One of the hardest things to do when buying a home in a hot market is to keep your cool and make a smart housing investment.
The process can feel aggravating, especially if you’ve placed numerous offers that were never accepted. Right now, it’s becoming increasingly common to lose out on the house you want due to the high volume of competition. I’m sharing some advice on how to avoid getting caught up in the often stressful process of finding a home so that you can make a good investment when you decide to buy.
Pump the brakes (but hit the gas when you need to). If you find yourself getting caught up in the details and the emotions of the home buying process, you should probably step back, examine the situation and make sure you’re going in the direction you want. A good way to do this is to make a detailed list of exactly what you’re looking for in a house. That way when you get caught up in the emotions of a bidding war, you’ll be able to look at the list you made and decide to pump the brakes and hold back, or to hit the gas and move forward if the house checks every box.
Trust your Realtor®. Your Realtor should always have your best interests in mind and be able to give you the advice you need to help you get the home you want…without overpaying for it. Recently, I had a client who fell in love with a home and was willing to pay full asking price to ensure he got it, even though I told him it was likely $10 – 15,000 over priced. As his Realtor, it was my duty to tell him he was overpaying for the house and that it just wasn’t worth the value. Whether or not you decide to take my advice is up to you, but a good Realtor will always give you the facts, regardless of whether or not you want to hear them.
There are always other houses. I’ve found that a lot of people get caught up in the bidding war and often forget about another house that might be (literally) around the corner. If you’ve come across a house that is a hot deal and lots of buyers are clamouring to purchase it, you might be better off looking at another, even slightly more expensive house in the neighbourhood that is less popular. In the end, the cheaper, more popular house might create a bidding war which drives the price up, whereas you might be able to negotiate a better deal for the less popular house. Even if the house might not initially seem like a hot deal, when the dust settles, it could be a better deal after all.
Remember, you will find the house you love eventually. New houses come on the market every day and it’s important not to settle or make a poor investment just for the sake of buying a house. It’s usually inevitable that you will fall in love with the house you put an offer on, but if it falls through due to a bidding war or another reason, don’t get discouraged. I find that clients who end up with a different house are always happier than with the one they lost out on in a bidding war. You might even luck out and end up spending less money on it or putting less work into it.
Although it is easier said than done when it comes to separating yourself from the emotions of purchasing a home, it’s important to keep in mind that buying a home is a process. The best advice I can offer to anyone is to try as hard as you can to not get emotionally attached to a home until you get an accepted offer on paper.
Do you have more questions about making a smart housing decision during a hot housing market? Let me know and I’d be happy to help!Posted by Greg Dewar on