions of letting go of the beloved family homestead tend to reign in such cases.
Sometimes sellers want to "test" the market, to see how much a buyer will offer, to figure out if a home is priced right. That can be wasted effort and time for buyers, Realtors and the sellers. The first question many agents ask is why is the seller selling? How much a seller wants is not really paramount to the situation unless the amount the seller hopes to receive is hopelessly out of the question.
Real estate agents spend money to advertise and market. Agents receive no return on that investment and earn no money when sellers are not serious about selling.
Seller's remorse means the seller has decided it was a mistake to list a home for sale and no longer has a desire to sell.
As an example, a seller decides to put his home on the market because they feel the market is declining. The sellers thought if they waited a few more years, the value would fall so low that they would lose the opportunity to make a reasonable profit. After the Realtor brings them an offer, they panic. They now came to the conclusion that they could not part with their home of 16 years at any price. Suddenly, the reality of the situation hits. It's a common reaction when a seller is not truly motivated.
How to Prevent Seller's Remorse
Owners can prevent seller's remorse by thinking through the entire process and having a plan -- a relocation goal -- including strong reasons for selling.
- A real estate agent can help a seller plan for the future and walk the seller through options. Discuss wants and needs with your agent and be honest and open in your discussions.
- Draw up a list, sorted by benefits and drawbacks to selling. If the benefits outweigh the drawbacks, then you should sell. If the drawbacks exceed the benefits, don't put your home on the market.
- If a seller is worried about not being able to find a suitable replacement home, the seller can specify long dates on completion which will give them more time to find a place they like.
How a Seller Can Cancel a Listing
A listing agreement is a binding contract between the seller and real estate broker. Not every listing agent nowadays binds the seller to selling the home if the seller changes his or her mind.
Do not sign a six-month listing agreement if the agent will not agree to cancel the agreement at your request. Ask about the length of the listing and if you can shorten the term. Many real estate agents enjoy a good reputation in the community and would be willing to cancel a listing, but you should ask about it before you sign a listing.
Somewhere along the line, you should be able to work out a compromise agreeable to everybody.
What Happens if a Seller Gets Cold Feet at Closing?
If the process has proceeded past the subject removal stage, you have signed off on everything and then change your mind, things can get complicated and could lead to legal proceedings taking place.
Consider the jilted buyer's costs
If you're staying put, the good news is that backpedaling sellers, such as you, are rarely forced to sell, though they can pay through the nose if the jilted buyer is hugely inconvenienced -- read: "damaged" -- by the decision. Not only would the deposit be returned but you may have to also reimburse the buyer for such things as:
- Temporary housing rental.
- Lost deposits.
- Storage costs.
- Inspection and survey fees.
If you balk, a court could award these, plus legal costs, to the buyer.
Be honest with your Realtor from the start and make sure they have explained the process and when there is no turning back from the deal.