Home Buying Tips 101: Avoid the GREED Monster!!!

Having gone through the home buying & selling process many times myself, I have become aware of something that I see in new home buyers, and even some seasoned ones: The Greed Monster!

This is a sensitive topic that most salespeople won't talk about. It’s something that everyone can relate to if we’re all honest with ourselves. The Greed Monster has stolen hours of sleep from me at different times in my life. This sneaky monster causes consumers to become irrational and frantic. The psychology behind the Greed Monster is interesting and worth discussing.

Homebuyers may have different financial journeys, but they all go through the same processes. Some will start off researching home buying tips, but most will go straight to browsing homes on the internet.

Shopping for homes online is fun. It is the fuel that energizes buyers to pursue the homebuying process.

Once a person starts daydreaming about living in the homes they find online, the buying process starts to gain real traction. They’ll start to visualize where their furniture will go and what Thanksgiving and Christmas day might be like in each home.

Folks will then talk to a mortgage lender to determine their potential price range. Once the price range is set, the Greed Monster starts to show up.

The Psychology Of A Homebuyer

Sellers want to sell their home for the maximum price, and homebuyers want to buy a home for the lowest price possible. This dynamic is what makes the real estate market so interesting.

Many people (including myself) set out to find a completely unrealistic deal when we first shop for homes. Our brains go to the highest and best possible scenario. It's easy to believe that we are the only ones looking for the perfect home.

Since homebuyers do not directly see their competition, it’s hard for them to understand other competing buyers, much like themselves. They may misinterpret the real estate market's true competitive nature without coaching their real estate agent.

The Greed Monster will tell homebuyers, “You can probably afford that, even though it’s a little more than your budget suggests,” or “I’ll bet the sellers will go down $80,000″. My personal favorite is, “It’s destiny that you should have this house. You earned it.”

Yes, the Greed Monster will disguise itself as the Destiny Fairy at times. I’m speaking from experience on this one. Impulse decisions and irrational emotions are direct openings for the Greed Monster to sneak in and set you up for disappointment.

How can you tell if the Greed Monster is affecting you?

Are you losing sleep because you lay awake thinking about how to move up into the next price bracket? If the answer is “yes,” then you may be under his spell. Is your work productivity dramatically decreasing because you spend several hours a day looking at homes you can't really afford? If so, you might want to evaluate whether the Greed Monster is chasing you down.

People may read this post and ask, “What’s so bad about the Greed Monster? Isn’t the desire to get the best deal a healthy part of the home buying process?” Yes, it is, as long as it doesn't negatively affect your relational, physical, & emotional health. If it consumes your thoughts, you and the people around you may suffer. That's the main point of this post.

Being greedy doesn't help you find a better house. In fact, it can cause you to get so wrapped up in finding the best house that once you finally close the deal, there is an emotional letdown. Reality can never keep up with our expectations when we have become obsessed. The perfect house does not exist for the vast majority of us; there is always something we will have to compromise on. Even if we can find the perfect house, it will not fix life’s problems; it simply provides a place to live.

If you or a loved one are being overwhelmed by the Greed Monster, take a step back, breathe, and relax. Buying a house can be really fun if you avoid the greed trap and maintain a healthy understanding of your financial situation. Be open with your real estate agent and mortgage broker and let them know how the home buying process affects you. A good real estate agent will help keep you grounded as you look at each home in person and learn to find a healthy balance between want and greed.