This is When You Should Go Over Your Limit for Your Dream Home
You're in a bidding war and the prices are up to 20% over the original asking price. You're about to hit your limit and your agent seems to think you can carry some extra financial weight. Should you go over your preset maximum cost for your dream home?
When to say yes
The first thing to do is sit back down with your spouse and figure everything again. What is the actual bottom line? Oftentimes, we will figure a little more money for ourselves in order to stay comfortable. However, if you know you love a
home, you need to decide if it's feasible at all to continue with the bidding war. If you are honest, you may find that it's really impossible and you need to keep looking.
On the other hand, you may find that you really can afford to pay more, although things may be a little tighter than you would prefer. One option is to set a hard deadline, along with how many more offers you are willing to make and stick with it. You may decide that you will bid one more time to see if the owner will back down. If they do, you can rest easy and be glad you went forward. If not, you will know it's time to stop.
When to say no
If you did your research, you know exactly what you can afford for a
new home, and you were looking in this price range for a reason. If you break your limit, how much further will you go? Personally, you will need to weigh this financial burden for yourself and be realistic about what you will have to give up in order to carry it. It may very well be that there are other homes that you can be happy in, and you would probably get more value from a home inside your original cost range. On the other hand, if you have found the
home of your dreams, you may be sorry for letting it go.
These are tough decisions, but ones that are common in the real estate business. Don't stretch yourself too thin or you will only resent it. On the other hand, don't stop too soon and regret it. Weigh the pros and cons and feel confident that you are making the right choice.
