Home buyer burnout is real! This doesn’t happen to home buyers who are able to purchase their property quickly, but for many consumers that is not the path they take. It’s a miserable situation when someone bids on a home and is consistently shut out. It’s discouraging.

Home buyer burnout comes from trying but not buying and the passage of time

In strong seller’s real estate markets, home buyers are faced with enormous challenges to become the winning bid due to multiple offer situations, rapidly rising prices, appraisal challenges or financing difficulties.  Even in a balanced market, many interested home buyers in Silicon Valley do not purchase property within a year of beginning, and some elect to be permanent renters.  My best estimate is that half of those who want to buy a home do not do it within 12 months.

Why do able home buyers not buy?  Here are a few things which can be the cause:

• Expectations that aren’t in line with what is possible. They want more than what their budget can bear (better location, more square footage, better condition).
  • They may have trouble accepting that many bidders are paying more than the comparable sales will support. If a house looks like it “should” be worth about $1.5 million, and a buyer bids close to that, it may not even be close if there are multiple offers.
• They get priced out of the market because prices continue rising while they are bidding under the sale price repeatedly. After 6 months if they don’t raise their budget or lower their expectations they are further and further away from success. What’s attainable simply moves further out of reach.
• They are too uncomfortable with the highly competitive terms required to purchase (as is or perhaps few or no contingencies). We hate writing offers with no contingencies, but if a seller gets 6 or 8 offers, the odds are that several of them – maybe all – will have zero contingencies.

Today we’ll address home buyer burnout and home buying, and what can be done to mitigate or avoid it.

Prolonged house hunting leads to home buyer burnout

Is home buying a sprint, a marathon, or something undecided?

Super motivated, realistic home buyers tend to purchase property fast, within one to three months of looking in person. 

• They usually have done a whole lot of online research or background work first, though, so that they are mentally prepared.
• These buyers often understand that there is no perfect house or perfect place for them, and they are ready to make compromises as long as they get most of what they want, or the most important elements of what they want.
• These savvy home buyers do not get home buyer burnout – because for them, it’s clearly a sprint, not a marathon.  Work hard, work fast, move in, all done!

Less motivated, or less rushed/urgent (or more picky) buyers want or need more time, and they are the ones who are at risk for home buyer burnout if they don’t have success quickly.  “I don’t want to rush, I want to find the right house”, they will say.  Makes sense, too, since it’s not like reselling a car if the fit isn’t so good after all.  Frequently these buyers will say “I’ll look on my own and will reach out to you when there’s a property I like and we can chat about it and then maybe see it”.

The problem with looking casually is that these buyers may not be preapproved (the preapproval is good only for a set amount of time), they may not jump on homes quickly enough (the good ones go fast), and they may miss opportunities since they are not really focused on buying all that much.

Note: As a Realtor looking to spend my time wisely, when I hear a buyer say to me “I’m in no rush” or “I may need to write 100 offers” or “we are looking for that rare house”, I know that I am going to run, not walk, from them.  With each passing month, the odds of them buying decrease. When they’re ready, go look in earnest. But looking casually does not end up in success most of the time.

Indecision: When buyers are indecisive about where to live, how much to spend, whether they want a single family home or if a condo or townhouse will do – in other words, when there are many, many unresolved issues, and when they spend a lot of time house hunting despite the lack of focus, then fatigue can happen too easily.

Initially, all buyers have some areas not quite decided.  If many items are up in the air, it would be wise to do some research online or by talking with people who’ve bought recently or with a good Realtor or two, casually visit areas or open houses, and otherwise get most of the priorities lined up before spending lots of free time looking at real estate for sale.   Included in that priorities list should be a time frame.

Different pacing: Sometimes buyer burnout is the result of two or more people buying together who have either different priorities, time frames, budgets desired, etc.  I have sometimes seen one buyer who’s ready to buy now, move in and get on with life – but the second buyer is the long-term sort.  Either way approach can work, but if one is sprinting and the other doing a marathon, you get a different kind of frustration and burnout happening.  This seldom works.

Market changing quickly, and not keeping up (learning):  When prices rise fast, buyers need to keep pace or they will find that in multiple offers they are not the winning bid. In fact, often to be successful, what is necessary is to jump ahead of the curve.  (And yes, overpay.)  It is discouraging to lose out over and over.  It is also an opportunity to learn.

One year I had a young couple who lost out on about a half dozen offers.  They were so cautious that it was costing them, because each home was more expensive than the one before. Finally I went back and did a little study of where their offers were and where the sale price ended up being.  In each case, they were low by about 5% – consistently. Being conservative is a great idea, but it may not lead buyers to write offers that are competitive enough to win the home.

Too late, home buying fatigue has struck. Now what?

When home buyer burnout hits, take a break, regroup, re-evaluate your strategy. Check in on your motivation. Do you really want to buy, or is someone else nudging you to do it?

What does your real estate agent say needs to change?  He or she is your partner, so ask for and take seriously guidance from your trusted real estate professional. Some Realtors will be concerned about telling you that something you’re doing needs to change. They don’t want to be critical. So ask,  “what do you think we need to do differently?”

While regrouping, sort out your priorities and pacing upfront, be determined to understand and keep pace with the market, and avoid burnout altogether.

 

Related reading

Buying a home – 2024 changes (on our popehandy.com site)

Transactional or relational real estate agent relationship? (this site)

Why do you keep losing out on multiple offers? (this site)