When you’re looking for a new home, it can be easy to get caught up in the moment and quickly blow your budget. Here’s how to avoid the emotional overspend.
Buying a home is one of the biggest decisions you can make, so it’s no surprise that emotions might sometimes get in the way. The big issue is that this can really cloud your judgement and, when you’re playing with the kind of budget a home requires (and, most likely, your life savings), it can be dangerous.
What is emotional overspending?
High-pressure situations trigger a response in your brain that often sees reason go out the window. The emotional centre of your brain goes into stress mode and the body’s response isn’t the most conducive to making big decisions. This puts you in a prime danger zone for emotional overspending, when you throw caution to the wind and are suddenly ditching your strict budget and bidding up a storm at the auction or getting a little too generous on your deposit cheque. (Ever had that YOLO feeling?!). The emotional overspend is something that can befall even the most level-headed person, so it’s good to have some avoidance tactics up your sleeve.
1. Rank your home must-haves to ensure potential properties meet your needs
Emotion comes into play when you mentally move into a home. It’s so easy to envisage yourself kicking back on the verandah when you inspect a property, but this is the type of thing that leads to the emotional overspend. As hard as it may be, you need to know exactly what your new home should deliver on a practical level. Forget the charming weatherboard facade and the light-flooded sunroom, you need to make a list of priorities that a potential home needs before even thinking about weekends spent in the garden.
2. Skip the auction to manage your anxiety
As if buying a home wasn’t stressful enough – add a bidding war and the panic-inducing cries of the auctioneer into the equation and you’ll be right in the emotional overspending sweet spot. In fact, an emotional overspend can occur at an auction. Here’s where you’ll need to bring in someone you trust to take your place at the auction. You may want to listen in via phone but, if you’re likely to get caught up in the moment, you might want to simply talk to your trustworthy mate post-auction. Give them your absolute budget limit and advise them to stick to it – no ifs or buts.
3. Use a buyer’s agent to avoid blowing your budget
If you’re concerned that you will be easily influenced into spending too much, take the stress out of the process with a buyer’s agent. That way, they can know the exact limit of your budget and go no further if a property exceeds it.
4. Align with a mortgage broker you trust
When you’re dealing with such a big life (and financial) decision, you essentially want to assemble a team of experts so you can take the most streamlined and stress-free route to your goal. The mortgage is a crucial part of the home-buying process so, if you’ve teamed up with a broker you trust, you know that you can rest easy knowing that this portion of the journey is taken care of. Eliminating as many potential stress points as possible is a good way to keep the whole process cool, calm and collected and avoid the possibility of an emotional overspend.
Are you looking to assemble a team of home-buying experts? Make an appointment with an Aussie Broker today.