Want a wad of cash for your house? It may be harder to get than you think. (Photo: iStockphoto)
Attention sellers: No one cares what you want to get for your house.
I know, not fair, right? After all, you have a lot invested in your home: All those years of love, care and upkeep; all those memories; and, after all, all that money. And then there’s your new home—how much did you pay for that again?
Still, the fact is that no one cares about any of those things when they’re deciding how much to offer for your home. Don’t believe me? Check out Realtor Cece Blase’s list of things to ignore when pricing your house for sale:
1. How much you need to cover closing costs.
“If you have to bring money to escrow, that’s your problem,” said Blase, a Realtor in the San Francisco Bay Area for 26 years.
2. Your last appraisal.
Had your appraisal done two months ago? Obsolete.
“The market today is the market today,” she said. “What your appraisal said a few months ago no longer has any relevance.”
3. The neighborhood gab about how much the house across the street went for.
There are lots of ways to keep track of home values in your neighborhood, including Cyberhomes’s market reports. But stick to facts, not innuendo. “Rumor and hearsay don’t count.”
4. Your property tax bill.
What the assessor says your house is work? That’s so 2006, before the market dropped.
“We all know your taxes have gone up each year,” she said. “That doesn’t mean the market is doing the same thing.”
5. Your insurance coverage.
"Replacement value, which is what most homes are insured for, often exceeds the home’s sales value."
Ouch.
But don’t be too hard on yourself. It’s only natural to think your home is worth more than a buyer might want it for. Harvard University psychology professor Daniel Gilbert’s Stumbling On Happiness is all about the human brain’s inability to project what will make them happy in the future, or to understand what makes others happy.
In one part, he describes someone placing their car for sale: The person gushes about how great the car is, etc.—and is offended when a potential buyer thinks his old clunker is worth quite a bit less than he does. Gilbert concludes that we overestimate what something we love will be worth to others, and buyers underestimate how much they will love what they have when they get it. The clunker, in other words, transforms into the coolest car ever once the pink slip is handed over.
So what does that mean for your home sale? Probably not much—because you can’t make a homebuyer have the epiphany about how great your house is until its his house. Until then, you’ve got to just assume that they really can’t see it clearly, and they won’t pay as much for it as you might want or even need.—Heather Boerner