By Tara-Nicholle Nelson Broker in San Francisco, CA If you sat down and tried to call up a mental picture of a smart home buyer, the person in your mind’s eye might be sitting in front of the computer, calculator at hand, running numbers and weighing out pros and cons before arriving at a sensible decision. But ask any agent: even the smartest of their buyer clients looks and feels nothing like this image. Once the house hunt begins or the offer is signed, emotions start to fray, tensions run high and stress-induced gray hairs begin to multiply (and/or get pulled out).
Your home is the largest purchase you’ll ever make. So it might seem that emotional side effects like panic and fear are inevitable. But they’re not. You do have the power to manage your emotions and have a relatively blissed-out homebuying experience. And you should seize that power; doing so will not only minimize the discomfort, it will also keep panic and fear from fouling up your decision-making.
Let me hand you some keys – the keys to having a Zen home buying experience:
1. We fear what we don’t understand. Buying a computer, a TV, even a car – these things aren’t super scary, in part, because we do them repeatedly. But we buy homes much less frequently, and the transactions are much more complex and filled with jargon that is essentially unintelligible to all but those who practice real estate for a living. On top of all that, the mistakes we stand to make when buying a home, from buying a lemon to taking the wrong mortgage, hold the potential to devastate our lives and our finances for years to come.
The things that create the most fear and panic in a real estate transaction are the things that we don’t understand. Similarly, conflicts, questions and concerns that remain unspoken to your spouse, your agent or your mortgage broker also hold the potential to create deep anxiety and evolve or erupt into serious problems down the road.
Zen homebuyers are the ones who tend to start educating themselves months, even years, in advance by reading books, frequenting smart personal finance sites, visiting open houses, scouting neighborhoods, and asking questions on discussion boards frequented by experts and fellow consumers. They also educate themselves intensively throughout the process by reading their mortgage, contract, disclosure and inspection documents all the way through and systematically ask the relevant professionals to answer every single one of their questions.
This question-asking piece can be tough for both the timid, and those used to being the expert. But if you want to minimize your home buying stress, give yourself a gentle shove out of your comfort zone and decide to be willing to readily admit what you don’t know and assertive about insisting on answers.
2. Ask – and allow – your experts to manage your expectations. I’ve found that buyers tend to experience real estate as an emotional rollercoaster when they (a) start out with unrealistic expectations or (b) resist the expectation management their brokers, bankers and agents are trying to dole out. There is a lot of education you can get from books and the web, but when it comes down to the nuts and bolts of making your offer on your home, and anticipating the details of your escrow and moving experience, you should look to your own local agent and mortgage sherpa to help you understand things like:
· the range of outcomes that might result from your offer,
· how long to expect things to take,
· when to expect to bring cash in – and how big of a check you should expect to write, each time, and
· when you’ll need to take off work to come sign things in person.
Books and news sites don’t offer the level of detail and local specificity for the nitty-gritty of what you need to know; as well, they also pose the danger of overwhelming you with a firehose of information, when what you really need as you get into a transaction is knowledge: specific answers to questions you actually have or issues you are likely to personally face.
Don’t just look to your local pros for expectation management and answers, though, listen to them.
Don’t just look to your local pros for expectation management and answers, though, listen to them.
3. Shatter the 8 ball. In any market climate, you are at a negotiating disadvantage if you have an urgent deadline for buying and moving. But in today’s market, when deals are taking just about ever to close, having a deadline doesn’t just put your in an inferior bargaining position – it will drive you predictably crazy!
There are literally hundreds of moving pieces to a real estate transaction, any of which can cause things to fall behind. Your appraisal can come in too low, your inspector can recommend you have a specialist come do another inspection, your lender’s underwriter can take longer than expected, and so on and so forth.
When you are under the gun because you have to close by a certain date keep your interest rate locked, you don’t have enough cash to cover the differential in closing costs if you close at the beginning of next month vs. the end of this month, or because you plain old have to be out of your old place by a certain deadline, every one of those moving pieces and steps in the transaction will become loaded with a disproportionate amount of anxiety. (And you may become tempted to make unwise decisions just to get the transaction moving!)
Neutralize the drama-driving potential of all these potential timeline tripwires by getting out from behind as many timing 8 balls as possible and injecting breathing room as many places as possible. Talk with your mortgage broker about extending your rate lock, stuff your cash cushion with as much fluff as possible, plan on some overlapping weeks – even a month – where you can be in your old place and your new one. I can vouch: minimizing your home buying time pressures will maximize your Zen.
4. You’re exceptional, but you’re probably not the exception. Your decision to buy, your work at saving and sprucing your credit, the hard work of wading through all those homes and making the hard decisions about when and where and what to buy, your brilliant taste in real estate blogs (!) – all these things indicate that you are an exceptional person. But don’t expect to create or to be the exception, or be immune to the predictable irritations and glitches of buying a home on today’s market.
Short sales take a long time. Underwriters sometimes request the same document what seems like a dozen different times. (The last 2 short sales that I closed, took 6 months for one and 2 1/2 years, yes 2 1/2 years! for the other with only 1 short sale lender involved.-Annalisa)Sellers tend to take the highest qualified offer they get (even when that buyer is nowhere near as beautiful and brilliant as you!).
With that said, it’s entirely possible that you will have a super smooth transaction, or the shortest short sale ever. In fact, that is my hope for you. But if you go in expecting to be the exception to these rules of thumb, there’s a good chance you’ll be upset over and over again by things that are completely predictable and, thus, create no need for dismay. On the other hand, if you expect glitches, delays and the like, your emotional experience of the transaction will likely be smooth, even if the transaction itself contains the now-normal bumps.
5. Cultivate clarity. One extremely common cause of emotional chaos during home buying is the sense that things have spiraled out of your control. Many buyers express feeling that what started out as a very personal vision, dream or aspiration for their lives, their finances and their families is now 100% controlled by banks who don’t care about them or professionals who don’t intimately understand your wants and needs.
It’s true that not everything in your transaction is within your control, but many things are – and that’s where you should focus your energies. If you start preparing to buy months, even years in advance, by saving, working on your credit, getting referrals to professionals that you feel you can really trust and such, you are much more likely to end up with a home and outcome that satisfies your lifestyle and financial needs.
You can also optimize for this by writing out a clear vision statement for your post-buying daily life and your personal finances before you ever meet with a real estate agent or mortgage broker, so that you can walk into those meetings and clearly communicate your wants, needs, and what is and isn’t important to you. That makes it much more likely that you’ll get your needs met and minimizes the chances that your transaction will become derailed from your original intentions.
6. Manage your own mindset.The list of freak-outs that are common in the emotional landscape of the homebuyer is quite a long one:
· the fear that the seller won’t take your offer,
· the fear that you’ll pay too much,
· the fear of surprises,
· the fear of mortgage glitches,
· the fear that the seller’s bank won’t sign off on the short sale,
· the fear that the home of your dreams will turn out to have a bunch of problems,
· the fear that the appraisal will come in low,
· the fear of buying into a declining market,
· buyer’s remorse
– and the list goes on.
Ultimately, only you have the power to be the manager of your mindset. Get educated about the full range of things that may happen and plan accordingly, but avoid mentally dwelling on or worrying about hypothetical disasters and worst case scenarios.
Learn what things are and are not within your power to control, and decide up front that you will not fixate on or stress about the things that are not. For example, you can control what you offer or whether to house hunt for short sales; you cannot control whether another buyer offers more or whether the seller’s bank green lights the short sale.
If you do get a curve ball thrown at you, take a deep breath, consult with your experts and make the decision that best serves your personal vision and priorities. Then, don’t look back!