Home Prices Are Declining, So Don't Take It Personally!

Bob and Mary have lived in their home for almost 40 years. It was their first major purchase together as newlyweds, and like many new home buyers, the feeling of this purchase was indescribable. They raised their children, Sarah and John, in this house, and soon the house itself was more like a part of the family as opposed to just four walls and a roof. The memories that took place in this house are worth more than anything money can buy. John's first steps, Sarah's first day of school, John's first little league win celebration, Sarah's first date coming to pick her up, and the list goes on and on...

Now that the 'kids' are out of the house and married with kids and families of their own, it's time to sell. The upkeep and maintenance of the home is becoming more difficult for Bob and Mary as they are getting older. So, they regretfully decide to put the house on the market to make room for a new family to start memories of their own. They decide to call a Realtor to come price their home, and they are appalled by the price that is suggested. "But, this home is our pride and joy," Bob proclaims, "We have lived here our entire married life! How is it not worth more?" Mary asks, confused. After a few sleepless nights of mulling it over, Bob and Mary decide it's best if they sell, knowing after all the upgrades and changes they made, the 2 roofs they put on, the landscaping and sprinkler system, and the central air they installed, that they will be lucky to make the kind of profit they saw for themselves a couple of years ago.

Despite the Realtor's suggestion, they list the home higher than what the comparable sales in the area are averaging. For the first few weeks there are absolutely no showings while other homes in the neighborhood are selling. Their Realtor tells them that they will have to reduce. Sales are declining at a rapid pace, and Bob and Mary are missing out on valuable market time. They reduce the price by $20,000, and the showings start to pick up. Finally an offer comes in...at $25,000 under the new reduced asking price, but Bob and Mary are insulted by this offer and they reject it. Their Realtor begs them to consider a counter offer, and tells them that if they don't work with this offer they should be ready for many more lower offers to come in. And, he is right. The next offer comes in at $60,000 under the asking price, and Bob and Mary are beside themselves with anger, regret, and confusion. After a few short negotiations, they arrive at a selling price of $45,000 under the asking price. At this point, when all was said and done, Bob and Mary's house -- their nest egg -- had been undercut by the ailing economy. But they still have their memories.

This example is not too far fetched, and it's a depressing story that we, as Realtors, encounter on a daily basis. The declining market does not discriminate. It does not care that Bob and Mary have built not just a home here, but a life. Buyers today are extremely market savvy. They watch all the real estate shows, they keep up with housing prices, and they are fully aware that anyone who is selling in this market is selling because they HAVE to - not because they want to.

Obviously, as a Realtor, I want my sellers to get the most for their home that they possibly can. However, there are many obstacles standing in their way these days when it comes to achieving that goal: home inspections, appraisals, and of course, the ability of the buyer obtaining a mortgage. Taking all of that into account, sometimes the best scenario is to let it go and leave the past behind. It's sad, but true.