10 reasons home sellers are still stressing

By Marilyn Lewis of MSN Real Estate

 

A couple of years ago, who would have guessed that you'd see this problem: too many homebuyers and not enough sellers.
The shortage of homes for sale is easing a bit. But with homes selling overnight in some cities and prices increasing by at least 10% since 2012, you'd think more homeowners would rush to pound "for sale" signs in their yards. Curiously, many still hold back.
"What gives?" we asked would-be sellers. Here are 10 reasons homeowners are stressing about the decision to sell and 10 ways they've found to sleep better at night.

 

You're stressing: I'll end up homeless

Manhattan-based comedian Dan Nainan yearns to trade up. "I really want a two-bedroom," Nainan says. "I could really use the extra space, and my income has increased to the point where I can afford one."
Selling is easy. So what's the problem? Buying another home, that's what. He has to sell his one-bedroom apartment first, and in the competitive Manhattan market, an eager buyer probably will displace him before he has time to find another home.
"You have people buying $100 million penthouses and coming from places like Brazil, China and Russia with billions of dollars to spend," Nainan says. Multiple offers and price wars are common. Some buyers bid on places they've never seen just to get something — anything.
For Nainan, temporary homelessness wouldn't be a disaster. He can live with his parents in Washington, D.C. He can live anywhere as long as he's near a major airport. But house hunting from 200 miles away? Argh. "I'm trying to decide whether it's worth the trouble," he says.
 

 

Sleep better: Offer cash

Strategies for avoiding homelessness vary. Many people find their next home first, getting it under contract before listing their old home.
But in Chicago, where real estate is "on fire," Sara Benson, president of Benson Stanley Realty, advises homeowners to sell first. Because her sellers are in the driver's seat, Benson has them demand three things from a buyer as an insurance policy:

• Preapproval for a mortgage
• Lots of earnest money — 10% or 15% is great
• A delayed closing — by many months, if possible

 

You're stressing: You take the house. No, you

Your home used to be the asset you fought to keep in a divorce. Now it's a ball and chain if you want a divorce but your nest egg is sunk in a home you can't sell. Yes, prices are rising. But 20% of U.S. mortgages still are worth more than the home.
Lisa C. Decker, a certified divorce financial analyst in Atlanta, helps people save money as they untangle their finances and separate their lives. She sees miserable couples stuck together because of their homes. One has a house worth $700,000 less than it cost. They sunk their savings — a half-million dollars — into the purchase. Without that money, they can't afford separate households.
Even if the husband were to pay the mortgage in lieu of alimony, the wife and children couldn't stay on without him because the upkeep is so expensive, Decker says.
"The home used to be the thing that folks fought over: 'I want the house, this is where I raised the kids,' yada yada," Decker says. "Now it's, 'I don't want the house. I can't afford the house. You take the house.'"

 

Sleep better: Stick it out for a while

When there's no other way, unhappy spouses suck it up and stay together until their finances improve. It's not ideal, for sure, but rising home prices already are freeing some who've been waiting.
Decker saw another couple who tried divorcing last year but instead ended up in separate hostile camps inside their home. "He's taken over the basement," she says. "They can't afford to live in two households."


 

You're stressing: The price isn't right

A couple of years ago, R.J. and Karen Diaz decided to live more simply. Even with two children, they didn't need a four-bedroom, 1,900-square-foot home, they decided, despite the attractive office upstairs and the studio/office in the basement. Then, with the economy shaky, they wanted financial slack and savings for travel, kids' college funds and old age. Both are self-employed: she as a consulting dietitian and he as a general building contractor who had recently poured savings into starting a company, Industry Portage.
They tried selling their  home in Wyckoff, N.J., in 2011. All they got were offers from bottom feeders. Discouraged, they took it off the market and tried again in 2012. Again, more bottom feeders.

 

Sleep better: Rediscover your home

The economic recovery delivered an unexpected solution for the Diazes. Not only did prices in Wyckoff recover, but their financial pressures eased when their work picked up. They reconsidered, looking at the improvements they'd made, from the new kitchen and master bath to the refinished floors and renovated basement. If they sold, could they ever buy back into exclusive Wyckoff, with its high-priced homes? Perhaps not.
Chances are they'll stay put. "We've made it our own," R.J. Diaz says. "This is where our children were born and raised. We've got a beautiful piece of property."

