The Power of Emotion and Money when you sell your home.
When selling your home it is vital that you separate your emotions from your money. Selling real estate is simply a business transaction. People put a lot of emotion into their homes. We raise our families in our homes. We pour blood, sweat, tears and money into our houses. I have seen people refuse to sell at a good, solid market price because their favorite dog is buried in the back yard. Sometimes people tend to get emotional about the sale of their real estate because so much of their identity is wrapped up in what they “own”. You are not your house. Your house is not your children. When separated from our relationships, a house is simply a neatly arranged pile of sticks, stones and metal.
In cases of divorce or other legal issues people will often impart emotion into the sale as well. Often times in situations like those, one party wants the house to sell a lot faster than the other party.
I know I am being purposely crass here, but my point is that at some point you will be separated from your house. By a job transfer, severe legal or financial problems or death, we all leave at some point. When it’s time to go, it is time to go. You cannot take it with you.
Fear and angst over money can kill a real estate deal when left uninhibited. What if you owe more on your home than market value will bear? That also invokes emotions in people’s minds. Frankly, what you owe on your home has absolutely no influence on your market value. Over indulgence in credit or the deflation of house prices in your area certainly does not determine value in either direction. Is it possible you can attract someone who will break you even at the closing? That is a rare possibility, but not likely, especially when there are so many other homes out there to use as comparison to yours.
You may be in a position where you have to pay down the balance using cash from your own pocket, a loan from your retirement fund or a credit card. How badly do you want to sell? Is it a priority? Is it an emergency? What is the cost of keeping the house? When separated from the emotion, is it a money saver if you walk away from the house owing a small portion of the debt and pay that portion off over time? I have seen people make dozens of payments on a house they no longer need or can afford simply because they did not do the math in respect to what it REALLY costs them to keep the property. Add up all of the expenses connected to the house. Calculate the payments, interest, taxes, insurance, utilities, and maintenance such as mowing or snow removal. Add to that figure the LOSS of the use of your money elsewhere as well as the inconvenience and the negative emotion of having a burdensome property (if that applies).
I know it is difficult, but I have learned from experience on many occasions that as a purely business standpoint, sometimes it makes sense to admit defeat, surrender, and sell a take a loss.