3 soothing insights for anxious first-time sellers- Tara Trulia

3 Soothing Insights for Anxious First-Time Sellers

Posted Under: Home Selling  |  November 12, 2013 2:25 PM  |  20,759 views  |  22 comments

I grew up just a couple of hours from Disneyland. So as a kid, one of my greatest joys (and greatest anxieties) revolved around the Pirates of the Caribbean ride (this was pre-Johnny Depp, folks). I loved that ride - especially the big drop at the end - but I also feared that ride, especially the big drop at the end. Fast forward a couple of decades and I found myself standing in line for the ride with my own kids, with bated breath and anxious fear/anticipation. We got on and I continued to hold my breath. Just a few minutes later, we sailed gently back to the starting point. 
I walked up to an attendant and asked: “When did they take the dip out?” The guy looked at me quizzically and said that the ride’s course had never been changed. The ride didn’t change. But I had - I had grown taller, and so my perspective had shifted. Nothing about the ride was worth even a moment’s anxiety now that I’d grown taller and impervious to the dips and twists and turns.
Selling a home is a bit like Pirates of the Caribbean was to me. It’s one of those life experiences that comes only after a long period of anticipation, and has lots of twists and turns. And - especially on your first ride - it occasions lots of breath-holding moments where you can do little but wait and see how your decisions will turn out.
But that doesn’t mean you have to experience your first time selling a home as a full-time emotional rollercoaster for the duration.
Here are a few perspective shifts that can minimize the anxiety and maximize the outcomes of your first home-selling experience:
1. It only takes one. The goal of your pricing, marketing and property preparation efforts should be to give your home as much appeal to as broad a segment of qualified buyers as possible. That’s why, if you read this blog often, you’ve heard me beg and plead for you to get rid of your sequined kitty cat tiles and turn your dedicated jai-alai court back into 3 bedrooms before you list your homes for sale: highly personalized customizations can often limit your home’s appeal. The chances you’ll find another buyer who has always wanted a series of permanent shrines to Twinkies surrounding the headboard nook in the master bedroom are, simply put, slim.
That said, don’t get discouraged if you set what your agent feels like is a rational list price, have a well-attended open house, show your home to 10 buyers and the sun goes down with no offers. You might have heard some other seller crow that their home sold before the sign could even go up. But in real estate, as with most other areas of life, comparing yourself with someone’s else’s experience is a setup for upset.
Work with your agent to get a good understanding of the average length of time a home in your area stays on the market, and use that as a benchmark or signal that it might be time to revisit pricing or otherwise course-correct your home selling plan of action. In the meantime, understand that while your task is to market broadly, your ultimate success at this endeavor of home selling only requires that one qualified buyer fall in love with your home - so don’t get discouraged or panic while your agent goes about the process of exposing your property to the market and the population of local buyers.
This fundamental truth of real estate also brings up one more success factor that is well within your control: make a commitment to only show your home in its very best light. Don’t slack off on the cleaning and clutter-clearing just for this one showing or that one: you don’t know which of the buyers who comes to see your home will be “the one,” so make sure your home’s smell, preparation and presentation shines for all prospective buyers who come to see it.
2. Facing reality takes courage, but is less painful than the alternative. One of my favorite authors of all time, Dr. Henry Cloud, writes in one of my favorite books of all time, Integrity: The Courage to Meet The Demands of Reality (HarperCollins, 2006), that the definition of integrity is the courage to see and face reality. Yes: courage.

• Facing the reality that your home needs a serious investment in sprucing, cleaning and staging before it goes on the market might take courage.
• Facing the reality that your home might be worth less than you hoped, and that listing it at your fantasy price is a setup for failure can also take courage.
• Facing the reality of the feedback from buyers and buyers brokers who have seen your home and passed on it? That definitely takes courage.

