It is very easy to get caught up in the moment and the excitement of buying a home; but putting the emotions aside and making the most rational decision possible is imperative. After all, you will be there awhile.
There are several common mistakes that home buyers make when making an emotional decision. Bybeing aware of these mistakes and avoiding them, you will be much happier in your home in the long run.
Don’t look at homes you cannot afford. It is easy to fall in love with a home that is 10, 20, or even 30 thousand dollars beyond your price range but this puts you in a position of stretching to buy a house you love. Often this leaves buyers “house poor,” a term used to describe having a house payment so large that you cannot afford life’s other pleasures.
If your budget allows for a $1500 per month payment, but you fall in love with a home that requires a $1800 a month payment, sacrifices must be made. Some of those sacrifices may be more than you want to make after living in your home a few months.
In a market that is low on inventory, like Windham is right now, it might be necessary to make an offer quickly. Do not let the need to make a quick offer rush your decision. Ask your buyer broker to monitor any offers and request a day to make an offer. Sleep on the offer you want to make and make a rational decision the next day. This allows you to contemplate living in the house and the home’s true value to you.
While sleeping on your offer, determine the absolute highest price you are willing to pay for the home you are considering and do not go over that amount if a bidding war ensues.
The flip side of that situation is getting too deliberative in your approach. Some people freeze when it comes time to make such a big decision. When a market is hot, you will not have weeks to decide whether to make an offer or not. Well priced homes will be under contract before you even make an offer. This is an important time to rely on your buyer broker to help you make a rational decision. A good buyer broker should be able to intelligently speak to how long the home will be on the market and what a good offer price would be. They will not always be 100 percent correct, but they should be able to speak from experience on similar situations.
The second part of decision making in a low inventory market is to not offer to pay too much.
There is a ton of competition out there for well-priced homes and it is easy to get caught up in a bidding war on a desirable property. You can find yourself in a position of having a home under contact that will not get the appraised value necessary to close the loan.
Another emotional mistake that buyers make in a hot market is to get desperate. Buyers start to assume that there is nothing better out there and want to jump at the very next house they see because they haven’t found what they want yet.
New houses come on to the market every week. A buyer broker can create an auto search that notifies home buyers when a new home hits the market that fits the criteria they are looking for.
This is a very important tool in a hot market. It is easy for a home to go on the market and already be under contract before a buyer is even aware of it if they are not on an auto search.
The last emotional mistake buyers make that I will talk about is overlooking serious issues and overestimating how handy they are. It is easy to get caught up in a low inventory market and make an offer on a house that does not really meet your needs. It is easy to say you are willing to commute forthe right house, until you start driving it five days a week. It is easy to say, I don’t need to be near schools, until your kids start activities.
The second part is saying you can change out windows, fix a porch, or repair anything else. These decisions turn into nightmares after moving into a new home. Make sure that home is what and where you want and any repairs that you plan to do yourself are in your skill set.
If you avoid these emotional mistakes when buying your home, you should have a pleasant buying experience and avoid home buyers regret.
Rick Yost is a Realtor®, real estate author, and a long-time Windham resident. You can reach Rick with any of your real estate questions or needs at firstname.lastname@example.org.