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It was a satisfying feeling. We were in escrow. The house was in perfect condition, my clients were completely qualified and we were going to close escrow by the end of the month. My superior presentation skills had trumpeted two other full price offers. I was feeling pretty smug about my sales strategy that had convinced the seller to accept my clientÕs offer over the others. I was the Top Gun, the Big Dog, the King of the Hill and spent whole the weekend in self adulation.
So I wasnÕt in the office Sunday evening when my client, Tom, left the following message. ÒHi Ken, this is Tom. Sandy and I have been thinking about the house situation and we think maybe we should not buy right now. We appreciate all your effort but we have decided to just stay where we are for the time being.Ó
That wasnÕt the message I wanted to hear first thing Monday morning. My mind quickly raced through the five stages of grief: Anger, (what the $%^#@! is going on); denial, (this canÕt be happening); depression (I donÕt deserve this); bargaining (maybe I can talk some sense into him); and finally acceptance; (oh well, itÕs their decision and if the time isnÕt right today, it will be in the future).
Tom and Sandy were ideal candidates for buying a home. It wasnÕt a sudden decision. They had been saving for their downpayment for the last three years. They were secure in their employment and had a minimum amount of consumer debt. On Friday, when we talked, they were excited and planning for their move then by Sunday they wanted to stay put. WhatÕs up with that?
Then, I realized they were infected with the most divisive affliction susceptible to homebuyers. ItÕs called buyerÕs remorse.
BuyerÕs remorse is that OMG, what have I done feeling that occurs after making a major commitment. Homebuyers are especially prone to having second thoughts about their purchase since itÕs one of the largest purchases a person makes in their lifetime. Buying a home isnÕt the same as buying a pair of shorts that you can return if they donÕt fit. ItÕs a long-term emotional and financial commitment.
Previewing homes is a lot like speed dating. There is no commitment. Shoppers get to take a look at whatÕs available. Agents introduce their clients to a variety of properties each with their own physical distinctions and blemishes. Speed dating/previewing is fun and exciting with the mysterious element of discovery. Buyers have all their options available.
Once the initial selection of a home has been made, the buyerÕs relationship becomes more committed and intimate. ItÕs like Ògoing steady.Ó The homeÕs history is reviewed with disclosures, permits and inspections. It is evaluated for its physical integrity (whole house inspection) and financial worthiness, (the appraisal). After some serious evaluation, if the home meets or exceeds the buyerÕs expectations, the relationship with the home evolves to a more serious level.
It is at this point where buyers realize the ultimate direction the relationship is heading. If the buyers continue along the path of purchasing the home, their other options will be eliminated and they will be accepting a serious long-term responsibility. The alternative to this stressful dilemma is to back out and return to the excitement of previewing different homes, or the non-threatening neutral position of not being in a committed relationship with a home.
The anxiety of having second thoughts about buying may manifested by the buyers expressing their concerns that the house is in the wrong location, that it is priced too high or some other heretofore unmentioned objection. However, once buyers are pre-approved for a mortgage, escrow opened and all inspections check out, the real problem usually isnÕt with the property but instead with the buyerÕs lack of self-confidence in making a commitment.
Buying a home today requires determination and nerves of steel. Everyone has their personal horror story about the housing market. Property values have collapsed, foreclosures and short sales are in every neighborhood and it may take years to climb out of a deep recession. With the real estate market taking the blame for so much financial devastation, why would anyone want to buy a home and be committed to a 30-year mortgage?
That conversation, of course, needs to take place long before the process of previewing homes for sale. Not everyone who qualifies for mortgage and needs a roof over their head should be buying a home. I had that conversation with Tom and Sandy the first time we went previewing homes. So what had changed their minds about moving forward with the purchase?
When I called I was careful not to put them in a demeaning or defensive position. I expressed understanding for their hesitancy and asked what had changed since a few days ago. It was Uncle Charlie. Excited about buying they had told many of their friends and relatives. Most were enthusiastic with the exception of Uncle Charlie who had a bad experience of investing in real estate. Once I understood the significant negative factor, we were able to discuss the differences in the situation and then reviewed their initial rationale for buying a home.
Having second thoughts about the largest purchase in a lifetime is normal. Obsessing on all that can go wrong, however, can prevent accomplishing life-time goals. I was partly to blame. I should have prepared my clients for buyerÕs remorse. Discussing the self doubts that clients normally have during the escrow process is like having a vaccination. One might never get the disease without it but a shot of prevention is worth the time.
Next time I will remember to dispense a healthy dose of advice.
Ken Calhoon is a real estate broker in El Dorado County. He can be reached through his Website kencalhoon.com.