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8 Psychological Traps in Home Buying and How to Avoid Them

Dusty Rhodes • September 30, 2024

Our brains can sometimes trick us into a buying a home that doesn't fit our needs. Following these tips could help minimize buyer's remorse.


If you’ve ever made an impulse purchase, you know what it feels like to have your brain seize up and focus only on the shiny thing in front of you that you absolutely must have. If the shiny thing is a coat you can’t afford, the consequences of overspending to buy it are probably pretty small.


If it’s a home, however, you could end up spending a lot of money on a place that doesn’t fit your needs. It’s one reason why it’s important to be aware of some of the psychological traps that can drive decisions that defy logic when viewed strictly through a lens of rationality.


Those traps can lead to buyer’s remorse, which is surprisingly common among home buyers. According to a Zillow® survey of buyers in 2022, 75% of those who had successfully purchased a home in the past two years had at least one regret about the home they bought. Those regrets ranged from underestimating the amount of yard work, to failing to consider the location of bedrooms.


Here are some common traps and tips for avoiding them.


1) Overconfidence


You find a home online that seems perfect, and spend an hour lingering over the photos and the 3D Home® tour. By the time you arrive for the in-person tour, you’re already in love, so much so that you start minimizing obvious problems. The crack in the foundation? It looks pretty small. The water marks on the bedroom ceiling? Probably just an old leak. And so on. You utter the words “We can fix that, easy” so often that your partner starts to worry. 


If that’s you — and you’re not a contractor — you’ve fallen into the trap of overconfidence: being so optimistic that you downplay the possibility that anything negative could happen from buying a home that needs more work than you can reasonably pay for or tackle yourself.


How to avoid this trap


Get a great inspector who can find significant problems in the home, and give you an idea of what it will cost to fix them. Your agent may also have a stable of experts they can call to give you an idea of what might be involved in repairing problems.


2) Neglecting the future you


Let’s say you’re a newly married couple buying your first home. You don’t have kids or pets or a bunch of stuff, so you focus your search on homes that fit your current lifestyle. In doing so, you discount the future, giving more importance to your current needs than what you might need in five years or so.


How to avoid this trap


Think about “future you” and what your life is likely to look like in five years. If pets and/or kids are in the plans, or if a relative will be living with you at some point, factor them into your thinking now unless your plan is to move again to accommodate expected changes in your life.


3) Failing to negotiate


When homeowners list their homes for sale, the listing price typically reflects what they hope and expect to get in the current market. As a buyer, that’s the first number you see and it may determine whether you’ll even consider the home. This trap is called anchoring — a tendency to use the first number or piece of information as the baseline for decision-making. But in certain markets and during certain times of year, it may be possible to negotiate a lower price. In the fall home shopping season, for example, the market is slower and sellers tend to cut prices on homes that have lingered on the market.


How to avoid this trap


Lean into your agent’s local expertise to find out whether price cuts are common in your market. You also can explore whether a seller might be willing to discount the price in exchange for something else they value, such as a rent-back agreement that will give them breathing room to shop for their next home. 


4) Acting impulsively


When competition for homes is fierce, buyers need to be prepared to act quickly to make an offer on a home they like. But acting quickly when you’ve worked out your buying budget, determined what’s important in a home, and obtained pre-approval from a lender is not the same as acting out of a sense of urgency solely because homes are in short supply. 


How to avoid this trap


Do the groundwork for buying, starting with getting your credit in good shape. Work with your agent and loan officer to understand the market, what you can afford and what home features will best suit your needs. 


5) Ignoring information that challenges our beliefs


This is known as confirmation bias, and it involves ignoring information that doesn’t conform with our existing beliefs or putting greater weight on information that confirms what we already believe. For example, if you held firm to a belief that interest rates would drop dramatically this year, and put off buying a home based on that belief, you would be paying an even higher rate today. 