But here’s the thing about integrity and exercising the courage to face all these realities: they empower you to do something to change your reality and dramatically increase your home’s saleability. And here’s the other thing: if you don’t face these realities, 9 times out of 10, at some point, “attention will be paid” (to quote Dr. Cloud).
That simply means that you can pay attention to the blind spots about your home’s readiness and pricing and marketing up front, when your agent begs you to, or you can pay attention to them later, when your home fails to sell and you’ve gone through all the stress and drama of showing it and listing it and you’re getting low ball offers from buyers who assume you must be desperate. 
Facing such realities before your home ever goes on the market might take courage, and might be a little painful, but it’s much less painful and costly than allowing yourself to keep living in fantasy land.
3. You have the power to prevent much of what you fear. Fear is often the result of feeling powerless over your fate. When the fate we’re talking about is the speed and price of the sale of your largest asset, perceiving yourself to be at the mercy of the market can give rise to fear at a very intense level. Here’s the good news: feeling powerless about selling your home is only perception.
The truth is that you have a great deal of power to influence the outcome of your home’s sale. Only you can:

• take a deep-dive into your financials to understand whether you can afford a move up - or whether you need a move down - and how much you can afford to spend on housing after your sale
• make the ultimate decision about when to sell and when to stay put
• find, vet and select the just-right agent for you and your home (our Find an Agent tool can help you get started, as can asking your friends and colleagues who love their agents)
• paying attention to and understanding the comparables and making a reality-based pricing decision
• do the work of getting your home prepared for sale - and make the final call about what work to do and what to leave for your home’s next owner
• provide abundant access to your home for buyers who want to come see it - and make sure it’s buyer-ready before every single showing
• course-correct your pricing, marketing or property preparation decisions as needed based on feedback from the market
• make the final negotiation decisions when you do get an offer, in order to get into contract
• cooperate with your home’s buyer, appraiser, inspectors, contractors, escrow providers and even your local authorities to get your home sale transaction closed smoothly

Every time you get the feeling that things are spiraling out of your control, think on these things and all the other ways you actually do have control over your home’s sale and how it turns out. And loop your agent in: experienced agents can often propose alternative solutions to almost any problem that might not otherwise even occur to you, especially during your first experience selling a home.
SELLERS: What causes you anxiety around selling your home? How do you deal with it?
EXPERIENCED SELLERS: What did you do differently during your second (or third, or fourth) time selling a home than you did on the first go-round.
PS: Don’t forget to like Trulia and Tara on Facebook.

4 Soothing Insights for Anxious First-Time Buyers

Posted Under: Home Buying  |  November 6, 2013 12:41 PM  |  47,474 views  |  37 comments

Anxiety is an autonomic nervous system response that is hard-wired into every human being. It’s part of our instinctive reaction to sensing a danger or threat in the wild - and the wild world of real estate is no exception. Of course, buying a home doesn’t involve an actual, physical threat like the lions or tigers or bears our forebears faced. But during the home buying process, it’s not bizarre to feel like your dream home, your precious financial resources, your vision of your family’s future or your best interests are being threatened. 
These anxiety-inducing “predators” range from the dangers of bad decisions, hidden home condition problems, and the other buyers who are bidding on your dream home.
As with a threat in the wild, anxiety can cause a normally calm home buyer to have a fight or flight response - making panicked decisions or freezing entirely up, both of which deprive you of your most deliberate, wise decision-making power.
If you’re experiencing low-grade anxiety around your first home purchase, that’s probably a sign that you take it seriously and that you understand the importance of the matter. But if your anxiety is rising to the level that it causes panic or paralysis, those reactions actually pose a bigger threat to your smart decision-making than any actual threat you’ll encounter in the wilds of the real estate market. 
Here is a short list of truths about real estate that can soothe your first-time buyer anxiety down to a level at which it won’t foul up your decisions or your vision.
1.  It’s only takes one.  House hunting is daunting by dint of the sheer magnitude of the numbers involved: all the specs and characteristics of a home, all the decisions you have to make, all the documents you have to provide just to get pre-approved, all the homes on the market, and all the buyers you might have to bid against.  (And of course, there are all those zeroes on the purchase price itself, probably more than were at the end of any other purchase you have ever made.)  
But here’s a soothing number you can focus on: one. You only need to find one house that fits with your family, your future and your finances. And millions and millions of homebuyers before you have been able to do just that. The challenge ahead of you is the highly do-able task of narrowing down all of those numbers to the one, the just right fit. If you find a home you love, but the sellers want dramatically more for it than you can afford or it turns out to have some fatal flaw, it’s not a panic-worthy disaster: it’s just not the one.  
2.  You are the boss of you. And you’re qualified for the job. Feeling like you’re at the mercy of the mortgage lender, your agent, the market or “your” home’s seller is another serious source of home buying anxiety. But it’s an illusion. Do you have 100% control over every step of the home buying process?  No. But you have far more control at every step than you might think. 
Among other ways you can be the boss of yourself and your first home purchase, you can and should:

