Doing My Best to Avoid Home Price Fever

Buying or selling a home can lead to something I like to call "home sale fever." This fever's symptoms include the overlooking or acceptance of certain costs that would normally be unacceptable or even maddening to the average person. Home sale fever however, can turn an average consumer into a money burning fool, who throws caution to the wind and begins making poor financial decisions due to the extreme monetary amounts often associated with a home purchase or sale. While certain associated costs might seem small compared to the overall cost of a home, they can add up to additional thousands or even tens of thousands of dollars.

Unfortunately, I've caught home price fever both in buying and selling a home, and have in the course of my battle with the sickness, learned a few things for which to watch.

Getting Caught Up in Negotiations

When you're dealing with a home sale or purchase that could easily range into the hundreds of thousands of dollars, it can be easy to get caught up in the negotiations. In doing so, you might find yourself tossing around numbers -- thousands or even tens of thousands of dollars -- that might have left you in stunned silence were you contemplating them in most other situations. Giving in to an extra couple of thousand might not seem all that big of a deal when negotiating a home, but if you were told you'd have to give the car mechanic a few grand more for your car repair, you might melt down.

The way I try to put these numbers into perspective is by thinking about them in my daily or even hourly earning power. I ask myself just how many hours, days, weeks, or even months I would have to work in order to make up the money that I'm conceding during a home negotiation. This often acts to jar me back to reality a bit, and remind me that I'm not playing with Monopoly money.

Willing to Accept Requests

Part of negotiating often involves a little compromise. When it comes to selling a home, this compromise might come in the form of acceptance of certain repairs the buyer would like to see fixed. Often these requests come by way of a homeowner's inspection report. Unfortunately, the associated costs don't.

This can leave you accepting repairs, the costs of which might remain unknown until well after the fact. During our home sale, I tried to limit my exposure on such items by utilizing the knowledge of my realtor as well as conducting searches for repair items on the Internet to do a general cost analysis before committing to anything in writing.

Purchases After Moving in

I still remember all the things we needed and/or wanted after first moving into our home. My wife wanted a king bed, there were additional furniture and furnishings we desired, and there were little repairs, projects and cleaning jobs that needed to be done. Piece by piece, they didn't seem like all that much, but together, they began adding up to quite a bit of money.

Because I didn't want things to get out of hand, I began tracking our related home expenses on a spreadsheet. This way I could keep an eye on exactly what all our little purchases were adding up to and ensure they didn't start to overwhelm our budget.

Moving

Sometimes it's the nearer you get to getting into or out of your home that brings the home price fever on full force. This means that when moving time comes, you may be left throwing caution and money to the wind in an effort to get settled. With boxes, tape, blankets and padding, storage, insurance for stored items, labor, truck costs, and similar expenses, you could be facing a molehill of smaller expenses, that when compiled, could look like more of a mountain.

While I've gotten to the point in my life that I actually don't mind paying a little extra for the labor costs involved in moving, it's the pre-packing period where I look to save a few bucks. In our most recent move, our movers charged by the hour. It therefore behooved us to have things packed and ready to go so that there was a minimum of wasted time -- and in turn money -- during the moving process.

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Disclaimer:

The author is not a licensed financial professional. The information provided in this article is for informational purposes only and does not constitute legal or financial advice. Any action taken by the reader due to the information provided in this article is solely at the reader's discretion.