In a real estate transaction, getting emotional will only get people into trouble. It’s hard, because buying or selling a home is the biggest single purchase of most people’s lives. A home is more than just a possession; it is at the center of our lives, the base of lifestyle that plays a strong part in our sense of identity. An investment that big and that far reaching is extremely personal. Despite this, real estate is business, and a sales contract is a contract; keep these things in the front of your mind and push emotion to the back seat. Otherwise, you could fall prey to emotion-driven mistakes.
Buyers are looking for a home they can fall in love with: the perfect dream home. Finding that home, however, can put buyers into a self-imposed emotional blackmail. Finding the perfect home and loving that home could lead emotional buyers into unwise decisions and desperate tactics; paying too much and getting too little in relation to the home’s market value. Loving a home can also blind a buyer to flaws or genuine problems that need to be addressed. Make sure to get a full detailed inspection and scrutinize even the most ideal home; go see several other similar properties and make realistic comparisons. Set a limit to what you will (or can) reasonably pay for any property and stick with it – be prepared to walk away from, or lose, that “perfect” home and find another. Your agent can help you see through the love to the concrete business decisions and work as your advocate to make sure you don’t get burned as you pursue your dream home.
Other emotional home buyers suffer from the opposite of falling in love with a home: they fall in love with the ideal of a home, or the search itself. These buyers are certain that a better home will come on the market tomorrow and hesitate to commit to any offers, no matter how good a home might be. By focusing on the “what ifs” and obsessing over an imaginary property, they lose sight of the properties that actually exist before them and miss out on what may be the best opportunities in the hope of something better. Others let other factors, such as a foreclosure or short-sale, convince them they are getting a deal when they aren’t. Get your agent to help you understand the market and make realistic estimations of what is and will be available within your home-hunting time frame and what these things are worth ( both now and in future market estimations). Compare available properties to your needs first, then your wants, and only last your dreams, and realistically determine if a home fits or can be made to fit your lifestyle goals. Also consider the current and future market prospects of a home, neighborhood, or larger market area to decide if an imperfect option could still be the best choice.
We may be in a buyer’s market, but emotional buyers can push way too far and alienate sellers past the point of negotiations. Deal-driven buyers feel that they can always get more for less, sometimes seeing more options out there than there actually are and imagining they can strong-arm any seller into a bad deal. Remember that the market is always changing, and while conditions still favor buyers, some areas are shifting faster than others toward equilibrium or even to seller’s advantage. If you feel a property is priced too high, talk with your agent; it may simply be your desires talking, wanting to get more home than you can afford. Get a realistic understanding of the market and don’t try to push past the range of your budget. When you offer on a home, let your agent advise you to find a reasonable low offer to start a negotiation, and determine just how much you can push for a deal. Remember that lowballing can cause a seller to reject you offhand, or drag out negotiations to allow other buyers an opportunity to outbid you. Trying to force a laundry-list of concessions, repairs, or upgrades can also end negotiations. Be prepared to compromise with the seller on some issues and pay close to market-value on a worthwhile property.
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About David Goldstein — David Goldstein is an Owner and Founding Partner of Colibri Real Estate, LLC. which operates online education providers Colibri Real Estate, Insurance License Express and License Tutor. Follow him on Twitter.