Seller Expectations vs. Reality

Seller Expectations vs. Reality in Real Estate

Know when to “Hurry Up” and when to “wait”

Navigating the real estate market can be an emotional rollercoaster for sellers, as their expectations and assumptions frequently differ from the actual reality. Let's explore a side-by-side comparison of what sellers might anticipate versus what typically occurs after a showing and once in contract.

Feedback After Showings

Seller Expectations:

• Immediate Feedback: Sellers often expect immediate, detailed feedback from potential buyers after a showing.

• Keep in mind also, the showing agent may be showing multiple homes in one day to the same buyer.

• When they get home they will have feedback emails from every showing.

• If they are still out showing homes, they do not want to be bothered by showing agents calling them asking “How it went”.

• Positive Comments: There is a hope for overwhelmingly positive feedback, confirming the seller's own views of their home.

• Quick Offers: Many sellers expect that positive feedback will quickly lead to offers.

Reality:

• Delayed or Non-Responses: Feedback may take time as agents gather and communicate responses from potential buyers.

• Three feedback email requests are sent out to the showing agent.

• 1st Email goes out the day of the showing.

• 2nd Email goes out 48 hours after the first email was sent, if no feedback is received.

• 3rd Email goes out 48 hours after the second email was sent, if no feedback is received.

• If no response comes back after the 3rd email, typically the buyer did not have interest in your home.

• Having the seller's agent make a phone call to solicit feedback can leave a negative impression and may often come across as desperate, especially since three attempts by email have already taken place.

• Mixed Reviews: Feedback can be a mix of positives and negatives, highlighting both strengths and areas for improvement. 

• At times, it seems that only negative feedback comes through.

• No Immediate Offers: Positive feedback doesn't always translate into immediate offers; buyers may continue to view other properties before deciding.

• Role of the Listing Agent: Dan, your listing agent is your representative and will handle most of the communication with potential buyers and their agents. 

  1. Incoming questions about offers or regarding the property are key indicators of interest.

• Initiating Contact: Having Dan, your listing agent reach out directly to the buyer's agent for feedback does not necessarily make you appear desperate, but it typically does to some seasoned agents, like Dan.  Dan typically, does not advise this.  He has already sent 3 emails requesting feedback.

• Ideally, the buyer or buyers agent is initiating contact to Dan, not the other way around.

  1. It’s similar to dating, but different.

     1. If the other date contacts first and immediately, it often sends the wrong message.  Believe it or not, this is exactly like dating.

• No Feedback: If you don’t receive feedback, it’s often because the buyer was not interested. It's important to remain patient and trust these true and tested strategies.

  1. Acknowledge and accept that the prospective buyer who viewed your home is simply not interested.

Once in Contract

During the Option Period (Inspection Phase)

Seller Expectations:

• Smooth Process: Sellers often anticipate a seamless process once the home is under contract.

• Instant knowledge of status of the buyer’s inspection:  Most seller’s feel like they know what the condition of their property is in, so after the inspection, expect immediate feedback of how the inspection went.

• Minimal Negotiations: They expect minimal additional negotiations, assuming all terms are already agreed upon.

• Quick Closing: A rapid closing is often expected, leading to a swift completion of the sale.

Reality:

• Waiting for a Response Is Most Effective: Relying on the listing agent to inquire about the inspection results, immediately after the inspection has been completed -isn't the most effective strategy for negotiating any issues that were revealed during the inspection.  This approach can give the impression that the seller's agent is desperate and ready to do anything to sell the property.

• The best way to find out the outcomes is ideally after the option period has concluded (ensuring the buyer is committed to the contract), or if the buyer's agent proactively contacts the listing agent to share the specifics.

• Best practice is to wait it out patiently, until after the option period has 100% expired.

• Unexpected Hiccups: The process can encounter unexpected issues, such as appraisal discrepancies or inspection findings.

• Even though the contract was agreed upon the home being sold, in as is condition, often the buyer will ask for XYZ repairs once the house has been inspected.

• Option periods are typically 7-10 days and end at 5:00 PM on the last day.

• If terms can not be worked out during the option period, it’s common for the buyer to ask for an extension of their option period.

• The buyer can terminate during the option period for any or no reason.

• It’s very rare, but the buyer could terminate and then rescind their termination, if both the buyer and seller agree to do so.

• Further Negotiations: Additional negotiations may occur, especially if inspections reveal issues needing resolution.

• Any issues concerning safety should ideally be addressed, and the seller should anticipate completing these types of repairs.  For Example:

• Gas leaks, mold, water leaks, and fire or electrical hazards are typical safety issues that sellers should be prepared to repair at their own expense. This is especially important when the buyer is obtaining a loan.

• Extended Timelines: Closing dates can often be delayed due to financing, appraisal, or other contingencies related to the buyer.

• The seller is still required to maintain all utilities until the closing date, even if it’s delayed.

• Title company emails and potential phone calls:  The seller should anticipate that, during this period, the title company will reach out via email to request the following:

• Contact preferences

• Payment for the HOA resale certificate

• Any mortgage information necessary to secure a payoff for the closing date.

