Dealing with Sellers Remorse
What happens if you don't want to sell your home after all?
Just as homebuyers can get cold feet, remorse sometimes happens to sellers, too. They have second thoughts about selling their homes long after the sales process is underway.
Seller's remorse often happens because the homeowner wasn't really motivated in the first place. Sometimes they think they want to sell, but they don't really have a good reason to do so. It can also be a very emotional decision, bound to evoke second thoughts.
Seller's Remorse Defined
Seller's remorse happens when a homeowner decides it was a mistake to list their home for sale and no longer has a desire to sell. This is particularly the case when they didn't have a strong reason for selling.
Sometimes sellers want to "test" the market to see how much a buyer will offer and to figure out if a home is priced right, but that's pointless. How much a homeowner wants for a property doesn't really matter unless the high amount the seller hopes to get for the property is hopelessly out of the question.
Testing the waters is unfair to real estate agents who spend money to advertise and market their listings. They often receive no return on that investment and earn no money when sellers pull the plug.
A seller of a Victorian fourplex in Sacramento decided to put his home on the market because he felt the market was declining. He thought the value would fall so low if he waited a few more years that he would lose any opportunity to make a reasonable profit.
But he panicked when his realtor brought him an offer. He came to the conclusion that he couldn't really part with his home of 16 years at any price. He froze when the time came to sign on the dotted line.
Do You Really Want to Sell?
Owners can prevent seller's remorse by thinking through the entire process and having a plan—a relocation goal—that includes strong reasons for selling.
Draw up a list, sorted by the benefits of selling on one side and the drawbacks on the other. You should sell if the benefits outweigh the drawbacks. Otherwise, don't put your home on the market.
Homeowners can fall back on contingent contracts if they're worried about not being able to find a suitable replacement home after their property sells. Contingent contracts give sellers a period of time to locate another home without an obligation to actually close escrow with the buyer if that replacement home isn't found.
It's Probably Going to Hurt
Expect to grieve, even if you have strong reasons for moving on and relocating is more of a positive than a negative. Expect stress.
Rushes of emotion as the closing date draws near aren't uncommon, but you'll be better able to deal with them if you anticipate them. This is particularly true when you've raised a family in that house or have other strong memories associated with it.
How a Seller Can Cancel a Listing
A listing agreement is a binding contract between the seller and the real estate broker. Not every listing agent binds the homeowner to sell the home if they change their minds, but it works both ways. Not every agent will let a seller cancel, either, so that might be a detail to discuss before signing a listing agreement.
Exclusive right-to-sell listings are common, and they entitle a broker to a commission if a ready, willing, and able buyer makes a full-price purchase offer. Homeowners who develop seller's remorse can cancel these listing, but they might end up owing the broker a commission if the broker performed.
Don't sign a six-month listing agreement if the agent won't 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 good reputations in their communities and would be willing to cancel a listing, but you should ask about this before you sign. It can take time to cancel a listing as well because only a real estate broker or manager can do so. The listing doesn't actually belong to the agent.
Talk to the agent, the agent's broker, and, perhaps, your real estate lawyer before pulling the plug. Somewhere along the line, you should be able to work out a compromise that's agreeable to everybody.
When Seller's Remorse Occurs at Closing
Little is more discouraging for all parties involved to slug it out through the home inspection process and get all the way to closing only to discover that the seller is a no-show. Although there have been a few isolated court cases where judges have ruled against these homeowners, the court generally will not make a seller sell.
Buyers often retain the right to pursue damages and sue the seller, however. And brokers will have likely earned a commission and be entitled to demand payment at this point.
At the time of writing, Elizabeth Weintraub, CalBRE #00697006, is a Broker-Associate at Lyon Real Estate in Sacramento, California.