When home bidding wars take an emotional toll
When Margaret Heidenry and her husband stumbled upon the perfect home, they thought it was meant to be.
It had everything they wanted. Two bedrooms. Two bathrooms. A terrace. Even a fireplace. What’s more, Heidenry discovered it was the same home her parents had lived in back in the 1970s. It was a sign, she figured. She was so confident she started taking measurements and mentally arranging furniture.
Then, after some back-and-forth with the seller, she got a call. Another buyer had outbid them. Their dream home was lost.
“Upon hearing the news, I burst into tears,” she said.
It’s a common tale these days—especially in hot markets where intense competition fuels bidding wars, edging out buyers who lack deep pockets. Some buyers are spending more than a year searching for the right home, getting outbid over and over again. The constant rejection can wear people down, and realtors in many markets are doubling as grief counselors, helping homebuyers recover from their disappointment to pick themselves up and try again.
If you’re having trouble finding—and winning—your dream home, you’re not alone. Buying a home is an emotional roller coaster even under the best conditions; in a difficult market, a long search can take its toll. But understanding the emotional effects of home buying can help you stay in control and avoid letting your feelings cloud your judgment. If you’re able to wait out the market and forestall any rash decisions, you’ll eventually end up with a home you love at a price you can afford.
The psychology of buying a home
When you’re looking at homes, it’s easy to get attached. The nervousness and excitement of shopping quickly turn to longing when you find the “right” one. When a deal falls through, it can be heartbreaking.
“Homes come with far more emotional weight than any other investment we make,” says the Wall Street Journal. “We fall in love with houses in a way that we never fall in love with a portfolio of stocks and bonds.”
Research has shown emotions can be twice as important as knowledge in consumer buying decisions. One study even found that 44 percent of buyers will pay more for a property because they “really like it.” Price, square footage and location can all be trumped by the “visceral reaction of seeing a home,” says business expert June Cotte.
“Smells, colors, sounds you can hear inside or from the outside—you might not be aware of them, but they can have an influence.”
These unconscious emotions can intrude upon the ability to make rational decisions. For example, having too many choices can cause buyers to freeze up and become hesitant to make a decision. Looking at a lot of shoddy properties can make buyers assess the decent ones as being better than they actually are. And losing bids on multiple homes can bring on a feeling of desperation as buyers start grasping for anything within reach.
If at any time you find yourself becoming too emotionally embroiled in the home buying process, it might be wise to take a step back and cultivate a feeling of detachment before making any more offers. Remind yourself that there’s no such thing as “the one.” You never know when a better home might be right around the corner. Today’s loss could be tomorrow’s gain.
5 stages of homebuyer grief
Buyer Kathleen Henry spent more than a year and a half looking for a condo. After viewing more than 30 properties and losing bid after bid, she needed a break. “I can’t face the disappointment,” she said after the sixth home slipped away.
While there’s no official label for the emotional state of frustrated homebuyers, Boston Globe writer Beth Teitell compared it to the five stages of grief identified by psychiatrists. These include:
You see a home you like and think there’s no way they’ll get their full asking price, even though the market indicates otherwise.
You find yourself mentally lashing out and laying blame—on all-cash buyers, on the sellers who reject your offer, and even on your realtor.
You become so desperate to buy that you decide to settle, lowering your standards in hopes of winning a bid on something. Anything.
Deep disappointment sets in, and you start losing steam. This is when many buyers become tempted to throw in the towel.
You finally accept that it’s going to be a long journey. You grit your teeth, resign yourself to staying in your current home for now, and keep on looking.
Buyers who can reach the acceptance stage may ultimately stand a better chance of staying in the game and making sound decisions that are uninfluenced by visceral reactions. Once the emotional urgency of buying a home dies down, you can bide your time and wait for the right one to come along.
It helps to find a great realtor who can talk you through the emotional ups and downs of the home buying journey. And remember: Good things come to those who persevere!