When homebuying, the usual recommendations are to get pre-approved for financing, receive auto-notifications of new listings, see a lot of homes in person, and work with a good agent.
But once you get in the game, the frustration mounts. You’ve been looking at houses for months…or years…and don’t feel any closer to buying today than when you started.
What can you do?
Ways to Relieve Homebuyer Anxiety
Evaluate Your Willingness – You should consider all the facts, and decide if buying a home is for you. It is time-consuming, unpredictable, and sometimes sleazy. Because of the competition, buying a quality home today means you will most likely pay more than you are comfortable with – you will have to want it real bad.
Expand the Target Zone – Not only will you instantly have more homes to consider, but it also helps you evaluate how committed you are about staying in the old area.
Raise Your Price Target – Nobody wants you to drown in debt. But if you borrowed another $100,000 at 4% interest, your P&I payment would be $477/mo. higher. For those who are already at their max, dis-regard. But for those who can push higher, it is an option.
Buy a Fixer – The best way to better your chances. The ulgy old dogs may bark at traffic, but they are also chasing off most of the competition too. Don’t expect that the purchase price will reflect an adequate discount for the work though, just hope that it is close.
Don’t Expect Much From the Sellers – Expect to spend $25,000 to $50,000 on any house you buy. Most houses have defects, and you are going to have to live with a punch list of repair items with any house you buy. Their agent is telling them that the market is hot, and they don’t have to cater to your demands.
Influences – Gain the support of family and friends – if you have ‘experts’ around you who are constantly telling you that you are paying too much, or that prices will come down, it will undermine your confidence in crunch time.
Door-to-Door – The old needle-in-a-haystack search method, with a very low rate of success – but great exercise! One of the bidding-war losers at Manzanita canvassed the whole neighborhood with color flyers of them and their dog. Since then, two other sellers have listed in their price range.
Change Agents – This applies if you keep losing bidding wars – your agent doesn’t have the market awareness or strategies to win.
Add Mustard – If you want to get this over with, then go to the craziest-high price that you would ever pay for that house, and add $10,000.
Be patient – you are making a decision that might last you a lifetime.
Thanks, Jim! That’s very helpful as always!
Can you please cover one more buyer anxiety – this one’s personal for me? I think that, after the artificial supply suppression and/or institutional investors are gone, the prices will drop. However, I’m not sure how far. So, my fear is that the prices may drop too far, which will make my purchase decision a very bad one. This is especially valid for some investment properties I’m thinking to buy.
Would you be willing to publish some analysis related to that? I would really appreciate hearing your opinion on this topic.
JTR, I was also thinking about the “illusion of demand”. As both an investor and a house hunter, I see things from different points of view. The conclusion I have come to of late is that in many of the recent bidding war or multiple offer stuations, lets say 10 offers, most likely 7 or 8 of them are from speculators/investors/flippers, with only 2 or 3 from end users, and the end users more often than not get out bid. When this round of properties get shined up with marginal upgrades and are relisted to make a profit, will the end users still be there and will they be willing to (or more to the point, able to) pay the x+ the investor/speculator/flipper needs to make their profit?
Another way to alleviate buyer stress: