Searching for your next home is an emotional process. It’s easy to fall in love with a house and think it’s the perfect place for your family to spend the coming years. When one or more other buyers feel the same thing, you may find yourself in a bidding war. If that happens, you should set aside your emotions as much as possible so you don’t make a decision that you’ll come to regret.
Emotions Can Lead to Overbidding
If you’re convinced that a particular house is “the one,” you may become so emotionally attached to the idea that it has to be yours that you keep raising your bid to “win.” If you submit the highest bid, your emotional reaction may come back to haunt you.
A lender won’t approve a mortgage for more than a house is worth. If you make a high offer and can’t get enough financing, you’ll have to come up with a larger down payment.
Even if you can get a mortgage, you may have to borrow more than you intended and wind up with monthly payments that will force you to stretch your budget more than you’re comfortable with. You may then struggle to cover other essentials and have little left over for entertainment, meals at restaurants and vacations.
Keep Your Emotions in Check
It can be easy to get emotional when you find a house that you consider ideal, and you’re worried that it might slip through your fingers. You’ll have to work hard to manage your emotions and make rational decisions.
Before you bid on any house, carefully assess your finances and figure out the absolute maximum you’re willing to pay. Hold firm to that number, no matter what. If you’re buying a home with a spouse or partner, make sure that you’re on the same page before you begin bidding.
In a hot seller’s market, you may lose out on a house you wanted, or even several. Losing a house to another buyer can make you feel discouraged. If it happens several times, you may become frustrated and determined to win the next house no matter what.
Try not to get discouraged if you don’t get the home you want. Other homes will come along, and you may find one that has all the features you’re looking for at a more affordable price.
Your real estate agent can help you manage the bidding process. Share your feelings and ask for advice on whether you should keep bidding on a particular house or walk away and keep looking.
Look at the Big Picture
Accept that frustration is part of the home-buying process. Stay focused on your ultimate goal: buying a house with the features you want in a desirable location at a price you can afford. It may take longer than you would like, but keeping a cool head and managing your emotions will pay off in the long run.