Housing prices are beginning to stabilize, at least they're no longer going straight up; and buyers are becoming more cautious with their purchases. By more cautious, I mean, they are returning back to carefully reviewing the choices available to them and only buying a home that they want and makes sense for them. Being cautious when making one of, if not the, largest financial decision of your life is not only good, but also "normal". We would expect that someone spending that kind of money or going into that kind of debt, to want to be certain.
The market is slowly beginning to find some balance. More housing is still desperately needed, and we won't find true balance without it. But thankfully, buyers are no longer fighting battles over homes they don't even truly want; however, when a house comes available that appeals to a wide range of buyers, we are still seeing multiple offers. When this happens, my buyer clients look to me for my advice regarding what to offer. We discuss any potential challenges from a resale point of view and what I think the house is current worth, and what a buyer will be willing to pay for it.
But then I remind them that just because a buyer is willing to pay that, it doesn't mean that buyer needs to be them. Because ultimately, only you can decide what a particular property is worth to you.
The Temptation to Win Versus Actual Satisfaction
Some of us simply have more competitive personalities and others have lost too many houses to other buyers over the last few months or years. Regardless of why, it can be tempting to want to win at all costs. It can be easy to get caught up with trying to beat out other buyers; but this is not like "winning" the last pair of concert tickets. This housing game usually ends with a prize of a few hundred thousand dollars (or more) in debt. And yes, of course, a house too. But still, the worst thing that can happen to you is winning and ultimately feeling disappointment.
Purchasing a house to be yours is obviously a financial experience, but it is also an emotional one. When I tell buyers what I think someone will be willing to pay in this market, I also am sure to ask them to think about how they would feel if they were that buyer and how they would feel if that offer was accepted. Would they be excited? Would they feel sad, or perhaps even worried that they had paid too much? If the response is closer to the latter, then that's not the right offer amount or the right house for them, in the end.
The Ultimate Takeaway
If there's a house that you love or even just a house that suits your needs for the five to seven years and is within your budget, then make the best offer you can financially. But never offer more than you're comfortable with the seller saying yes to. In the end, I can tell you the worth of a home, but only you hold the power to decide if it's worth that to you.