Shortly after my wife and I bid on a house a few days ago, we learned that although the sellers had gone with a higher offer, they wished for us to consider becoming the official “back-up” offer. By doing so, if the first deal fell through, we would be next in line – the home wouldn’t go back on the market.
You: So why not agree to be the back-up offer?
Because they wouldn’t accept us as a back-up unless we raised our bid price.
You: Did you?
First I asked what their counter-offer was. I saw no harm in learning how far apart we were. I wasn’t committing to anything by doing so and figured, worst case, I’d still get data for future searches.
You: And?
Their counter was still more than we wanted to spend.
You: But you could offer something in the middle right?
And we considered doing that. But after a lengthy conversation, my wife and I concluded we had made the right choice originally. We had bid what we considered to be full value when the house had the one unsigned offer on it, knowing there would likely be no back-and-forth negotiation for us.
We were able to avoid making an emotional decision (which was definitely not easy!) and instead adopted a “Think long, think wrong” philosophy. We stayed the course and decided not to raise our initial offer.
There’s much to consider when it comes to housing. One interesting post by Squawkfox, 6 Surefire Ways To Avoid a Mortgage Meltdown is featured in this week’s Carnival of Personal Finance. It certainly gives you plenty to think about as you enter the mortgage world. (Before too long, I’ll post my thoughts on the mortgage shopping experience, as I continue to develop the “Michael buys a house” series).
Also in the Carnival was my post Top Ten Ways to Save Money While Ruining Your Life, which was named “Best title of the week” by Bad Money Advice’s hysterical review of the carnival. (Anyone curious about social media should look at the picture he’s posted explaining it all).
Thanks for being here! And if you want to be “there” also, remember you can follow me on twitter – much fun and great information there too!
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Remember the time, maybe it was in high school, maybe in college, that you realized that your parents were just as clueless about life as you were? that they were just a couple of schmucks doing their best to get through each day without making a total mess of things? Before that, they had all the answers and their word was law. This is kind of what this post was like for me.
My wife and I were going through this same exact thing a year ago (we closed on the house Sept. 29th, 2008) and it is so interesting to see someone as financially educated as the man that set us on a positive financial path struggling with the same things we struggled with. Observing as an outsider, I am sure you would be able to look objectively upon the situation and give “correct” advice, but when you are mixed up in the middle of it, with emotions and desires flying all over the place, it’s a bit of a maelstrom.
I can say that the few months we were deciding on the house were probably the most trying on our (relatively) young marriage. That being said, we learned a lot about one another – what each of us wanted, where each of us is willing to compromise, and at what point each of us will shut down and regress into infancy. You think that you already know this about your partner, being that you’ve faced years with that person already, but put a decision that involves 6 figures between the two of you, and you realize there is still a lot of learning.
Best to you and your wife and thank you for being willing to share this experience with us.
@Jeff: Thanks for the kind words (I know you meant schmuck in a friendly sort of way, and I love your use of Yiddish in any case)!
We’re glad this particular house is “over” and that we did not raise our bid despite temptation. What I didn’t get into was how many times the selling agent contacted our agent to try to get us to raise our bid as a backup. Crazy the emotional roller coaster they try (and occasionally succeed) in putting everyone on!