“It’s too hard for buyers these days! I’ll lose my mind if I lose another bidding war. Maybe I’ll just keep renting.”
Yep. Heard it. I feel your pain.
Another one comes up now and then, and I’ve heard it more often lately: “I don’t want to overpay! What if I pay too much?”
In the context of our explosive residential real estate market, those are understandable questions. Prices keep rising. Houses keep selling for above asking price. How much is too much?
There are a couple of quick answers. Things are worth what people will pay for them – so, technically speaking, you can’t really “overpay.” And, while we can’t predict the future, the smart money says things won’t go down – or even level off – any time soon. So, your house is likely a sound investment.
But there’s a more nuanced answer that I offer when I counsel nervous buyers. It involves life itself – above and beyond the purchase of a house.
Yes, a house is an investment, but it’s more than that. It’s the place where you live. And there’s a lot about living your life that really doesn’t involve dollars and cents. If you get too hung up on the money end of things, you may miss getting the house of your dreams.
I recently closed with buyers on a great house. Perfect for them and their young daughter. Like most buyers, they were working with a finite budget, and typically these days, we had been on the hunt for a long time. We were all getting pretty tired of the process when they beat out six other buyers by offering 7.5% above the asking price, a pass/fail inspection, and no appraisal contingency.
Celebration! A deal at last! And then the angst set in.
As it turned out, the house appraised for even more than contract price, but they were still nervous. “We don’t want to overpay for this house. Are we making a big mistake?”
There was still time to walk away on inspection issues, so we talked about it. I trotted out the advice I give buyers about value and getting what you want. This is about having the right place to live!
Can you see yourself chatting with your neighbors on the front porch? (This house has a fabulous front porch!) Can you see Thanksgiving dinner in the dining room? Have you located the spot for the Christmas tree? Can you see your daughter coming down stairs in her first prom dress? Yes, yes, yes, and yes. So, they bought the house.
Do you love the house? Can you afford the house? Buy the house! And rejoice!