Buying your first home is not just a financial decision. It is a decision that involves some of your deepest emotions. Your mental images of “home,” “success,” and “family” can all become wrapped up in the process of purchasing your first house, and this aspect can interfere with your ability to make smart financial decisions. Here are just a few of the ways your emotions can complicate your home purchase:
The Home/Emotion Connection
Taking on a mortgage payment can loom as a huge responsibility. The pressure of making a good decision on a home can be overwhelming. The prospect of making a huge mistake can be paralyzing. Along with these emotions may be the satisfaction of having enough money to consider a home purchase, the desire to make the best decision for your family and the dream of having the home you always wanted. Combined, these pressures can create a dizzying array of emotional forces that can prevent you from thinking clearly about your home purchase.
House of Your Dreams
The top emotional issue you will have to overcome about purchasing your first home is getting the “house of your dreams.” Warren Buffet, top stock-picker in the United States for the past 50 years, warns homebuyers to choose a house they can more easily afford rather than the house of their dreams. Staying within their financial limit can make it easier for families to build their wealth in other ways, instead of struggling to pay for a home out of their price range. This sound advice will prevent the problem of being “house poor,” that is, spending a large percentage on your house and having little left for investment, education and other important items.
Always Looking For The Better Deal
Another problem that occurs with first-time homebuyers is failure to make an offer on an available property because you hope to get a better deal. This tactic can cause you to miss the chance to successfully purchase on an acceptable property, allowing another buyer to jump in to acquire the house at a higher price. If you find a house that fills your needs at a price you can afford, avoid delaying your decision. Someone else can come in and snatch it out from under you.
Beware the Short Sale
Since the mortgage crisis, a number of homes have come onto the real estate market as a “short sale.” A short sale is one whose price does not cover the previous owner’s indebtedness on the home. The lending institution that holds the lien on the property must agree to sell it at a reduced price in order to avoid foreclosure and holding it on their books. However, a short sale property is not necessarily a good deal for the new buyer. It may still be offered at a price that is above similar properties on the market. Buyers should research the neighbourhood and other homes sold in the area carefully before making an offer on the short sale house.
Lowballing Your Offer
Another mistake can occur when trying to get the property for the lowest price. If it is a desirable property in a popular area, other interested buyers will be willing to offer a higher price, and you will lose your chance to purchase the property. Keep your emotions in check, and don’t try to squeeze the seller too badly. Offer a realistic price, and you will be rewarded with an acceptance.
After seeing dozens of properties and, possibly, failing to have your offer accepted for a few of them, you may experience a feeling of househunting exhaustion, a sense of despair about finding the right house at the right price. The exasperation may make you agree to view homes that are completely unsuitable and may cause you to make a bad decision. Experts recommend taking a few days away from the search to re-think your needs and marshal your efforts. You can research properties online at JayneandMoss.co.uk. Then, ask your real estate agent to help you continue your search for the right house. Pace yourself carefully, and you will be able to withstand the arduous task of finding the right home.
Waiting For Answers
Sometimes, waiting for the sales agent to present your offer to the seller and for the seller to accept the offer can seem like torture. Getting the right parties together can often delay the process, and becoming impatient does not make it go any faster. Find ways to stay occupied in planning for your move and arranging your finances. The time will go faster if you do not focus on the laborious process.
If you understand that emotions can often be a factor in choosing your home, you can make the appropriate adjustments to your thinking to ensure you are able to make the smartest decisions for your needs.
Hudson Le Messurier works with clients trying to find their perfect property. He understands the emotional aspect of property buying and enjoys sharing his insights with an online audience. Hudson is a regular writer for a number of property and investment websites.