How to avoid this trap


Stay up to date on market trends and tap your agent’s expertise. Even experts can’t time the market or say with certainty what’s going to happen to interest rates or home prices. Instead of discounting information that challenges your beliefs, seek it out and factor it into your decisions.


6) Getting stuck in the past


Imagine you’re shopping for a home, and your fond childhood memories are so powerful they prevent you from even considering a different style of home than the one you grew up in. You spend hours in search of the perfect replica, ignoring your partners’ pleas to compromise and at least tour some other homes.


How to avoid this trap


Think about how you want to feel in your home and what you can do to evoke those feelings. It may be that certain paint colors or tile or the layout of a home will be enough to recreate the nostalgia you’re seeking.

7) Fixating on one thing, and losing sight of the big picture


Many of us know the feeling of getting so attached to something that we ignore or minimize some obvious red flags. For instance, you may fall hard for an outdoor kitchen in a home that has a yard requiring a ton of upkeep. You hate yard work, but buy the home anyway, thinking the yard won’t be a big deal — and then find yourself mowing for an hour every weekend. Or maybe you get so fixated on the thought of your kids or your pets having a yard to roam in that you might not fully consider what it might feel like to commute an hour to and from work.


How to avoid this trap


Make a list of what you want — and do not want — in a home before you start shopping, and stick with it. Having a cool outdoor pizza oven or a big yard isn’t going to make you suddenly love yard work or commuting long distances. 

8) Moving ahead with a purchase because of the money and time you’ve spent finding it


It can be crushing to find a home, and discover after you’ve written the offer, applied for the loan and ordered the inspections that the home has a flaw that cannot be easily remedied. You may even think that you’ll never find another home after looking for so long.


How to avoid this trap


Take the long view. Imagine living in the home five, 10 or even 14 years from now. Is the flaw going to drive you up the wall? If the flaw is expensive to fix, think about the other things you’ll be giving up to fix it. 


Emotions and logic 


Home buying can be a struggle at times because it requires us to reconcile our heart and our mind. Giving yourself guardrails and accessing good information can make reconciling both easier.


The great thing about making decisions is that, ultimately, you’re the only person who can know what’s right for you. Trust your gut. If you’ve done all the work — asked the right questions, relied on correct facts, listened to trusted advisors and determined the degree of risk involved — chances are you’re well on your way to moving forward to the next chapter in your life.


Source: Zillow



Dusty Rhodes Properties is the Best Realtor in Myrtle Beach! We do everything in our power to help you find the home of your dreams. With experience, expertise, and passion, we are the perfect partner for you in Myrtle Beach, South Carolina. We love what we do and it shows. With more than 22 years of experience in the field, we know our industry like the back of our hands. There’s no challenge too big or too small, and we dedicate our utmost energy to every project we take on. We search thousands of the active and new listings from Aynor, Carolina Forest, Conway, Garden City Beach, Longs, Loris, Murrells Inlet, Myrtle Beach, North Myrtle Beach, Pawleys Island, and Surfside Beach real estate listings to find the hottest deals just for you!

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The Secret To Selling This Spring: Start the Prep Work Now

By Dusty Rhodes • February 17, 2025
Spring is the busiest season in the housing market. It’s the time of year when buyers are most active – that means it’s when homes sell faster and for top dollar. If you’ve already got a move on your mind, why not list this spring and take advantage of the added buyer demand ? Since spring is just around the corner, now’s the time to start getting your house market-ready. You’ve got just over a month to do the prep work. And while that may sound like a decent amount of time, it’s going to go by quickly. And you won’t want to rush through this important task – especially this year. The Right Repairs Will Matter More This Spring Right now, two things are true. There are more homes on the market than there have been in years. And buyers are being extra selective. That combination means you need to invest some time and effort in making strategic repairs . And many homeowners already have a jump on this work. In the 2025 Outlook for Home Remodeling , Carlos Martin, Director of the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University , explains : “. . . homeowners are slowly but surely expanding the pace and scope of projects compared to the last couple years.” And the most common projects they’re tackling are replacing water heaters, HVAC units, and flooring. Energy efficiency is a key consideration too, based on home improvement data from the Census. What To Prioritize as You Plan Ahead But just because that’s what other homeowners are doing, it doesn’t mean that’s what you have to tackle. Think about what you’d want to see if you were a buyer. Focus on quick wins that are easy to knock out with the time you have – but, don’t ignore key repairs, especially ones you think could turn off buyers. While big-ticket items like replacing an old roof or outdated flooring may seem daunting, they can pay off – especially if you focus on projects with the best return on investment (ROI). An agent’s expertise is key in narrowing down your list to what’s actually worth it. They know what buyers in your area want and they also have data like this report from Zonda to guide you on which updates have the best ROI ( see green in the graph below ):