• run your own personal budget and determine the maximum amount you can afford to spend on housing
• build your own team of advisors that work with and for you, including real estate and mortgage pros, but also a financial planner, lawyer and/or tax advisor, if that’s what you need
• craft your own vision for your life after you buy your home, and use it as a tool to ensureyou don’t buy a home you’ll regret later
• research neighborhoods, cities, even states and the various factors that impact their future prosperity prospects
• research the home buying process and ask questions (Trulia Voices is great for getting answers from local pros, but also from other local buyers who have gone before you)
• work with your agent to understand market dynamics like list price-to-sale price ratio, and tweak your home search price range accordingly, looking at homes priced below your top dollar to give you room to go up, if that’s the norm in your area
• work with you agent through your target home’s comparable sales
• work with your agent and your mortgage broker to understand the cash you’ll need up front, at closing and monthly, based on your final offer price for any given home
• attend your home inspections
• read seller and HOA disclosures
• read all the inspection reports and get follow-up inspections as needed
• get bids for repairs and upgrades before you remove contingencies
• request your loan docs in advance - and read them in advance
• ask every question you have and keep asking, until you understand
• back out of a transaction and recoup your deposit, if inspections or appraisals reveal serious issues, within your contingency period.

So do these things. Remember that from the time you get the inspiration to buy a home until the time you close escrow, you are ultimately in charge.  You make the final call on a home, on a price, and on when to remove contingencies and make the transaction a done deal. But you also have a great deal of control at every phase of your house hunt - so exercise it.
3.  Speaking up pays off.   No matter how timid or introverted you normally are, just for this experience of buying a home, embrace your inner advocate and make a commitment from the start to speak up for yourself freely and loudly.
Don’t understand something in your Good Faith Estimate? Say so - and ask your mortgage broker for an explanation.
Worried about something you see in your HOA disclosures?  Tell your agent - and work with them to get clarification or additional information.
Have questions or concerns about things you see in the home while you’re attending the inspector? Ask the inspector. And if they don’t know, ask the seller or get a specialist to come out and check it out.
Worried about how you’ll ever afford to fix the plumbing or deal with all the necessary repairs?  Say so, and work with your agent to make a wise decision about asking the seller to chip in or reduce the price, if that makes sense given the other details of your deal.
I once saw a buyer catch a very significant error in loan closing docs before anyone else in the room did. Instead of second-guessing herself or assuming she was the one in error, she spoke up - and probably saved herself thousands of dollars and hours of time in the process. 
4.  Almost no transaction goes precisely as planned. I hate to use the cliche, but you will truly experience much less anxiety throughout the course of your transaction if you expect the unexpected. It might take you longer than expected to find a home that works for your life and your budget. You might end up spending thousands beyond what you started out thinking was your top dollar. Maybe your closing date will get pushed out for reasons beyond your control (and beyond the seller’s control, too). Or it’s possible that the home inspector will recommend an electrical inspection, which reveals some updating that urgently needs to  happen (urgent, as in before you get those custom kitchen cabinets you were planning to have installed the day after closing).  
It’s a very rare transaction in which everything comes off precisely as it was planned. Understanding this and being as flexible as possible will prevent the emotional roller-coaster of breath-holding, anger, outrage and complete lifestyle chaos that arises when first-time buyers expect every step of the transaction to happen with Swiss-watch precision.
BUYERS:  What are your fears or anxieties about the home buying process?
PAST-BUYERS:  What were yours?  And how did you handle them?
P.S.: You should follow Trulia and Tara on Facebook!