 

You're stressing: Too many buyers, too much intensity

Listing your home in today's hottest markets can trigger an avalanche of buyers. Some sellers can't cope. In March, Tonya Nelson, a Redfin agent in Washington, D.C., warned her Alexandria, Va., clients that their cute, two-bedroom, two-bathroom home, priced at $385,000, would attract interest. The sellers knew that few homes were for sale, and they thought they were ready.
As soon as they listed the home, calls started flooding in. "They were terrified," Nelson says. Five hours later, worrying the home would sell so fast that they'd have to go to a hotel with their 2-week-old baby and the family dog, they pulled the listing from the market.
A Denver couple freaked out even faster. They listed their home at 9:30 a.m. and delisted it at noon, overwhelmed by the response. Paul Stone, their agent, was surprised, too. "Within an hour after listing it, I had phone calls from agents wanting to get into that house right away."


 

Sleep better: Pull back, get some air

For both couples, leaving the market provided a breather and a fresh start. Relief came for the Alexandria couple when more new homes began arriving on their market. Confident now that they could buy a home, they relisted their own four weeks later and sold it for $410,000. The extra money helped sweeten their offer for their next home.
The Denver homeowners, on the other hand, decided to nail down their next home purchase before listing again. Because their finances allowed it, they were able to find a home they wanted, sign a contract and then relist and sell their previous home, all within two weeks.
 

You're stressing: We'll never find another home like this

Reba and Don Strickland need to downsize. "I could live in this house until I die, but there's no way I'm taking care of this yard and pool for another 10 years," says Don Strickland, a retired airline pilot.
To prepare, they remodeled their 3,600-square-foot home. But then they fell in love with the upgrades. It's hard to let go.
"We literally have people knocking on our door offering to buy the home," Reba Strickland says. Buyers covet The Woodlands, Texas, a planned community north of Houston.
They constantly tour homes for sale but can't choose. Their next place should be new. And smaller. But not too small. In The Woodlands, of course. But listings go quickly. The community is nearly built out. "We're in a crunch," Reba Strickland says. "If we want a new home, we have to make that decision fairly quickly."

Sleep better: Maybe you already decided

Sometimes, no decision becomes the decision. Will that happen with the Stricklands? It's too soon to know. But, really, where can you go when your home is perfect, with its new granite counters and travertine floors, extra-big master bath, adored neighbors and 17 years of happy memories?



 

You're stressing: We're picky

Michael Aki and his husband held off selling their home for two years to search for the right trade-up house near their town of Wakefield, Mass. Both are designers. Aesthetics are crucial. Also, both are "midcentury modernists," a problem when you live in a region that worships Colonials.
So far, nothing has met their standards. They've toured dozens of homes with inexpensive face lifts. Aki loves a bargain, but a tastefully chosen one. These have "substandard cabinets, bottom-of-the-barrel lighting fixtures and the same black granite counters with little sparkles in it," he says.
"We're really picky," he says.
Letting go of finding perfection, they've started looking for a place to remodel. Meanwhile, the market has become wildly competitive. Aki worries they'll be forced to use their remodeling budget, too, to buy a home.

 

Sleep better: Roll with the punches

They may be picky, but they're also realistic. Tired of the dilemma and in need of more space for their 4-year-old twin daughters, they put their home on the market. It sold immediately.
They found, Aki says, that there would be more options with cash in their pockets. "Sellers are saying, 'I don't want an offer on my home if you have to sell your home.'"
Now, the family faces a new problem: They need a new home, and fast. Their new motto: "Roll with the punches." They're open to many possibilities, including temporary rental.
"If we have to, we'll get a two-bedroom apartment and keep looking. We'll put our two 4-year-olds in the same bedroom and let them eat each other," Aki says.

 

You're stressing: We can't see dry land 

Five years and a baby ago, Brad and Elizabeth Lowrey (pictured) bought a three-bedroom "fixer-upper" bungalow in Ferndale, Mich., a quiet town north of Detroit. Brad Lowrey likes home improvements, so he poured a couple of thousand dollars and a lot of sweat equity into turning one of the bedrooms into a nursery.
Now, though, baby No. 2 is coming, and rehabbing the remaining bedroom is a bigger job. The prospect of stuffing two children, two adults and two dogs into the little bungalow with its teeny yard feels claustrophobic.
Finding a bigger home won't be hard. There are plenty on the local market. But the Detroit region was hit hard by falling home values, and their home now is underwater, worth less than their mortgage. To leave, they'd have to pay the lender the difference between the loan balance and the sale amount.