41 housing markets where inventory just tipped in favor of buyers

By Dusty Rhodes • February 10, 2025
Among the nation’s 200 largest housing markets, these 41 metro areas now have active inventory at or above 2019 pre-pandemic levels. While homebuyers and home sellers still see headlines about the housing market being a seller’s market and national home prices reaching all-time highs, a deeper look reveals that several regional housing markets have shifted, giving homebuyers some power. During the pandemic housing boom, from summer 2020 to spring 2022, the number of active homes for sale in most housing markets plummeted as homebuyer demand quickly absorbed almost everything that came up for sale. Fast-forward to the current housing market, and the places where active inventory has rebounded to 2019 levels (due to strained affordability suppressing buyer demand) are now the very places where homebuyers hold the most power. At the end of January 2025, national active inventory for sale was still 25% below January 2019 levels. However, more and more regional markets are surpassing that threshold. Among the nation’s 200 largest metro area housing markets, 41 markets ended January 2025 with more active homes for sale than they had in pre-pandemic January 2019. These are the places where homebuyers will be able to find the most leverage or market balance in 2025.

Selling vs. Renting Out Your House: Which Is Right for You?

By Dusty Rhodes • February 3, 2025
Leaving your current house and moving to another one gives you a few options. While most homeowners choose to sell outright, many opt to keep their old home and rent it out instead. This decision can be influenced by several factors: a strong rental market in your area, the advantage of a low current mortgage rate, or challenges in selling the house at the desired price. If you’re wondering whether to sell your house or rent it out, there are a few things to consider. Key Takeaways The answer depends on your circumstances, your housing situation, and your current finances. Selling your house may be the right option if you need the proceeds to purchase your next home or could make a profit. Renting out your house may be the right choice if you’re planning to live in your home again, have a low mortgage rate, or are looking for more income. What are the rental prices in the area? Does it make sense to rent your house? In some locations, rental prices can easily cover your mortgage payments. Depending on how much you have left on your mortgage or if you have a low mortgage rate, the rental income from your old house may cover the monthly payments, plus homeowners insurance and property taxes you pay. However, if you’ve recently purchased your house and are looking to rent it out, your mortgage payments may be too high for a lease to cover them. Take a look at houses that compare to yours with regard to size and location. This should give you a ballpark figure on what price your house can lease for. If you aren’t on a tight timeline to leave your current home, take notice of how quickly similar houses in the area take to lease. If rental properties stay empty for more than a few weeks, you may have trouble finding consistent tenants. A real estate agent can help match you with a tenant or give you an idea of your rental prospects. They can also give you insight into whether your location is desirable for tenants. For instance, if it’s near a university or larger employer, you may be able to rent to students or to employees who relocate for that large employer. However, if the house is far from the city center, or you’re located in a residential neighborhood, you may have trouble finding tenants. Do you need equity from your current home? Why are you leaving your old house? Are you purchasing a new home? If you’re planning to upgrade to a larger home, you may need the money from the sale of your old one to place a down payment on your new house. If you have enough equity in your current home, it may make more sense to sell the house instead of renting it. If you’re able to afford the down payment on your new home without selling your current one, usually about 20%, then renting out your old one makes sense. What is the market like in your area? The housing market isn’t consistent across the country, and even different parts of larger metro areas may be more or less robust. If the current market is slow and you think you can sell your home for a higher price in a few years, then it may make sense to rent the house until housing prices rise again. However, if it’s a sellers’ market and you can get the maximum selling price for your home, then selling it may be the better option. Keep in mind that houses that have been rental properties, often have a harder time selling afterward. You may have more wear and tear in the home if multiple