3 Hot Market Horrors - and How to Make Them Go Away

Posted Under: Home Selling  |  October 30, 2013 9:26 AM  |  62,116 views  |  33 comments

Our homes create the context for so many of the happiest moments of our lives. But sometimes, the process of buying or selling a home gives rise to some pretty fright-filled experiences. We all have heard loads of stories about the nightmarish moments that are part and parcel of buying or selling a home in a down market. But a rising market doesn’t exempt any of us from becoming the character in our own real estate horror story.
This Halloween week, here are a few of the more common hot market horror stories we hear about here at Trulia, along with some “tricks” for making them go away.
Horror #1. The Headless House Hunt(er). When you’re constantly running into rising prices and multiple offers, it’s critical to be flexible with your house hunt wish list. But that flexibility sometime results in so many changes to your wish list that you end up feeling aimless, directionless, and like you are letting the market dictate what sort of home you can buy. And that’s not a great feeling, when what every buyer wants is to approach their house hunt with intention, direction and clarity on their wants and needs. 
That feeling of directionlessness is very ungrounding, and sometimes even results in near-immediate buyer’s remorse. That scenario looks like this: your 42nd offer is (finally) accepted, you turn to your agent, spouse or yourself in the mirror and say or wonder, “Wait: do I really even want this house?!?!”
There’s a fine line to walk between wisely conforming your house hunt to the reality of the market and being aimless or, headless, so to speak. One way to help manage the emotional discomfort and potential for post-purchase regret is to invest some time documenting your intentions and vision for your next home and the life you’ll lead in it, in writing, before you ever even go meet with an agent. 
Before you start thinking about your house hunt in terms of specific neighborhoods, bedrooms and square footage, put pen to paper (or fingers to keyboard) and detail how you want to live in your next home. Touch on everything from:

• How you’ll get to work (examples: by car, public transport or working at home)
• How you’ll spend your spare time (examples: entertaining, doing DIY fixing, at the neighborhood yoga studio or wine bar)
• What sorts of activities you envision your family engaging in (examples: traveling the world, training the dog, skiing every weekend in winter and hiking in Summer)

Getting the big picture vision down on paper does two things. First, it creates strong clarity and direction about the more granular details of the homes that should fall within your search and also empowers your agent to suggest properties and neighborhoods that could fulfill this vision which you might not otherwise have gravitated toward.
Second, it creates a reference document that allows you to check in with your own gut once you’re in contract, minimizing buyer’s remorse and wayward, in-the-moment decision making. If you make lots of changes to your property criteria during the house hunt and are concerned that the home you’re buying reflects too many compromises, consult with this document. If you can envision most of these life wish list items taking place in that property, you’re probably in good shape. If you can’t, at least you’ll know that before you remove your contingencies, so you can make a conscious decision that you’re okay with the compromises or that you want to back out of the deal, before doing so becomes costly or irrevocable.
Horror #2. Hot Market, Cold Listing. Few real estate matters are worse than reading that your market is hot, hearing your friends are putting in over-asking offers, seeing your neighbor’s house fly off the market, and watching your own lag on the market without a single offer in sight. I find that sellers in these situations often overcomplicate and overthink things, when the reality is actually simple and stark: 8 times out of 10, a home that is taking much longer than similar listings to sell is overpriced. 
[The other two out of 10 include homes that really do have some serious issue or flaw which makes them inappropriate for most buyers, and the occasional home that is undermarketed: no photos online, hard for buyers to get into, or poorly staged for sale (e.g., dirty, smelly, etc.). It does make sense for you to do a quick audit of how your home is appearing on Trulia and other real estate websites, if your home is lagging. And it also makes sense to listen hard to property preparation advice your agent is giving you. But most of the time, overpricing is the issue.] 
Understanding that your home might be overpriced is simple. But understanding the comps and adjusting your price to hit the sweet spot of local buyers is more complex. That’s why you have an agent, who is happy and has the skills to a) help you understand local buyer demands, inventory levels, seasonal market dynamics and comparable sales data, and b) wrap all of these indicators into an appropriate pricing strategy. 
And that’s why it’s important that you select a listing agent with a track record of selling homes in your area. It’s a bit less harrowing to trust an agent’s frank pricing advice, even when it hurts, when you know it has worked for many sellers before you.
If you’re horrified at the prospect of a price reduction, ask your agent to walk you through comps of recent listings with a history of price reductions in your neighborhood, exploring questions like:

• What price did they start at, and what price did they sell at?
• Where was the pricing sweet spot?
• What level of reductions were effective at getting homes sold?
• Which reductions were followed by a series of additional reductions before sale?

Fixating on the facts and figures around recently sold comps can help you make price reductions driven not by desperation, but by smart, data-driven strategy well-calculated to end the nightmare.
Horror #3: A New Flavor of Stuck. When the market is rising, an aura of exuberance can take hold. There’s a feeling of freedom among those sellers who patiently waited out their underwater status and finally start to feel their heads (and mortgages) rise above water. That freedom is the freedom to sell without penalty and to move freely, whether in town or about the country (or the world, for that matter).
And so we’ve seen it happen, that as the market has begun to thaw, so have many homeowners’ feelings of being stuck in their homes. And as they have started to sell, a new conundrum begun to rear its ugly head, and it goes like this: the hotter the market, the easier it is to sell - but also, the more difficult it is to buy. If you stand to get dozens of offers on your home, and you’re aiming to buy an even bigger, better place in the same town or neighborhood, you could very well face the same level of buyer competition, bidding warfare and over-asking sale prices as you benefitted from on the “sell” side. 
We’ve seen sellers get unstuck from an upside down home, sell and then end up renting or - gasp! - moving in with the in-laws when they get a taste of this new flavor of stuck: being finally able to sell, but unable to buy.
Fortunately, there are a few methods your agent can help you deploy to avoid this seller-side Catch 22:

• Seller contingencies. It is an increasingly common practice for sellers in hot markets to make their home’s sale contract contingent upon their ability to find and secure their next home. Talk with your agent about how this works and the advantages and disadvantages of seller contingencies.
• Buy first. Finances permitting, you might be able to actually buy your next home first. This is not without risk, as there’s never a 100% guarantee of what you’ll be able to sell your home for - or when you’ll be able to sell it. But if your ability to buy is not strictly dependent on your ability to sell, if you are financially comfortable with holding both properties for a period of time, or if you’re otherwise willing and able to weather the risks given what you know about your own home’s likelihood of selling, it might make sense for you. Have this conversation with your agent, as well as your mortgage broker, and tax or financial advisors.
• Seller rent-back. Selling first is the least financially risky option. But if you want or need to close escrow on your old home to get the cash for your new one, talk with your agent about negotiating a rent-back into your contract. A rent-back allows you to close escrow on your home’s sale, but rent it back for a few weeks or longer from your home’s buyer while escrow on your next home is closing. Rent-backs often give rise to mortgage, contract and insurance issues, but most experienced agents and brokers can help you address them, especially if you only need to be in the property for a short time after closing.

All: What hot market horrors, if any, have you encountered?

PS: You should follow Trulia and Tara on Facebook!