Recently, a client canceled their home purchase on the last day of their inspection contingency period. The property had received multiple offers, including even a higher-priced backup offer after the seller accepted my client’s offer.
By all standards, this was a hot, desirable property in a market defined by a shortage of available
The property featured a rare in-law suite with a separate entrance, which could generate rental income to help pay the mortgage. It was on a quiet cul-de-sac yet remarkably close to town. Multiple large decks offered lush green valley views and some distant ocean views.
This home was an excellent match that met most of the buyers’ requirements. The purchase price was within their budget, and the appraised value came in even $20K above the accepted price.
So what went wrong?
Granted, it was an older house. It was not a perfect unicorn because… those don’t exist.
In Hawaii’s real estate market, you must become comfortable striving to find an excellent match instead of a perfect match. Real life requires practical thinking. That often includes compromises with good enough solutions.
See related article: How To Zero In On The Right Property (The PDE Method)
Every Opportunity Comes With Certain Risks Attached
A real estate purchase is one of the most significant financial decisions you make. It can be nerve-wracking. I never met anybody who did not get severe anxiety when they made their first real estate purchase.
It often requires a considerable cash downpayment, depleting savings, and committing to making costly regular monthly mortgage payments for over a third of a century. All that seems overwhelmingly frightening.
However, years later, after paying off their mortgage, most people agree that buying their home was one of their best decisions despite all the required sacrifices. Real estate owners enjoy long-term appreciation and create priceless family memories in their homes.
Buyers tend to recognize the full extent of the opportunity and its benefits only years after their purchase. When buying, they tend to focus on all the potential risks.
Those perceived risks are plentiful and tend to mushroom quickly immediately after the contract acceptance. That’s when the buying decision is carefully evaluated for rational justification.
Uncertainty about the future and the possible adverse outcomes can create dread.
“How can we keep up with the responsibility of maintaining and repairing the house on top of all those monthly mortgage payments?”
Doubt creeps in, and fear rules the day.
Soon after, my client became overwhelmed by different opinions and confusing advice. It’s called buyer’s remorse, and it happens all the time.