Whether you’re working on purchasing your very first home, selling the house your kids grew up in, or changing locations thanks to a career shift, buying and selling real estate can have powerful emotional impacts. At the same time, staying level-headed throughout each step of a real estate transaction is crucial for your long-term happiness and financial health. Learn about the importance and challenges of staying level-headed throughout the buying or selling process, and find out how to best prepare.
The Importance of Level-Headedness in Real Estate
Regardless of whether you’re purchasing your first home or selling your fourth, real estate transactions are often the largest financial decisions the average person will make in their lifetime. While there will always be emotional input when it comes to choosing a new place to live or saying goodbye to an old home, it’s crucial to also keep a firm grasp on logic and your long-term goals throughout the process.
For example, it’s all too easy for a buyer to fall in love with a home after a great showing. Visiting homes on the market entails picturing your everyday life there, imagining yourself and your kids in each bedroom, and dreaming up all the meals you’ll cook in the kitchen someday. If you’ve fallen in love with a home and then your agent makes a call and learns that existing offers on the home are far outside of the list price and way over your budget, it’s tempting to convince yourself that stretching your budget would be okay, and to make an offer that won’t align with your financial goals in the long term. In this case, a preliminary emotional attachment to a home can result in getting stuck with higher monthly payments than you’re truly comfortable with.
Likewise, at various points during a real estate transaction, sellers can be presented with requests for credits or repairs to their home. It’s easy to feel defensive of your home and let your emotions blind you to the fact that improvements can be made. Setting pride aside and weighing your financial ability to compromise with a buyer can be the difference between a frustrating selling process and a smooth one.
The Emotional Strain of Buying or Selling a Home
Beyond the inherently stressful and emotional nature of hammering out the details of a large financial transaction, there are various other factors that make buying or selling a home an emotional affair. First, emotional attachment to the home you’re selling or to the location and lifestyle you’re hoping to transition into with the purchase of your new home can be very powerful. Choosing a new home isn’t only about the features of a house, but also about the school district your kids will attend, the safety of the neighborhood, and the length of your future commute. The weight of this decision is understandably stressful at times. In addition, the timelines involved in real estate transactions, especially for those who are both buying and selling real estate, can add a sense of urgency that increases tension and emotional buy-in.
Finally, the discrepancy between expectation and reality can be difficult to come to terms with. The Colorado housing market is shifting every day. Some sellers have watched homes list on Thursday and sell by Sunday for the last few years, and expect the same for their homes only to be disappointed by the more-balanced market we’re currently seeing. On the other hand, buyers are still grappling with lower inventory than usual on top of higher interest rates, and may struggle to find a home that checks all of their boxes within their price range. Sometimes, coming to terms with these realities can be extremely disheartening.
How to Prepare
While most real estate transactions will involve moments of disappointment or frustration, taking a few key steps to prepare yourself can help you keep a level head throughout the process.
1. Partner with an experienced real estate agent
The best way to prepare for an emotional real estate transaction is to partner with a real estate agent you can trust. This way, you can lean on their advice and their knowledge of the local market without hesitation. A good agent will always have your best interest at heart and will bring a logical and objective point of view to each bump in the road. Whether you find an agent through a friend’s referral or online, take your time in reading reviews and talking through your preliminary questions to make sure they’re a great fit.
2. Research your local market
With the help of your real estate agent, establish a baseline understanding of your local market so that you have a realistic idea of what to expect. If you’re selling, find out how long homes in your area are generally on the market before going under contract. Learn about comparable sales in your area and how to strategically price your home for sale. Buyers can look into homes at various price points and get clear on interest rates before beginning the process of setting up showings.
3. Get clear about your finances
Regardless of whether you’re buying or selling, you need to know exactly where you stand financially before you head into the emotional turmoil of listing your home for sale or beginning to place offers. This may involve talking with lenders, examining your monthly budget and how much you can afford for monthly payments, looking into current interest rates, and more. With a target budget or sale price as well as specifics about your true stretch points, you’ll be better equipped to prioritize your long-term financial wellbeing during an emotional process.
With the help of the right real estate agent and some strategic preparation, the process of buying and selling a home can become less stressful and even enjoyable as you transition into your next exciting step. I’d love to help answer any questions you have about the process. Give me a call at 719-337-7254 or 720-498-9592.