Love at First Sight- 5 Errors Impassioned Homebuyers Make
Real-estate agents say emotional mistakes are common among homebuyers, who sometimes let good deals pass them by. Or worse, buyers overpay for their “dream homes” because they let feelings cloud their judgment. But buyers shouldn’t beat themselves up for getting emotional. Buying a home is often the biggest purchase a person will make. Homebuyers need someone in their corner who can counsel them and make sure they are making a smart investment, not an emotionally driven purchase. Buyers should be aware of emotional mistakes many of their peers make. Here are five common errors, with advice on how to avoid making them.
The Grass in Always Greener
Every market has its up and downs, but today’s market has conditioned homebuyers to make the mistake of thinking a better deal is always just around the corner. While it’s true prices could drop further and mortgage rates might decline, it’s not a good idea for buyers to play the odds now. Even in the best of markets, we cannot predict what will happen tomorrow. We can’t promise you that a bigger, less expensive home will not come on the market the day after you close on this one. Market fluctuations are always part of real-estate transactions. Be smart, do your homework, know the value of the area and the home you are buying, and be sure it meets your family’s needs.
Love at First Sight
With real estate, there should be no such thing as love at first sight. It’s easy to fall in love right away. But jumping on the first or second home that a buyer looks at will often result in buyers remorse, overpaying and the inability to sell at a reasonable price down the line. Infatuated buyers who leap at a property tend to overlook the value of the process itself — from inspection to appraisal. Buyers can make the mistake of falling in love with a property after a first visit but before they do their necessary due diligence. Lovestruck buyers sometimes waive key conditions in a rush to make an offer. Sometimes those overlooked details end up sinking the deal.
Every buyer wants the perfect home, but unfortunately it may not exist. On the remote chance that a buyer does find perfection, the emotional attachment will sometimes become so high that the buyer will overpay or overextend themselves financially. And even if the home is perfect and the buyer isn’t overpaying, the owner could have difficulty selling. A 100% match for one person may be a complete disaster to the majority of the population, and a buyer must consider an exit strategy from the beginning to avoid losing money when they sell. There is definite value over time for the enjoyment and use of the home, but that number is slight when compared to the total investment.
In real estate, a deal is a deal, and the terms short sale and real-estate owned are marketing buzzwords designed to lure bargain-hungry buyers. Buyers run into the trap of buying a foreclosure or short sale thinking they are buying way below market value, when they are really overpaying. A good deal is a matter of the property’s historic price, current market conditions and the home’s features, as well as the buyer’s own needs. Weighing all the factors isn’t easy. Buyers dramatically decrease their chances of making emotional mistakes by working with professionals who know the local market. Trying to find a home on your own is very difficult if you’re not familiar with the market on a micro level. Buyers working alone may feel like they are receiving a deal, however, they do not get to see all inventory in the price range desired.
All homebuyers want the lowest possible price, but there’s a big difference between firm negotiating and lowballing. Buyers can come in with unrealistic expectations about what a property should go for. It’s best for a buyer to make a realistic bid not too far off from where he or she would ultimately like to end up. Lowball offers run the risk of being rejected outright or lengthening the process and annoying sellers. Either way, buyers who lowball run a big risk of losing the property. While all buyers are capable of lowballing, it’s a problem especially common among cash buyers who don’t need to borrow money. Such buyers are more attractive, especially to sellers who need to move quickly, but often the cash discount isn’t worth as much as some buyers think.