Did I Accept a Bad Offer on My Home?
Everyone knows about buyer’s remorse. Usually goes something like, “woe is me, I paid too much, wish I hadn’t done that, what was I thinking.” Then a day later, “Okay, now I’m over it. Hey, I really like this place, guess I did know what I was doing!”
But perhaps the best kept secret in real estate is seller’s remorse: the tendency of sellers (who recently accepted an offer) to flip out on the fear that they could have gotten more for their home.
Funny enough, seller’s remorse happens in every market. When every listing got $50,000 or $60,000 over the asking price and buyers’ offers were limited only by how high the appraisal could go, sellers second-guessed their acceptances, coming up with outlandish hypothetical scenarios in which appraisal limits wouldn’t apply, like an all-cash offer from a Ukrainian dry cleaning heiress. (Sometimes these delusions got really detailed.)
Lately though, seller's remorse is a little more understandable, as smart sellers just aren’t as heavy-handed in their negotiations out of a concern for not alienating an interested, qualified buyer who had their pick of the market.
The Client. It’s funny, the smarter the seller, the more they seem to think they should magically morph from a non-profit administrator, say, into a shrewd, poker-faced negotiator, like a client of mine seemed to think. While they battle this impulse, it’s actually not that bizarre (given the state of the market) to want to do a happy dance that someone wants your place at all, but I guess that doesn’t jive with the whole wanna-be crack negotiator deal.
“I think I left money on the table,” my client said when the buyer quickly accepted her counteroffer, increasing the sale price about 5 percent. It was like the fact that the buyer said "yes" so fast made my client doubt that she’d asked for enough.
The Workaround. I told her that the buyer had probably (a) lost several homes to multiple offers, as is common right now in our area’s entry-level market and (b) already decided how high she would/could go, which made it a very easy decision for her.
“We can never know for certain whether we could have gotten more money out of the buyer,” I advised her, using my best, soothing ex-yoga teacher’s voice. “First off, we talked about this before you even put the place on the market. This is just normal seller’s remorse, and deep down I think you know that. But still, let’s look at the deal you struck. It’s nothing to sneeze at. We went as high as we thought it would realistically appraise for and she agreed to go there. She’s very well-qualified and I know that agent. She’ll close the deal.”
“But,” she started. “No buts,” I said. “She took the place as-is! I mean, sure, it’s possible we would have found someone else to pay that price, but then we’d be talking about a totally different deal, a different buyer, a different buyer’s broker, etc. Would they take it as is, warts and all? Would they be as well-qualified? Would they even close the deal? You can never know, and the reality is that you got an offer above what we expected and at a price that will let you move on and buy the place you want. We’re in contract, so why don’t we shift from beating-yourself-up mode to thinking-about-your-next-place mode. Don’t you think that’d be a better use of your energy?”
The Result. She agreed to sleep on it and called me back in the morning. She agreed. And it turned out that the buyer was a dream -- a super smooth deal with no repair requests or renegotiations even after she found some unlovely issues during inspections. Within a week’s time, my client found the idea that she’d ever even had seller’s remorse to be completely laughable.
Don’t get me wrong, there is such a thing as a bad deal -- deals that don’t close or with unreasonably demanding buyers or with pricing that was desperation-based rather than based on the fair market value. But in my experience, most sellers who think they’ve accepted a bad offer are experiencing a case of seller’s remorse. The cure? Thinking forward to your next home, rather than back.