Overpaying for a London Ontario home such as paying over the listing price, or paying near the asking price of an overpriced house or no conditions can come back to haunt those who do.
I get it that there is a shortage of houses & condos in London, Ontario, for sale. When prices rise because of shortages (fear of loss), we humans seem to throw common sense out the window!
We have seen it with oil, vacation ‘deals,’ the stock market, kids’ toys or the latest concert performance.
Mark Twain wrote that humans have a lot of common sense, which is why they don’t use it!
It seems to me that home buyers are acting on impulse, and impulsive action is based on emotion (keeping up with the Jones’s or fear of loss) rather than common sense.
Acting impulsively has consequences, and for a buyer of real estate, that could mean, when it comes time to sell, the market either has decreased or not kept up with inflation, being house poor and in turn, having to become more frugal in the other areas of their life.
In the heat of negotiating, counter offers and multiple offers, most buyers act impulsively, even their sales representative.
How I think a real estate buyer should act.
Be prepared! First, know the facts, neighbourhood prices, financial limitations and lifestyle and secondly, psychological preparation.
Facts are the easy part and make sure they are facts and not opinions & poor perceptions. Mentally being prepared to walk away takes courage and good old common sense.
Price is what you pay; value is what you receive!