Buying a home can bring out a slough of emotions. It is a big decision, and there are many moving parts that must come together to make it happen. It’s both stressful and rewarding. You have looked forward to this for a long time and dreamed about it since you were a kid. It’s easy to get overwhelmed and make big decisions based on emotion, not logic. Here are several ways to keep your mind on track and keep things in check, so you make the most informed decision possible.
1. Choose the Right Realtor
Picking a Realtor because they are your friend, they are nice or will give you a discount, is not the best choice. Ensure that the agent you choose to work with has the knowledge necessary to protect you and get the job done efficiently and ethically.
Personal relationships are often get tested when the negotiations get difficult. People often choose to please their friends instead of being direct, even if it is detrimental to their situation. Also, if your friend is not performing you may have to fire them. Keep that in mind and keep it logical, not emotional.
2.Trust Your Realtor
There is a difference between a licensed real estate agent and a Realtor. A Realtor is a member of the National Association Realtors (NAR) and is held to a higher ethical standard than agents who are not apart of NAR.
Realtors look out for the best interest of their clients at all times. Remember, you put time into locating and deciding what Realtor was best for you. You logically analyzed several Realtors and decided that the one you have been working with was the best fit for you. Now, trust that they know their job and rely on their experience and knowledge of the market to navigate you through the purchase of your new home.
3. Get Pre-Qualified
Don't look at homes outside your price range or before you get pre-qualified. In today's market, if you tour a home and fall in love with it but you aren’t prequalified, you may lose out on the home. You will have to go back and get pre-qualified for a mortgage loan, which can take a couple business days. This delay allows other offers to be accepted on the property, and you could miss out on that home. This is more emotionally taxing than many buyers realize.
Additionally, if you look at homes outside your price range you will start to desire the homes and finishes they offer. When you then go look at homes you qualify for, it may be disappointing.
4. Remember the Seller is Emotional Too
When submitting offers, negotiating prices and terms with the seller, remember they are more emotionally attached to the home, too. They have lived in, updated and called this place their home. When submitting an offer, keep that in mind -- especially when submitting a low offer. If you offend the seller, they may refuse to even counter your offer or work with you on the price.
5. Prioritize Your Needs Not Wants
When looking at homes, don't get distracted by the granite countertops, hot tub, extra large garage or pool table the sellers plan on leaving. Prioritize your needs, and don't sacrifice those for your wants. The appeal of that hot tub will wear off in time, but the need for that extra bedroom will not.
6. Be Logical When Negotiating
When negotiating with a real estate offer, you need to keep it logical. It will allow you to get the best deal. First, identify what type of market you are in -- this is where the knowledge of your Realtor will really pay off. If you are in a market where homes are selling quickly and for a premium price, you might want to rethink offering a low price and asking for all closing costs. However, if the opposite is true and homes are sitting on the market for a while, you may have some room to negotiate. I see too many people lose a home purchase because they had a need to feel like they got a “deal” and offered far below my recommendation.
It is imperative to remove too many emotions, take your time, be logical in process and decision, and commit to what your true home necessities are in order for your investment decision to remain successful for years to come.
Matthew Lindsay is a Realtor, entrepreneur and owner of three companies. He is the CEO of Precision Home Group, and lives in Anchorage, Alaska with his wife and business partner, Alecia Lindsay.