Almost every purchase has emotions tied to it. A certain dress can make you feel special when you buy it. Ordering food at a favorite restaurant can bring on nostalgia. But when we are talking about emotions in purchases, buying a home is, perhaps, one of the most emotional purchases you can make.
Each buyer will go through three stages until they are ready and willing to write a fair offer for a home. These stages are
Change Pain Motivation
Reality of Market
People are most motivated by pain in their current situation and less motivated by potential gains. In real estate, this means that someone is more likely to move because they are outgrowing their home (a pain to live in a small space) than they are to move for a pleasant view (gain). These change pain motivations are not typically actually painful, but more uncomfortable. If you’re getting married, if would be uncomfortable to stay in your old place with your new spouse. If you’re having a baby in a 500 sq ft studio apartment, it would be uncomfortable to fit all your baby items in it. These pains motivate you to want to buy a home.
Once you’re motivated, you start looking at the market. If it’s your first home, you’ll likely be galled at the cost to own a home. After all, if you’re used to paying $500 a month in rent and you find out a modest home goes for $250,000, it can be quite a shock. Many people buying their second or third home compare current home prices to what homes cost when they shopped the first time. This, too, can come as a shock when they realize that they can’t get as much for $300,000 as they could have 10 years ago.
Once a buyer has had a pain to motivate them to make a change and has looked at homes in the market and accepted those prices, they meet with a lender to see what they can qualify for. Here, some people meet with frustrations as they realize they can’t spend as much on a home as they want to. It’s unusual for a buyer to meet with a lender and end up being qualified for more than they want to spend.
If you’ve made it through these steps and mentally been able to accept the prices of homes as well as what you can afford, you’ll be prepared to make an offer to buy a home. Sometimes buyers don’t make it all the way through these steps before making offers, like when a buyer hasn’t accepted the current home prices, and they get it in their head that they can super low-ball a seller to the buyer’s advantage. (We are talking about a $500,000 home where the buyer offers $380,000. Let me assure you that these types of offers never go well for the buyer).
If you’re looking for a Realtor to help you through these steps, feel free to contact me!