Buying a home is likely the most expensive purchase you will ever make, also, it is likely one of the most emotional purchases you will ever make. Our feelings can strongly influence our financial decisions; and with something as huge as purchasing your first home, you will want to take care that they don’t steer you in the wrong direction.
Typically, the emotional phases of buying a home go something like this.
This will cost me how much? My down payment will have to be how big?! Read panic. You pour over budgets, calculators, and spreadsheets.
I think I need help. Admitting you need help is the first step. But we are not talking about an intervention, it is time to find an expert in the form of a real estate agent. You become the ultimate investigator to find your perfect home buying guru.
Shopping on a whole new level. It can be thrilling to tour homes and envision yourself filling up the rooms and decorating the space. Weigh the pros and cons, but also enjoy it. Hello HGTV.
The negotiations. It can feel like a high stakes battle of wills making counteroffers and hoping that your number will be accepted. Thankfully, your agent should help you out.
The honeymoon phase. You will likely be asking yourself “is this for real?”. You are officially a homeowner. Live it up and post a picture on social media, after you sign on the dotted line of course.
Emotional Temptations to Recognize
Emotions are great, they help guide us through many decisions in life. However, as wonderful as it may seem to operate purely out of emotion, you need to remain rational when purchasing your first home. Here are a few scenarios where your feelings could get the better of you.
You had me at first walkthrough. It is no secret that many home buyers want to fall in love, not just be sold a home based on the specs sheet. Turn on any real estate based television show and you will see plenty of individuals turning down homes because the paint color doesn’t match the wall color of their dream home.
However, when, and if, you do stumble upon that unicorn of a house don’t immediately sign the papers. If you sign off on the first home you see you could easily be overpaying, overlooking drawbacks, and setting yourself up for buyer's remorse.
Holding out for a better deal. On the other end of the spectrum is never being able to settle, and honestly, in most instances, you will have to settle in some aspect. Unless you are building your first home, there will probably be something about the property that you don’t like.
Because of this, it might be tempting to pass it up for a better home at a better price. The housing market indeed has its ups and downs, but you might not want to pass up the home that checks off most of your list in the hopes that the price will come down or you will find a better deal.
The housing market can be notoriously difficult to predict and sadly once an offer is made on a home by another buyer, you probably won’t get a second chance. Unlike shopping for furniture or appliances, there is only one of each home so it may not be the best idea to play the odds.
Lowballing instead of playing ball. Real estate transactions often bring out the emotion in both the buyer and the seller. Each party is out to get the best transaction for themselves. Because of this, you might make rash decisions if you feel that the seller's listing price is absurdly high.
But when tempers flare it is not the ideal moment to make a low counteroffer, just to let them know how silly you think their price is. This may result in an annoyed seller, an outright rejection, or drawn-out negotiations. You want to be level headed and negotiate firmly, not irrationally.
Paying too much for your ideal. In the previous two scenarios, homebuyers wanted to spend the least amount of money possible. But what happens if you walk through a home, absolutely love it and find out that it is way out of your budget?
The answer is not, “buy it anyway”. It is so disheartening to view a home and fall in love only to learn that you can’t afford it; though you don’t want emotions to lure you into thinking you can afford it either. It isn’t a good idea to financially overextend yourself just because you become emotionally attached.
How To Keep a Level Head
Review the emotions that are fueling your decisions in buying a first home. In many cases, they are a combination of the following.
Hope. Can you envision yourself living in the home? Does moving into a home mean that you can start a family or adopt a pet? Placing all of your hopes and dreams for the future on your home purchase can influence financial decisions.
Pain or annoyance. If you have to get away from the downstairs neighbors or you can't take the 3 am train rumbling through anymore, these factors can drive you to make a purchase much sooner than is ideal.
Fear or anxiety. Instead of thinking buy, buy, buy you have a hard time making an offer. What if the price drops tomorrow? What if you find a home that you like better? The what-ifs can delay purchasing a home inevitably.
The market. This one isn’t really an emotion, but it can set your emotions on edge. If the market is in a time of huge fluctuations or if it is a buyers market in which homes are selling like hotcakes, you can face extreme pressure and so can your wallet.
After you have pondered your feelings, it is time to get started on the purchasing process. With the help of a partner, family, friends, and possibly a real estate agent, hopefully, you will be a homeowner in no time!
And away we go
This is the beginning of a beautifull friendship. In the meantime, are you curious to know what emotions drive your spending? Take our quiz to find out