December 12, 2012
Even experienced home buyers and sellers should be careful to avoid letting themselves get carried away by their own confidence. It can be difficult to stay focused and objective during a home sale or purchase, since the transaction often comes with emotional involvements.
Home sellers frequently feel attached to their current homes even when preparing to leave, and buyers may become convinced they've found the "right" or "perfect" home. In either case, this emotional aspect of the deal can make it difficult to continue basing things like price offers on concrete facts. The advice of real estate agents is valuable partly because they hold a point of view not as emotionally invested in the sale or purchase.
One common problem among buyers, according to experts, is misunderstanding the market. This often results in one or a series of offers too low for the seller to realistically accept. Buyers may correctly evaluate a home but underestimate the competition for it, not realizing that the same features which make it appealing to them are also drawing the interest of others.
Such a situation may arise when local market conditions are encouraging lower pricing, for example. If buyers are keeping track of the market well enough to realize prices are generally down, that can help them negotiate. They may misunderstand the degree to which it is true, however, and accidentally hurt their own chances of striking a deal.
Additionally, buyers in this situation may demand concessions of the seller, secure in the strength of their position. While this may work in the short-term, it risks alienating the seller. If a buyer later needs more time to close the deal or some other concession, angered sellers may refuse.
Both buyers and sellers risk delaying deals. Prices that are unrealistically high or low, overly strong demands and other mistakes generally cost time. For buyers, it means the home search takes longer. For sellers, the consequences can include more time with their home on the market, which can lead to future buyers wondering if something is wrong with the property.
Another difficulty sellers may run into as a result of high prices, experts say, is that buyers will not even come to look at a home. Whether based on an estimate of their own negotiating position and skills or the market as a whole, overpricing can stop home sales before they start by driving off prospective buyers, who may look at a listing and immediately conclude the seller is unreasonable.