tenants have lived there, which may mean spending more to prepare it to show and sell. An experienced real estate agent in your area can help you determine the top vales of your home and whether or not the current market can support that selling price. Agents who have been in the area long enough to become familiar with the housing market are in a good position to help you determine the best time to sell. Will you live in the house again? Consider whether you plan to live in the house or the area again. You may be in a situation that requires temporary relocation, and you plan to return to the original home in a few years. Having a good tenant to live in the house can ensure that your home stays in good condition instead of sitting empty. You’ll also have income from the rental property and building equity in the old home and your new one. Do you have the time and money to be a landlord? For those who are new to investing in rental properties, it may seem easy to rent out their current home and enjoy passive income while paying down their mortgage. However, if this is your first time being a landlord, you may find leasing your property yourself challenging. First, landlords are responsible for making major repairs to the house. Landlords have to fix things like broken pipes, defunct HVAC systems, and structural damage, among other essential repairs. If you don’t have a few thousand dollars on hand to take care of these repairs, you could end up in a bind. There are specific laws in place to protect tenants, including the landlord’s reliability to make major repairs on the house. In addition, there are certain things that you can and can’t do as a landlord. Being aware of Fair Housing Laws is critical to make sure that you don’t inadvertently violate them. Do you need a property manager? A property management company can help vet tenants, collect rents, and arrange for repairs and maintenance on your behalf. A good property management company is also up-to-date on current requirements in your state for landlord obligations. If you’re planning to just lease your house, you may choose to manage the repairs and tenant search yourself, especially if you live nearby. However, if you’re planning to build a portfolio of rental properties, then having one company manage them may be a better option. Property managers can help ensure that your house or houses stay full, including working with local agents, having open houses for prospective tenants, and quickly running background and credit checks for those applying for a lease. As a passive landlord in this situation, you’re able to free yourself of the obligation for emergency repairs and the time searching for people to live in your rental property. Consider rent-to-own Another option when you’re considering whether to sell or rent your house is to engage in a rent-to-own agreement. In these situations, the tenant will place a down payment on the house and make lease payments to you for a specified period. After the lease is up, then the tenant has the option to purchase the home. During the time they’re making lease payments, a portion of those payments will go toward the final price of the house. This option may work for you if the housing market in your area is stagnant, allowing you to cover the mortgage without entering into a long-term obligation to a rental property. These rent-to-own options can be beneficial for tenants, too, as their financial situation may improve enough over time that they’re able to obtain a mortgage. What makes a house a good rental property investment? Does your house have the potential to be a good income property? There are a few things to consider before listing your house for rent. You may have to make some minor repairs and upgrades to your property to attract good tenants who will take care of the house and pay on time. Fresh paint and carpet are usually a must and are required in some areas. The location of your investment property is one of the most important things in determining whether you’ll have steady tenants or be responsible for covering the mortgage out of pocket if the house sits empty. The home’s location can easily make the difference between having a steady tenancy and losing money on the rental property. Final thoughts on renting or selling your home Deciding whether to sell your house or rent depends on carefully analyzing the area and the property’s desirability. Will the area be in high demand for renters, or is it likely that you’ll struggle to find tenants? You’ll also need to take a look at your finances and determine if selling or renting will give you the best return on your investment. Choosing the right real estate agent to advise you in this process can help you answer your question of whether to sell or rent your house.
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