In Contract

Past the Option Period (Pending Phase)

Seller Expectations:

Final Stretch: Sellers often believe that once they are past the option period, the sale is practically guaranteed, with only minor details left to finalize.

• Limited Interaction: There is an expectation that communication will decrease, assuming that all major hurdles have been cleared.

• Appraisal: Sellers anticipate the appraisal to meet or exceed the sales price with no issues.

• Quick Closing: Sellers anticipate that closing will proceed smoothly and swiftly, as any potential deal-breakers were presumably addressed during the option period.

• Some sellers expect to close by email or digital signatures.

• Some sellers think that only one of the two people on the title can sign at the closing.

Reality:

• Continued Vigilance: While significant obstacles may have been overcome, sellers should remain attentive to any last-minute issues that could arise, such as financing complications or title concerns.

• Title Concerns:  Even after passing the option period, sellers may still encounter title concerns that could impact the closing process.

• Unexpected Liens: Sometimes, undisclosed liens or debts associated with the property may surface during the title search. This can stall the process as these issues need to be resolved before the title can be transferred.

• Boundary Disputes: A property boundary dispute with a neighbor could unexpectedly arise, necessitating legal intervention or a mutually agreeable resolution before the sale can proceed.

• Title Chain Issues: There might be complications in the property's title chain, such as unclear ownership history or previous transfers that weren't properly recorded. These issues could require legal clarification or additional documentation.

• Proper Documentation: Ensuring all required documents are in order and correctly filed is crucial. Any missing or incomplete paperwork can delay the finalization of the sale.

• By being aware of these potential issues and working closely with their real estate agent and title company, sellers can address title concerns promptly and ensure a smoother path to closing.

Appraisal

A pivotal step in the home-selling process, the appraisal can either validate the seller's asking price or introduce unexpected challenges. Sellers often expect the appraisal to confirm their perceived value of the home, especially if it has been recently renovated or is in a desirable location. However, the reality can be quite different.  The appraisal typically is one of the last tasks that the buyer’s lender is required to complete.  Even though, the order for the appraisal has already been completed, the actual appraisal is often delayed to be completed days and sometimes weeks later.  Out of a thirty day closing timeframe, the appraisal is often completed 5-8 days before the actual closing date.

Seller Expectations:

• Confirmation of Value: Sellers anticipate the appraisal will match or exceed the listing price, affirming their belief in the home's worth.

• Seamless Process: Many hope for a straightforward appraisal process without any hitches or complications.

• Minimal Impact: There is often an expectation that the appraisal will have little to no impact on the sale, particularly if the buyers are already eager to proceed.

Reality:

• Appraisal Shortfalls: It is not uncommon for appraisals to come in lower than expected, which can lead to renegotiations of the sale price or necessitate additional funds from the buyer.

• Detailed Scrutiny: The appraisal process involves a detailed examination of the property, including its condition, features, and comparable sales in the area. This thorough evaluation may reveal aspects that sellers might have overlooked.

• Potential Delays: If the appraisal value is significantly lower than the agreed sale price, it can delay the closing process as both parties work to find a resolution. This might involve price adjustments or waiting for a second opinion from another appraiser.

• Revisiting Negotiations: In cases where the appraisal does not support the sale price, sellers may need to revisit negotiations, which can include reducing the price, making concessions, or addressing any issues identified during the appraisal.

• By understanding the intricacies of the appraisal process and preparing for various outcomes, sellers can better manage their expectations and navigate any challenges that arise, ultimately leading to a more successful transaction.

• Ongoing Communication: Interaction with agents, lenders, and the title company may still be necessary to ensure all paperwork and conditions are met before closing.

• Final Walkthroughs: Buyers will likely perform a final walkthrough to ensure the property is in the agreed-upon condition, which can sometimes lead to unexpected last-minute negotiations if discrepancies are found.

• Closing Adjustments: Even at this stage, minor adjustments might be required, such as prorated taxes or unexpected fees, which can affect the final amount sellers receive.

• Patience with Timelines: Despite being past the option period, delays can still occur, often due to financing or document processing, requiring sellers to remain patient and flexible with the closing timeline.

• Actual Closing Reality: In Texas, if two individuals are listed on the title or are currently married, both parties must sign the closing documents in person.

• Valid Identification Required: Ensure your ID is current. If it is expired or has an incorrect address, it must be updated before the closing date.

• Virtual Closing Options: Some title companies permit virtual closings, where both individuals can join an online meeting via platforms like Zoom or Google Meet. However, valid IDs are still necessary.

• If one party can only close via a power of attorney, a document must be created to facilitate this process.

• Sometimes, even if this is allowed by the title company, the buyer’s lender may not allow it.

Conclusion

Understanding these potential discrepancies between expectations and reality can help sellers prepare for the complexities of selling a home. By managing expectations and being proactive in addressing potential issues, sellers can navigate the process more effectively and reduce stress.