It’s important to go into any listing of a home with an idea of your ‘bottom line’. But, the Plan B is also just as important. Often I will go to a listing appointment and while the ‘bottom line’ is clear for a seller, they may not have a Plan B.
In today’s market, perception of value may vary dramatically. For example, the home seller that had a value of $700,000 at one time, may have a hard time believing they are looking at a market value of $550,000. And the buyer, who may still believe there is room to fall in this market, may see the value at $500,000.
As we know, seller need, seller desire, does not determine value in the eyes of the buyer, lender or appraiser. So what happens when you can’t achieve your bottom line?
Your listing agent should have this discussion with you on the very first appointment - even if the number seems achievable. What is your Plan B?
Plan B’s rarely are fun and they generally involve some tough decisions that you hope to avoid. But avoiding the questions and the possibilities, won’t help.
Possible Plan B’s:
- Don’t sell. If you don’t have to move and you are determined to get a particular price, stay.
- Bring in cash to close. If you know that you will not be able to cover all the costs in a particular price range, do you have the money to bring in if this is the only option and you must move?
- If you don’t have the cash to bring, and you owe more than it’s worth, can you do a short sale?
- Can you lease out the property until the market appreciates enough for you to get your price?
- If the loan is part of the need to sell (creating affordability problems), can you qualify for a loan modification? Will that allow you to stay?
These are some thoughts to get you started in the Plan B conversation. Again, I recommend that these tough questions are asked prior to ever listing your home. If you get what you need - super! If not, everyone knows the plan.
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