Saturday, February 5, 2022

How to Cope When You Lose the Bidding War on Your Dream Home

 Our Guest Author Today: Matthew Schwimmer

Varying stacks of coins next to a toy wooden house













Perfect, ideal, dreamlike - these appear to be the words we chase throughout our lives. The tricky thing about them is they often lead to heartbreak. When the worst does happen, it can seem impossible to recover from. Still, if we were to peel away a few layers and scratch under the surface, we would realize that they are just words. Words we gave too much meaning to. Finding the picture-perfect house is an arduous journey; it takes a lot out of you. Reaching the finish line and having the rug pulled out from under your feet is a horrible experience. As you crash to the ground, so do your dreams. Or do they? See, the thing with words is, we misuse them. There is no one single perfect object but many semiprecious ones. It's never as bad as it may seem. Here is a quick guide on how to cope when you lose the bidding war on your dream home.


The Process of Grieving

Seems like a good place to start. Why? Simply because, even if you are the most well-grounded, rational, logically-oriented person in the world, you can't skip those feelings of anger and frustration. So, you should allow yourself to go through the five well-known stages. As you slug through denial, anger, bargaining, and depression, you will know you are one step closer to that all-important acceptance. The sooner you get there, the quicker you can get back on your feet. New houses await; new finish lines are calling to you. Just keep this in mind, there are many impressive houses out there. Yes, you missed out on one, but at the end of the day, you missed out on one. This first stage is crucial, as you need to be clear-headed to prepare for the subsequent phases.


The Learning Process

Mistakes are only helpful if we learn something from them. I understand that at this point, you might be asking yourself if you had misread the title and have entered into some kind of semi-hippy self-help section of the internet. Don't worry; you haven't! I just needed to get the philosophical parts of the recovery process out of the way first. See, in most cases, you will have utilized the services of an agent, especially if you are buying your first home. They helped you with the initial process of finding a home and making a bid. They can also help you now that the deal has fallen through. Ask them why it didn't work out. This knowledge will be crucial, as it means you can adjust your strategy accordingly. It could stop you from losing the bidding war next time round.


Books, letters, pencils, and a red apple on a desk







Life is one big learning experience, we never really leave the classroom, and the more we know, the wiser our actions will be







The Budget

Now we get to the more practical part. An excellent place to start is your price range. This is a good tip you can use at any time, but especially when inventory is low and you are looking at a 'seller's market'. You will always have several buyers competing for the same house in these cases, and a bidding war is almost unavoidable. It would help if you had some bidding power. You can acquire it by not looking at homes at the top of your budget. With these homes, you are already stretched to the limit. If it is expected that the house will sell, for example, at 10% over the initial asking price, you've already lost the battle. Leave a little leeway; give yourself some wiggle room. If you can offer 10% above the asking price and are bidding against others who are already at the top of their max budget, the math is on your side! Another aspect to consider is the purchasing power, which is fortunately not all that difficult to calculate.


A magnifying glass, a small house, and a piggy bank behind them









Never have a couple of toys so perfectly encapsulated the process; you need to find the perfect house in accordance with a realistic budget






Escalation Clause

This is a nifty little tool. It can seriously lower the chances of you being outbid. It essentially means you are offering to pay a certain sum above the highest bid the seller has received. In other words, you can't be taken out of the running so easily by the aforementioned pesky rug at the end of the finish line! Of course, you can set a limit, so the opposite doesn't happen, and you end up offering way above what you can realistically afford. You can also employ other tactics to make your offer more attractive. Getting a pre-approval is all the rage in 2022, and for a good reason.


How to Cope When You Lose the Bidding War on Your Dream Home? Heard of the 80-20 Rule?

This lovely rule ties in quite neatly with what I was talking about earlier, you know, when I seemed to be more concerned with the derivation of words and your outlook on life rather than buying homes. What the rule boils down to is that "no house is perfect." Say it with me; no house is perfect. So if you are already on evolutionmoving.com looking to get a quote for the move just because you think you've found a one-of-a-kind home, hold on for a just little while longer. In most cases, the most a home will fulfill is 80% of your requirements and wants. To be clear, this is a very substantial amount. Hence, the illusion of perfection. The problem is you think there are no more like it. Experience has taught us otherwise. See, the next home could have a different 80%, some features that the one you lost didn't. That could make it just as good, maybe even better. Furthermore, there are some home features you can recreate. If you saw something interesting, maybe think about how it could be implemented in a different house.


Pause

Let's have a breather. 

Better? Always helps when you slow things down. There is one more thing that could help. It's circumstantial, as someone under pressure to find a home doesn't have this luxury, but if you do, you can always wait for inventory to improve. If homes, especially good ones, are scarce, playing the waiting game for a bit could work to your advantage. In the meantime, you can always read up on why the housing supply remains relatively low and plan accordingly.


A cup with a spoon and buttons with the word pause written on them, representing how to cope when you lose the bidding war on your dream home




How to cope when you lose the bidding war on your dream home? Sometimes it's best to take a break and wait for things to settle a little





Let's Take a Step Back

We haven't touched upon the actual process of buying your first home. Now that you know how to handle the potential heartbreak of losing your first bidding war, which, I hope you now see, is not all that tragic, let's take a look at what comes before that. As a first-time buyer, there are many things for you to consider. There is a lot to do from the initial decision to a list of wants and needs, all the way through questions of financing, home inspections, and finding a good realtor. Therefore, if you are a first-time buyer, be sure you are ready for what lies ahead. The better prepared you are, the smoother the journey will be.


Closure

There you have it, how to cope when you lose the bidding war on your dream home! As you can see, it's not as bleak as it may have initially appeared; nothing in life ever is. Thought you were going to get out of this without a big philosophical ending, did you? Fat chance! It may be tiring, it may be frustrating, but once it's your turn to come out as the winner and you finally move into your new home, you'll see it was worth it. After all, it's not about the journey, but the destination, and what makes a home great are the people living there, not hardwood floors and ceramics!

 




Guest Author:

Matthew Schwimmer, Blogger and Writer

https://evolutionmoving.com



Pictures Used:

https://pixabay.com/photos/money-home-coin-investment-2724245 

https://unsplash.com/photos/OyCl7Y4y0Bk

https://unsplash.com/photos/NpTbVOkkom8

https://www.pexels.com/photo/keyboard-keys-in-a-bowl-8386425

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