The Heartbroken Buyer Syndrome

• August 13th 2010

by Ryan Holeywell

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Earlier this year, graduate student Kris White fell in love with the house of his dreams: it had a newly renovated interior, a convenient location near Columbia Heights, and of particular importance to White, a large backyard.

White offered slightly more than the asking price of $439,500, but his offer wasn’t aggressive enough. There were eight other bids on the home, which eventually sold for $475,000.

“Not only did we lose,” White said. “We lost big.”

White recently closed on a house just a few blocks away for $455,000. But, when asked if he’s just as happy with that property, he hesitates. “I’m still trying to answer that question.”

White, who admits that in retrospect he would have paid $475,000 for his dream home, is part of a growing number of home buyers who are finding that they have to get their heart broken by losing out on a property before they get serious about buying.

Kevin Wood, an agent with William Sawyer & Co., said many first-time buyers think the market is worse than it actually is, and therefore make offers that are too low or wait too long to actually make an offer at all.

“Many buyers think that DC is in the same boat as the rest of the country, so they’re not realistic about how quickly things move,” Wood said. “They think they’re going to get a better deal than they can get.”

Indeed, data from Metropolitan Regional Information Systems indicates that residential properties in DC proper spend an average of 62 days on the market and are selling nearly 30 percent quicker than they were a year ago. Half of listed homes spent a month or less on the market.

And the Greater Capital Area Association of Realtors reported in June that the city has 3.9 months of residential inventory, compared to a national rate of 8.3 months.

Still, agents say that, despite all the statistics, it isn’t until that first property slips away that the home shopping process becomes easier.

“I will sit with clients at the beginning and let them know what the market is doing,” Fernando Garcia, an agent with Continental Properties, told UrbanTurf. “They never listen to us until they have their heart broken one, two or even three times.”

And once a buyer misses out on the dream home, Garcia said, it can be difficult to help them forget about it, since they often compare subsequent homes to the one that got away.

“When we lose out on the first property, I can tell them until I’m blue in the face that they need to forget about it,” Garcia said. “Once they actually get that out of their head, they can look at properties without bias.”

Pamela Wye, an agent with W.C. & A.N. Miller, said she has a number of stories of clients who hesitated on the first home they were really interested in, only to lose out on it and regret it later.

About six months ago, one of Wye’s clients fell in love with a two-bedroom condo in Adams Morgan, but wanted to take a few days to think about it – even though Wye believed the unit was underpriced.

“When he found out it went under contract, he was devastated," Wye said. “He talked about the unit for weeks.”

Another buyer lost his dream condo in Logan Circle because he wasn’t willing to increase his offer by $3,000. Now, Wye said, he can’t stop talking about what a mistake it was.

“Sometimes, buyers just want to try to go with a low ball offer,” Wye said. “If you really like something and the comps show it’s priced right, you should move quickly. Quality properties do not stay on the market long in DC these days.”

Buyers can avoid the trap of first-time heartbreak by knowing exactly what they want in terms of property type, location and budget, said agent Jennifer Myers. “I have found that if people don’t really know what they’re looking for, they have to go through the heartbreak in order to know, ‘I messed up on that one,’” she said. “I always tell buyers ‘If this is the one you want, be prepared to claim it.’”

But, she notes, it’s not the end of the world if someone misses out on a property. Often, buyers are happier with the property they ultimately end up with and forget about those that slipped away.

Wye added similar words of consolation when a client loses out on a home. “New inventory comes in every day,”

Ryan Holeywell is a Washington, DC-based journalist whose work has appeared in USA Today, The Detroit Free Press and washingtonpost.com. He can be reached at ryan.holeywell@gmail.com.

This article originally published at http://dc.urbanturf.production.logicbrush.com/articles/blog/the_heartbroken_buyer_syndrome/2371.