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Real Estate Can Be an Emotional Experience

by Mark Scheller

REAL-ESTATE CAN BE EMOTIONALLY HOSTILE:

 

What Is Making Home Seller’s SCREAM In Frustration?

 

What if, I could save you $40,000 on your next home?  Sounds good right?

 

But, what if, your current home would sell for $25,000 less than you expected.  Does this still sound good?

 

What would YOU say if on the same day you could gain $40,000 on your purchase, but lose $25,000 on the sale of your current house?   That is a $15,000 gain in one day.

 

To me this is an easy YES, but you would be shocked at how many people can not make it past this hurdle.

 

If we tell a home-owner, the house they love, where they have lived for years, has gone down in value, it can be emotionally crushing.   When they compare the loss in value on a home they LOVE, to a future discount on a home they don’t love yet …..it can just be EMOTIONALLY HOSTILE.

 

In a market like this where inventory is high and sellers are motivated, a buyer can achieve either:

  1. To simplify your budget by owning a lower priced home. Or,
  2. Own a home nicer than you ever thought possible because of the 3% interest rates.

But, neither will happen unless you can release the emotional shackles that tie you to current house.

 

The question is:  Can you do it?

 

Can you say goodbye to the current house and find a home that suits ALL of your needs?  Including the financial ones?

 

A Tale of Two Homes

by Mark Scheller

 

 “A Tale of Two Homes”

This is an accurate Tale of two nearly identical homes on a St. Louis street called Country Ridge Dr. As fate has it four years ago these two competing homes were for sale at the same time. 

 

One was occupied, in above average condition, had a motivated seller, and was for sale for $219,900.  These highly motivated owners had only 1 house showing in the 2 weeks prior to WHAT HAPPENED NEXT.

 

Next, the home directly across the street came on the market.  It was the same floor plan, same age, same builder, was in a below average condition, and it was a FORECLOSURE.  The sign went in the yard on a Wednesday with “no showings until Saturday”.  The Bank advertised a price at $199,900 because the home needed extensive repairs and it had a shaky Title situation.

 

That Foreclosure house had 14 showings on Saturday and there were 9 offers the first day…including one from my customer.  By 5:00pm Monday those 9 customers had competed with each other, like wolves over a hunt, with the winning contract being a whopping $216,500.

 

A month later the occupied house, right across the street, in above average condition sold for $207,500.  A full $9,000 below the piece of junk foreclosure sale.

 

REALLY folks?  Is this what we have come to?  Can we be that myopic to compete with each other over an inferior product, overpay for junk, and just to win the trophy over others?   Does there have to be COMPETITION to get our attention?  A former start-up called E-Bay learned years ago, the premise that if we compete for junk, and win, somehow we are satisfied.

 

In 2012 Real-Estate, nearly half of home shoppers will be so focused on the foreclosure and bank-owned junk that the good homes with motivated sellers will be invisible to them.  Hey, I know it’s tempting to find a foreclosure, make a low offer, and try to steal something.  We can even tell our parents and friends what we did and perhaps demonstrate our shrewdness as a person to be taken seriously. Right?

 

If you’re not mindful of your motivations you could get swept away by an investor mentality of buying a foreclosure piece of junk for a very low PRICE.  Sadly, in the long term you may realize your completed Cost was so high that your Trophy gets tarnished beyond recognition. 

 

Hey all, I see this all the time. Even if the buyer gets a healthy 10%-25% discount on a foreclosure.  It is seldom worth it.   That up front PRICE advantage disappears into an escalated COST, expensive cash repairs, a 3-month root canal of unexpected charges, and often a home that is difficult to resell.

 

My advice to the Savvy real-estate buyer of 2012 is ….KEEP AT LEAST ONE EYE on the traditional homes with many updates, stable foundations, healthy Title’s, and motivated sellers.  You may find your best matches there. 

 

 

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Photo of Colleen Lawler & The IrvineTeam Real Estate
Colleen Lawler & The IrvineTeam
Coldwell Banker Gundaker
111 Chesterfield Towne Centre
Chesterfield MO 63005
Office: 636-391-2100
Toll Free: 800-791-3276
Fax: 636-536-3018