Everyone loves a good deal. But when it comes to real estate, most buyers and sellers are just trying to avoid making a big mistake.
Buying a home is not something most of us do on a regular basis. There’s no way to practice before you jump in, and you have to live with your final decision for years. So concerns about making a mistake are valid and understandable.
One of the most common fears for buyers is overpaying for a home. Fear of falling in love with a property and paying more than you need to, or being talked into a price you didn’t want to pay by an over-zealous salesperson or a seller with more experience at negotiating.
Fear of overpaying often leads to a whole lot of sitting on the fence and paralysis by analysis. Which inevitably leads to frustration, time-wasting and a distinct lack of home ownership.
Here are a few thoughts on how to manage the fear of overpaying…
Consult. Consult. Consult.
Fear feeds on the unknown. If you feel unsure, it may be a sign you need to seek more information. Talk to knowledgeable, impartial people. This could include friends that have recently bought a home, real estate salespeople that aren’t involved in your present transaction, a local valuer whose opinion you trust, or an experienced property investor.
Just be sure to talk to people who are active in the market.
Buy with emotion. Justify with logic.
We choose a home to buy based on feel, but once you’ve found the one you love, it’s time to justify your price decision with research. Do your homework by checking out recent comparable sales. Drive past them, search for interior photos online, decide how they compare to the home you are trying to buy and use that information to help you decide on a fair price to offer.
Consider your time horizon
The vast majority of property prices look like incredible value for money 10 years in the future. So keep in mind that if you plan on staying in this home for a while, there’s a good chance you’ll look back on the price you paid and wish you had bought two.
Buy a home or don’t buy a home. But don’t sit on the fence.
There is no perfect time to buy. The market could always go up or down from here. And no one ever really knows what’s going to happen.
The benefit of buying in a slower market is that you’ll have more houses to choose from, more time to make conditional offers, and more opportunities to negotiate with owners.
The benefit of buying a hot market is that you’ll have all sorts of social proof from other buyers reassuring your decision.
Which one to choose?
The right time to buy isn’t when it’s a hot market or a down market. The right time to buy is when it’s right for you.
Once you’ve decided to take the plunge, commit to it and get on with making it happen. If you go back and forth changing your mind on whether now is a good time or not, you’ll frustrate loved ones, and add stress to your life trying to solve one of those unanswerable problems we pose to our subconscious all too often.
Sitting on the fence is overrated. Unless it’s your own fence, outside a home you’ve just bought. One that you love, but paid a fair price for based on thorough market research 🙂