The dangers of falling in love with a house you’re buying

by Chris Lang on August 23, 2012

House you love

In an ideal world buying a house would be a very pleasant and positive experience. Many will agree that a home is the most important place in the world, and as such shouldn’t be associated with any negative thoughts.

However…

The process of buying a home quite often is far from being peaceful and enjoyable, and it’s important that you, as a buyer, are aware of ways how you can make it easier on yourself, or at least how you can avoid making it worse.

Which brings me to the main point of this post:

Whatever you do, DO NOT FALL IN LOVE with a home you’re intending to buy.

This may sound counter-intuitive – “I am buying a home to live in for many happy years, why shouldn’t I fall in love with it?” – well, for a few very good reasons.

1. Objective understanding of the property value

Love is blind, and falling in love with a house makes you blind to all of its flaws. There is no such thing as the perfect house; any house has good sides and bad sides. Not seeing the flaws early means you’re not taking them into account when deciding how much you should pay. You won’t be able to objectively compare the house you fell in love with to the other houses you could purchase in the same price range.

2. Your negotiating power.

As soon as you fall in love with a house, you lose all negotiating power because to you it becomes a house you must have. At any cost. And then you may find yourself bending over backwards to grant the vendor their every wish, and compromising on your own interests. This could include

– offering a settlement date that might be inconvenient for you, just to keep the vendor happy. If you have to break a term deposit earlier for that, bang, you lost some money you could have saved.

– paying a bigger deposit than you could have, out of fear of not securing that house – again, this may result in a monetary loss.

– not putting clauses in the contract of sale you really should have – such as a special conditions of getting the building and pest inspections done.

Sometimes in the process of negotiating a house purchase it is important to make your offer, and then if they don’t accept it straight away – appear reluctant to offer any more. If there is no real competition, increasing your offer as soon as the vendor says ‘No’ means you compete with yourself – and then guess who will lose. If you just sit and wait, the vendor may get back to you with a counter offer, ready to negotiate – but you must allow some time to let that happen. If you’re so afraid to lose the house there’s a risk you will jump ahead with a higher offer before the vendor has had time to come back to you and offer to drop their asking price.

3. The house price

It is crucial to know your “walk-away price”, but to know one – you’ve got to have one. The walk-away price is the highest price you’re prepared to pay, and if the vendor asks for more, you walk away. With a house you fell in love with, you will find it very difficult to set a walk-away price, just because you want it so badly. Such situation can easily lead to paying a lot more than you otherwise would have – just because your fear of losing the house dictates your irrational behavior and disrupts the process of negotiation.

Did you ever fall in love with a house you wanted to buy? We want to know – leave a comment, tell your story.

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