3 Mistakes Buyers Make
When it comes to real estate, sometimes the biggest blunder a buyer can make is to ignore what is really happening in the market and instead focus on the things you may wish to be true. It’s understand-able—a home will likely be the biggest investment you make, and that means you want everything to be perfect.
But when the market is hot and you have a goal or a timeline, engaging in wishful thinking is not just foolhardy—it can be down-right costly. Here are three common, costly buyer mistakes that often arise when the market is hot, offers are plentiful and prices are rising and what you can do to avoid them
1. Wishing the house was in a different neighborhood.
It’s a tale as old as time: A buyer has seen two-dozen houses and put in a dozen offers. No dice. The buyer’s agent keeps pushing to look in a lower price range, assuring them that they can find the buyer what they want. And the agent delivers. A safe neighborhood, good school district, good commute to work—but not in the hot neighborhood the buyer is dying to get into.
Wishing that you could pick the place up and set it back down in your desired neighborhood will not make it so, no matter how many times you say it. The reality is that when you have been outbid a double-digit number of times, something about your approach is not working. You either have to downgrade your specs in terms of the property you seek. You may need to look for something smaller or in less-pristine condition or you may need to shift your location criteria –and that can mean a neighborhood change.
When markets are hot, it’s the most desirable neighborhoods where the competition among buyers and bidding wars are the most intense. If you’re not prepared to house hunt for homes at a price lower than your top dollar, or if there simply are no homes in that neighborhood listed below your top dollar, you might need to face the reality check that you simply can’t afford to buy in that neighborhood now.
Stop wishing the home you can afford were in a different neighborhood, because if it were, chances are, you wouldn’t be able to afford it! Understand that you’ll be able to level-up your neighborhoods as time goes on and you buy your next home and don’t let your inflexibility paralyze your house hunt so long that prices all over town rise even more.
2. Hoping that perfect house gets no other offers, even though every other house you’ve bid on has had 54.
There’s a fine line between wishing something were true and denying the reality of what actually is true. Facing reality, even when it’s painful, allows you to make your own action plan for getting the best possible results with the resources you have–or a plan for getting more resources, whichever route you choose to go.
As a buyer in a seller’s market, it’s ultimately up to you and only you how much you offer on a home. But if you wield your weighty decision-making power to make lowball or at-asking offers in situations where you are virtually guaranteed to run into high levels of competition, that’s a poor use of your powers. Not only do you set yourself up for failure, you will often add to the demotivating, depressing, discouraging momentum of the times when you get overbid despite giving it your legitimate best efforts. That frustration often leads to analysis and calling a house hunting time-out. And that, in turn, often leads to buying at a time when prices are even higher, and getting ultimately even less home for your money.
3. Wishing prices weren’t going up so fast.
Here’s the deal: when prices were flat or falling, buyers were (understandably) stressed at the prospect of buying a depreciating asset. Now that they’re ascending, it’s not at all uncommon to hear buyers bemoan that, too. But, the moment escrow closes, the fact that prices are rising, and fast, will shift in your mind’s eye from curse to blessing.
Rising prices and a recovering market might be what emboldened you to buy, empowered you to sell a formerly underwater home, and certainly have been inextricably intertwined with the increase in jobs. If prices weren’t rising, many of these other things might not be materializing, either, and that wouldn’t be so great.
Wishing prices weren’t going up so fast contributes to a costly form of denial—denial of the reality that they are. This can cause buyers to persist in making lowball offers and wasting their precious time on homes they can’t compete for within in their budget range, all while their smart targets are appreciating rapidly—and that’s how people get priced out of the market, right under their noses.
Don’t let your home-buyer dreams fall prey to this costly wish-based pitfall. Work with your agent to stay in the loop about how prices are trending throughout your house hunt, and use that knowledge to power your decision-making about what price range to house hunt in and what price to offer for target properties.
When it comes to real estate, sometimes the biggest blunder a buyer can make is to ignore what is really happening in the market and instead focus on the things you may wish to be true. It’s understand-able—a home will likely be the biggest investment you make, and that means you want everything to be perfect.
But when the market is hot and you have a goal or a timeline, engaging in wishful thinking is not just foolhardy—it can be down-right costly. Here are three common, costly buyer mistakes that often arise when the market is hot, offers are plentiful and prices are rising and what you can do to avoid them
1. Wishing the house was in a different neighborhood.
It’s a tale as old as time: A buyer has seen two-dozen houses and put in a dozen offers. No dice. The buyer’s agent keeps pushing to look in a lower price range, assuring them that they can find the buyer what they want. And the agent delivers. A safe neighborhood, good school district, good commute to work—but not in the hot neighborhood the buyer is dying to get into.
Wishing that you could pick the place up and set it back down in your desired neighborhood will not make it so, no matter how many times you say it. The reality is that when you have been outbid a double-digit number of times, something about your approach is not working. You either have to downgrade your specs in terms of the property you seek. You may need to look for something smaller or in less-pristine condition or you may need to shift your location criteria –and that can mean a neighborhood change.
When markets are hot, it’s the most desirable neighborhoods where the competition among buyers and bidding wars are the most intense. If you’re not prepared to house hunt for homes at a price lower than your top dollar, or if there simply are no homes in that neighborhood listed below your top dollar, you might need to face the reality check that you simply can’t afford to buy in that neighborhood now.
Stop wishing the home you can afford were in a different neighborhood, because if it were, chances are, you wouldn’t be able to afford it! Understand that you’ll be able to level-up your neighborhoods as time goes on and you buy your next home and don’t let your inflexibility paralyze your house hunt so long that prices all over town rise even more.
2. Hoping that perfect house gets no other offers, even though every other house you’ve bid on has had 54.
There’s a fine line between wishing something were true and denying the reality of what actually is true. Facing reality, even when it’s painful, allows you to make your own action plan for getting the best possible results with the resources you have–or a plan for getting more resources, whichever route you choose to go.
As a buyer in a seller’s market, it’s ultimately up to you and only you how much you offer on a home. But if you wield your weighty decision-making power to make lowball or at-asking offers in situations where you are virtually guaranteed to run into high levels of competition, that’s a poor use of your powers. Not only do you set yourself up for failure, you will often add to the demotivating, depressing, discouraging momentum of the times when you get overbid despite giving it your legitimate best efforts. That frustration often leads to analysis and calling a house hunting time-out. And that, in turn, often leads to buying at a time when prices are even higher, and getting ultimately even less home for your money.
3. Wishing prices weren’t going up so fast.
Here’s the deal: when prices were flat or falling, buyers were (understandably) stressed at the prospect of buying a depreciating asset. Now that they’re ascending, it’s not at all uncommon to hear buyers bemoan that, too. But, the moment escrow closes, the fact that prices are rising, and fast, will shift in your mind’s eye from curse to blessing.
Rising prices and a recovering market might be what emboldened you to buy, empowered you to sell a formerly underwater home, and certainly have been inextricably intertwined with the increase in jobs. If prices weren’t rising, many of these other things might not be materializing, either, and that wouldn’t be so great.
Wishing prices weren’t going up so fast contributes to a costly form of denial—denial of the reality that they are. This can cause buyers to persist in making lowball offers and wasting their precious time on homes they can’t compete for within in their budget range, all while their smart targets are appreciating rapidly—and that’s how people get priced out of the market, right under their noses.
Don’t let your home-buyer dreams fall prey to this costly wish-based pitfall. Work with your agent to stay in the loop about how prices are trending throughout your house hunt, and use that knowledge to power your decision-making about what price range to house hunt in and what price to offer for target properties.