5 Emotional Mistakes Sellers Make

Have you ever said something in the heat of the moment, then wished for weeks later you could reel those words back in?  Truth is, all of us commit emotion-driven mistakes in some areas of our lives.  But when it comes to selling your home - read: cashing out your most valuable asset - the stakes are simply too, too high to allow yourself and your transaction to fall prey to predictable emotional pitfalls.  

Fortunately, when it comes to emotion, what’s predictable is avoidable if you’re willing to acknowledge and correct for your own feelings and how they can foul up your decision-making.  This list will help you predict - and better yet, avoid - some common decision traps driven by emotions.

1.    Price reduction paralysis.  Wikipedia defines panic as “a sudden sensation of fear which is so strong as to dominate or prevent reason and logical thinking, replacing it with overwhelming feelings of anxiety and frantic agitation consistent with an animalistic fight-or-flight reaction.”  But there’s a real estate-specific reaction to panic that the infinitely wise Wiki editors left out: freezing up entirely.

In cases of overpricing, the seller has most often started out as overconfident in their home’s prospects on the current market.  But as the days on the market turn into weeks, or even months, that overconfidence morphs into panic: panic that the place will only get a lowball offer, panic that the place won’t ever sell, panic that the seller will be stuck in the property, panic that the seller’s future life or career plans will be ruined.  This is a panic that snowballs into increasingly disastrous hypothetical scenarios, and fast. 

Unfortunately, this panic is often accompanied by a fear that actually reducing the home’s list price will actually kick off the snowball effect. This couldn’t be further from the truth: when a home is dramatically overpriced, cutting the price is the only way to fix the scenario (besides pulling it off the market entirely) and render the home more compelling to buyers. Some sellers have actually found that reducing their price gets them to a sweet spot wherein their home receives multiple offers and sells somewhere between the reduced price and the original list price. 

But sellers who cannot manage their fear and panic can end up paralyzed, unable to cut the list price.  And this begins the snowball effect of more and more days on the market, which aggressive buyers watch until they believe the seller’s desperation will make them amenable to a lowball offer. 

The best way to deactivate this panic is to put a plan in place before it ever arises. Work with your agent to understand how to use the data around how long most homes in your area take to sell as a guidepost for making price reductions, if and when the need arises.