3 Steps to Making a Home Purchase Offer Without Feeling Buyers’ Remorse
Imagine you’ve made an offer on a house. You’re excited. The property is perfect— it has a beautiful kitchen, brand new hardwood floors, high-end kitchen appliances, and a beautiful garden. It’s a short commute to work, walking distance from the best local schools, and is even close to downtown. Then, your agent tells you that you lost it— even though you offered above the asking price. Even worse— you could have matched and raised the winning bid. The fact that your bid didn’t win is bad enough, but knowing you could have paid more and didn’t is even more devastating. What can you do to avoid this kind of disappointment? You make a No Regrets Offer.
What is a No Regrets Offer?
A No Regrets Offer consists of the most money you can possibly afford to bid— without potentially going bankrupt. It is the ultimate price point where you’d be okay with losing the house, because paying any more wouldn’t be worth it. If you lose a bidding war after you’ve made a No Regrets Offer, you will ideally feel that there is nothing else that you could have done financially to win the home bid.
How do you find your point of “No Regrets”?
This is an exercise in imagination. You have to be able to imagine how you’d feel if you lost a home bidding war. Here is the basic process for finding your point of “no regret”:
1. Start by imagining if you lost the bidding war by making an offer at asking price. Would you feel disappointed? Would you have wished you made a higher offer? If no, than you should have no regrets. If yes, move to step two.
2. Increase your bidding price by $5K. Would you still feel disappointed if you lost the bidding war? If no, make the offer. If yes, move to step three.
3. Keep increasing the price until you find a point at which you won’t feel disappointed if you don’t win your bidding war.
Don’t move up by the same increment every time—if increasing the price by $5K is too high, try $3K. If $3K is too much, try $1K. When you’ve finally found the price point that will no longer disappoint you, make that offer. That way, you will know you have done everything in your power to get your dream house, and won’t regret your offer when it gets out-bid.
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