 

Sleep better: Snuggle in

The Lowreys see three options. The lender would probably agree to a short sale, in which you sell for less than the mortgage amount and the bank takes a loss. Or they could try working with a local developer who, if you purchase one of his homes, promises to take over your old house and the mortgage.
But as much as they want more space, the Lowreys surprised themselves by deciding to stay put. The other choices "seem a little too complicated and too shady to us. We are leaning more toward staying," Brad Lowrey says.
All in all, their history with this little house makes it home. "I think we'll just end up staying where we are at, and I have a nice, expensive summer project ahead of me," he says.

 

You're stressing: Can I recover my investment?

Meet Joshua Escandon, amateur real-estate investor. By day, he's a creative director for a production and design firm.
In the housing-market bubble, Escandon made a couple of good trades, buying, rehabbing and flipping homes for a profit. He figured he'd do the same when, in 2006, he bought a one-bedroom condo for $345,000 in Sherman Oaks, Calif.
But then prices fell. The condo's value sank to around $200,000 before returning to about $299,000. Also, Escandon put $50,000 into upgrades: travertine and hardwood floors, a new kitchen and bath, a Jacuzzi tub, recessed lighting and crown molding. His expectation of a $100,000 profit was crushed, and he lost money. A lot of money.


 

 

Sleep better: The market to the rescue

Through it all, Escandon has tried to stay philosophical, even optimistic. After all, the condo was a nice home for the past seven years. "I'm a glass-half-full kind of guy," he says.
Although he's itching to sell, he's holding firm, waiting for prices to keep rising. He plans to list the condo after it has gained another $40,000 in value — by fall, if the current trends hold.
"$339,000 is my rock bottom," he says. Once the condo sells, he'll try investing again. "I want to go buy more property and flip it. I like to watch real estate come to fruition."




 

 

You're stressing: We have to move before school starts

In theory, Michael Aki and his husband have the whole greater Boston area from which to choose. But having school-age children makes the intricate timing of back-to-back home transactions even more complex.
Decisions about school districts dictate where you'll live, when you can shop and when you can move. When Aki and his husband put commute distances and school test scores into their calculations, their home-shopping radius narrows to just three school districts.
They want to move now, before school starts, to position their twin daughters for their K-12 years. "Our goal is to get into the area where we will stay until they graduate from high school," Aki says.

 

Sleep better: Make a Plan B

Aki and his husband tried but, so far, failed to buy a home in time for the first day of school. They sold their current home to have cash for a quick purchase. But they'll have to leave in late August and still can't find a home to buy.
Aki is resigned. You just can't control all the variables, he says. "They are young enough that it's not going to traumatize them." They may move to a rental to take the pressure out of home shopping.
Schools were a factor for the Diazes, who are leaning toward staying in their Wyckoff, N.J., home. They had hoped to downscale, buying financial freedom. But their children are established in Wyckoff's schools. "Why disrupt that?" they ask themselves.

 

You're stressing: It's a rental

When George Scott, an independent technology consultant, and his wife, Staciah, moved to Houston from Brooklyn, N.Y., in 2003, they planned to buy a home, live there briefly and move on, selling it at a profit.
They found a big, older home in a tree-lined neighborhood for $160,000 and stayed until 2006. Then they found a new home.
George Scott listed the old house himself to avoid agents' fees. He asked $195,000. No buyers stepped up. "No one could get a mortgage," he says. Finally, he rented it, expanding his little real-estate empire to three properties — the new home and two rentals, the old Brooklyn place and his first Houston home.
Between renters, he tried selling again, in 2012, but without success. The rental is bleeding money, and he knows he should reduce the price and market it again. But he dreads asking his tenants to leave and spending even more on necessary renovations. "I know I'm going to take a hit," he says.

 

Sleep better: Get your tenant's help

A landlord who wants to sell a rental property faces a dilemma. How do you show and sell a home that's occupied by a tenant? Good relations with tenants help:
Sell to your tenant. Offer your tenant the first crack, suggests Sara Benson, president of Benson Stanley Realty in Chicago. You'll save on agents' commissions, so you can discount the sale price.
Rent to family. While waiting for prices to recover, Joshua Escandon rents his Sherman Oaks, Calif., condo to a cousin who will keep the home tidy and admit buyers and agents as needed. "That's what cousins are for," Escandon says.
Batch showings. Bunch up showings — for example, on Saturdays between 1 and 3 p.m., or after 5 p.m. weekdays. Give tenants 24 to 48 hours' notice.
Discount the rent. Reduce the rent in exchange for the tenant's promise to keep the home show-worthy.
Know the law. Landlord-tenant laws vary. Nolo.com lists statutes here, by state. Know your tenants' rights. Consult an attorney if you're unsure.

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