I love working with first-time homebuyers. They’re excited, energetic, and always open to new ideas. I’ve been around the block a few times and have noticed a number of patterns that these buyers tend to go through. In this series of posts I’m going to do my best to identify these phonomenons and explain in real world context how they show themselves. Many first-time homebuyers that experience these phenomenons believe that they’re the only ones struggling with these issues. I assure you, you’re not the only one, nor will you be the last.
First-time Homebuyers and The One That Got Away
One of the most pronounced of these patterns is, “The One That Got Away,” Phenomenon. It’s something I’ve seen time, and time again. Nobody realizes how impactful this feeling can be until its too late. But don’t worry, while it hurts now there are a number a things you can do to recover and move on to the next offer.
Everyone starts with a desire to buy a home. Some have a specific idea of what they’re looking for, but most are keeping a open mind to all the possibilities. We typically start with a broad range of houses. Some townhouses, some single-family, some move-in ready, and some that need a little bit of work. We’ll expore a variety of areas around where the first-time homebuyer works and they’ll start getting a better feel for the neighborhoods. As time goes on they are able to better articulate what they like and more importantly, what they don’t like.
At this point we’ve narrowed down to a few neighborhoods and a few house models. They’re ready to put in an offer, if the right house comes on the market.
How it goes down
Shortly into the search process an email alert hits everybody’s inbox with today’s new inventory. Flipping through the new houses, there it was, everything on my client’s needs list AND wants list. It’s priced at the top of their budget, but for the items it checks off their list it was worth a look. We’d need to move FAST.
I pick up the phone and call my buyers, Gary and Vicky. “Did you see today’s new inventory?” I ask. “Yep, there was one that we were just about to call you about.” They respond. “1076 Fleet St?” I ask. I can hear the excitement in their voice, “Yeah! When do you think we can see it?” “We should get out there this afternoon. Properties like this do not frequently hit the market in this neighborhood. If we want a shot at an offer it’ll need to be tonight.” “Sounds like a plan,” and we hang up the phone.
Falling in Love
Pulling up to the house in Reisterstown you could tell they were in love. It had the sitting porch that Vicky wanted and the garage space that Gary needed for his motorcycle. The windows boasted barnyard shutters, the kind you only see on Pintrest, and a red front door that contrasted nicely with the new grey siding. You could tell that the sellers were proud owners and had maintained the house meticulously.
Inside was a country style foyer with a tasteful welcome sign, a nice touch that I started recommending to my sellers. The kitchen and bathrooms were original to the house, but since it was built in 1998 everything was in great shape. Walking onto the second story deck we were taken back by the perfection of the yard. We knew it had backed up to woods from the pictures, but photos did not do it justice. “I want this house,” Gary exclaimed. “I do to,” Vicky remarked.
After walking the rest of the house there was no questioning, my buyers wanted this house. Pulling out of the driveway we saw another couple with a Realtor I recognized walking towards the house. I rolled down the window, waved, exchanged a few lighthearted greetings, and then we were on our way. “This property is going to be competitive,” I think to myself.
The Internal Dialog
When we get back to the office I show them the comparable sales in the neighborhood. The house was well priced. The property was price $5k under what any other house on the street has sold for in the past year. From the pictures I could tell that it also showed the best. Knowing that there would be a surplus of buyers looking at this property I recommended they they put in a full price offer. If we pushed hard enough with our initial offer we might be able to get the property off the market before other buyers entered the offer pool. I advised them on my experience with competitive properties in the neighborhood and gave the reasoning behind my recommendation.
The thought about it for a few minutes, “I don’t know. We feel like we just started looking a few weeks ago and we don’t want to be too antsy.” “Hey, that’s no problem,” I replied, “It’s important they you guys are fully comfortable with any decision that is made, remember I’m hear to work on your behalf and whatever decision you make will be the right decision.”
Although they loved the house, they decided to roll the dice and put their bid in $10k under list price. When the listing agent got back to us that they had multiple offers they decided to stay with their original bid. “Best and final. However it goes, it goes.”
The next morning I got the call. The sellers had decided to go with another, higher offer. I relayed the information to my buyers, who where surprisingly composed about the loss of their dream property. “We have plenty of time ,” they reasoned, “This one didn’t work out but there are plenty of fish in the sea.”
Nothing helps you get over a first-time homebuyer heartbreak faster than getting back on the horse. Later that week I scheduled a handful of new showing around the area that the house on Fleet was located. After walking through the first showing I could tell something wasn’t right. They weren’t nearly as excited as they had been earlier in our search.
“Everything all right guys? You both seem a little bummed out.” “Just disappointed about how Fleet St turned out. Looking at these other houses just makes us think about how much we like Fleet St. We just feel like it’s the one that got away.”
What do we do now?
Everybody hates the feeling of rejection, especially when there is so much on the line. All of these emotions you’re feeling are just that, emotions. Yes, agreed, buying a house is filled with emotional decisions and that’s why it’s so important to make sure the right side of the brain has equal input into what’s driving the search.
Truely Prioritize Your Wants and Needs
In the age of HGTV it’s difficult to not want it all. Granite counter tops, open concept kitchens, and trendy paint colors are all great features, but how many do you truly need right away? Is it really worth sacrificing location so that you can have updated bathrooms? Maybe, maybe not, but these are all questions you should sit down and truly ask yourself before looking at more houses.
I recommend index cards for this exercise. You can sit down and have each person fill out the cards with their wants and needs. This allows you to discus and easily re-organize as you explore what you both are truly looking for in a house.
Remember, as your first house you should be looking for a house that satisfies your midterm needs (6-15 years). Rarely will one house fit all your needs forever and it’s better to stay within budget than trying to guess what you’ll need 20-30 years from now.
Don’t Give Up!
I know things feel like the end of the world right now, but there’s still hope. You’re not the only person to go through this and every first-time homebuyer that sticks with the process eventually finds a house that they love equally, if not better. It may not be this week, or the next week, but sometime in the near future a house is going to go on the market that made you feel the same way and this time you’ll be ready to lock down the contract.