Who’s the Boss?

Shortchanged by Shortcuts?

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• With underwriter approval, documents will be released for signing. • Don’t confuse “signing” with closing. The escrow office will verify that all documents meet state laws, and both you and the seller will have a signing appointment. • With final lender approval after signing, the funds are released to escrow for closing. • The property title is released to transfer by deed and recorded in the county office. • You now own the home and your real estate agent will deliver the keys to you.

Section 3:

Selling

Chapter Fifteen:

Should I Stay or Should I Go?

“The early bird gets the worm, but the second mouse gets the cheese.”

– Willie Nelson

“Is this the best time to sell?” “Maybe we should rent our place instead of selling.” “Should I be buying my next home, or should I rent for a while?” “What if we just refinance and remodel instead?”

These are the types of questions people often ask me before putting their home on the market. Sometimes the decision is simpler – some circumstances demand a quick and immediate sale – job transfer, family changes, etc. But in many cases, the sale of a home is one of choice; one in which there are many possible, difficult-to-predict, outcomes… just the type of scenario in which the human brain relies heavily on shortcuts and would be better served by a more rational approach.

To avoid the common shortcuts normally used in seeking the answers, let’s break the question of whether to sell now, or not, into two categories: 1. What does the money say to do? 2. What creates the highest quality of life?

WHAT WORKS

QUALITY OF LIFE

**Cue Venn diagram music** (I’m a sucker for Venn diagrams) In the money circle you’d put things like: • How much could you sell your home for? • How much could you rent it for? • What are the associated costs with either? • What would it cost to buy where you’re moving? • What would it cost to rent? • Do you need to sell before you buy? • How much would it cost to remodel your current home?

You’d fill the quality of life circle with questions like: • What would it be like for each kid to have their own room? • Or, what would it be like to no longer have to maintain a home big enough for kids who are gone? • What are the public schools like near my current, and proposed, home? • What is the commute like from either location? • Are their crime issues? • Do I want to be closer or farther from the city?

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Shortchanged by Shortcuts?

Should I Stay or Should I Go? | 145

But don’t commute times have a dollar cost to them? The difference between public and private school certainly does. Renting has a quality of life cost as well as a monetary cost. Mess around with this Venn diagram long enough, and you’ll notice something: Questions that at first blush fit neatly on the money side can shift into the quality of life side. Quality of life issues likewise almost always come with a monetary cost.

Buying a home is not always better than renting. Owning a home you rent to others to build equity is not the best path to wealth for everyone. These are individual choices, not something decreed from on high. That we’re, by default, looking for the “right” answer (not only in matters of real estate) is often invisible to us.

We live as if there are choices that are inherently right or wrong and then demand we find the “right” one. Little creates more stress, and less joy, than pretending we could make the wrong choice.

Have you considered that, maybe, the only “right” answer is the one you can own as the right answer for you right now – at this very moment?

Considering the thought process will give you some power with the choice you make.

Key Point: There are no “right” answers, only answers that are “right” now.

When you see that Confirmation Bias skews the very act of looking, you’re not tied as tightly to the answers your looking provides. Notice how unexamined, pre-existing notions color the process. What do you already know to be true about the situation? What are you certain about? These are usually flags to where Confirmation Bias lay in hiding.

Watch for how, once you find “the answers,” you stop looking for alternate possibilities. Can you catch yourself collecting evidence that the choice you made was that holy grail of all choices, the “right choice”?

The Availability Heuristic will likely have you put a disproportionate amount of weight on what passes for “news.” Interest Rates Are Going UP! Housing Prices Reach New Highs! It’s hard to escape these headlines at every turn.

Unfortunately, what isn’t as readily available is that this “news” (like all news) is generated to sell advertising. Prices, like interest rates, go up and down. Uh, excuse me, but that’s not news. What’s new about that? Think about it. It can only be “news” the first time you hear about it. The rest of the time it’s more likely to be hype than relevant.

Is the latest “peak” the top? Neither you nor the talking head have any way of knowing. Are increasing interest rates going to mean a rush of buyers or an end to the rush of buyers? Anyone pretending to know the answer is doing just that. Pretending.

Consider, if you practice being present, you cannot make the wrong choice. It’s not that it doesn’t matter what you choose. It matters. There will be consequences either way. But because it matters is not to say there’s a right and a wrong choice. If you honestly looked for an answer, and you can be responsible for your choice, then that’s the right answer.

To illustrate the malleable nature of this type of choice, let’s look at a friend of mine. This is a woman who is brilliant in many ways, and is a very successful wealth manager and financial consultant. She lives in Silicon Valley, one of the hottest real estate markets in the country. This woman has a mastery of the costs and benefits of longterm renting vs. home ownership in a way that, when I think about it, makes my eyes roll back in my head. Up until recently, she’s been clear that, with what she’s committed to in life and what’s important to her, renting her home and not owning made the most sense.

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