Most real estate agents would agree that homebuyers make emotional mistakes with frequency, be it via overpaying for their dream homes or passing up on great opportunities in the hopes that they’ll find a better deal. These emotional mistakes are the result of letting feelings cloud judgement, and while it’s expected that emotions will play a role in how a homebuyer approaches the process, they shouldn’t dominate the decision-making process itself.
Here are the top emotional mistakes made by homebuyers:
Always Looking for a Better Deal
For whatever reason, today’s market has conditioned homebuyers to believe that there’s always a better deal just around the corner. While prices could drop further (and mortgage rates do decline), you don’t want to play the odds when it comes to buying your home. Even in the best of markets, you can’t predict what will happen tomorrow. Homebuyers need to understand that market fluctuations are part and parcel of real estate transactions, and that they shouldn’t approach the homebuying process as though they know what will happen next.
Falling in Love at First Sight
When it comes to real estate, the concept of “love at first sight” should be avoided at all costs. As a rule of thumb, be sure to look at no less than five properties before signing any contracts, as it’ll bring you perspective on each home you visit. By jumping on the first or second home you see, you’ll likely find yourself having buyer’s remorse in short order, overpaying, or being unable to sell at a reasonable price down the line. Infatuated buyers often overlook the value of the process itself, which shouldn’t be underestimated.
Overpaying for Perfection
I’ve never met a buyer who didn’t want the perfect home, but unfortunately, it doesn’t exist. On the remote chance that a buyer does find a home that nears perfection, the emotional attachment often makes them inclined to spend beyond what is reasonable to make sure they get it, and even if they’re not overpaying, they might have difficulty selling the home down the road. To avoid losing money when you sell, you need to consider an exit strategy from the beginning, and it can be difficult to envision how the home could be sold if you’re jumping into it without perspective.
Equating “Short Sale” with “Deal”
It’s quite common to see a buyer running into the trap of buying a foreclosure or short sale, thinking they’re buying below market value, when in fact they’re overpaying. A good deal is a matter of the property’s historic price, current market conditions, and the home’s features, and it can be tough to weigh all of the factors. Your chances of making an emotional mistake are greatly diminished by working with a professional who knows the local market, so make sure you hire a local agent to avoid making mistakes like jumping on “short sales.”
Lowballing Instead of Negotiating Realistically
All homebuyers want to purchase a home at the lowest possible price, but there’s a notable difference between firm negotiating and lowballing. Generally speaking, you’re best served making a realistic bid not too far off from where you would ultimately like to end up, as lowball offers run the risk of being rejected out of hand or lengthening the process and annoying the sellers. Either way, you’ll run a big risk of losing the property if you lowball, so be realistic in your negotiations.
Source: Bankrate