Don’t let FOMO guide your decision-making process as a homebuyer.
Is FOMO costing you money? FOMO stands for the “fear of missing out.” If you haven’t heard of this term, Google it; it’s a real thing.
The bottom line is that my team and I work with a lot of buyers, and these buyers come in all shapes and sizes. 50% of them are focused on what they want. They know the area they’re looking in, understand why they’re buying, and have fallen in love with the numbers. What I mean by that last part is they’ve spoken with a lender, understand the loan they’re getting and how much they’ll bring to the table for a down payment, know what their monthly payment and closing costs will be, etc. They’re 100% ready to go; all they’re waiting for is the right property to pop up.
The other 50% we work with are playing small. They’ve spoken to a lender but don’t understand their financial options. They’ve spoken to an agent or two but haven’t developed a relationship with them. They have a general idea of where they want to live but aren’t committed to a particular area. They don’t know why they want to buy, they just know that now is a good time to do so.
We’ve found that the people who are focused, ready, and prepared are winning. The people who don’t know what’s going on financially, emotionally, or physically are the ones who have a lot of doubt, and that doubt is costing them tons of money in our market. In short, they have FOMO. They have FOMO because they don’t know what they want.
For example, they might find a property, fall in love with it, and want to submit an offer. However, as soon as two other properties they like come on the market in a completely different area, they’ll decide they want to look at those properties before moving forward with their first offer. At that point, they’re comparing apples and oranges. Most buyers look for 10/10 homes, but unless you have an unlimited budget or are building a custom home, it’s difficult to find a 10/10 home. My team and I encourage our clients to look for 7/10 or 8/10 homes because that will give them what they want and allow them to work around the rest as they settle into the property.
The point is, the buyer who wants to submit an offer on one property while looking at two others will get even more confused. They’ll miss out on the initial home they wanted, and by the time they feel like they want to submit offers for the other two homes, multiple other buyers will have already made offers on them. Thus, they get caught up in these bidding wars but never close the loop because they’re not even sure what they want. They keep letting other properties distract them, and all the while the market is moving very aggressively. When one home sells, the next one is selling for more.
If you’re a buyer, that’s just what you have to deal with in this market. If you don’t want to deal with it, then you’ll just have to sit on the sidelines and see how things play out for a while. Keep in mind, though, that many are waiting for a market that won’t materialize, and a lot of buyers are finding value now because interest rates have never been lower.
What can you do to set yourself up to win? Fall in love with the numbers before you fall in love with the house. If you don’t understand what kind of loan you’re getting, your down payment, where the money is coming from, etc., there’s a lot of doubt in your situation. If you don’t know where you want to live, what kind of home you want, or what type of life you want, that doubt will make you a “no.” You’ll always be a “no” because in your head there will always be something out there that might be better.
The best advice I can give to any buyer looking to win in this market is to understand why you’re buying, where you want to live, and then zero-in on that area. After that, talk to a lender and figure out what type of situation you’re getting yourself into financially. If you’re not on your game in this market, you’ll lose. I’m seeing a lot of people lose, and it’s costing them a lot of money.
We’re here to help you get the property you want at the price you want. If you take our advice, we guarantee you’ll win in this market. If you’d like to talk more about buying or selling a home, have a topic you’d like to see me address in a future video, or any other real estate needs at all, don’t hesitate to reach out to me. Until next time, happy selling.