Buying a home is ahigh-stakes game, often with hundreds of thousands of dollars on the line.
When I took a new tech job offer in 2017, it meant leaving San Diego forSeattle.
So I decided to divide my search into two phases.
The most significant tradeoff to be made when choosing is location versus home size.
Manyhomebuyersmake this same compromise.
You must have a go at avoid falling in love too quickly with a home.
Block out any and all thoughts about hosting holidays or your children playing in the backyard.
People value a home more if they already feel like they own it.
Behavioral economists have a term for this: the endowment effect.
In one experiment, test subjects were given either a lottery ticket or cash.
List prices can also be misleading.
This amounts to a bait-and-switch.
As a buyer, don’t take the bait.
Don’t anchor your expectations on thelisted price.
The participants were then asked to guess the share of African countries that were members of the UN.
Participants whose spin landed on a lower number were more likely to guess a low number.
Participants whose wheel spin landed on a high number were more likely to guess a high number.
The list price of a home may contain some helpful information about what the seller believes its value is.
But ultimately the value of the house is set by the market.
If you gotta, take a break.
A study published in Health Economics found that orthopedic surgeons made worse recommendations toward the end of their shifts.
Also, avoid following the herd.
It had everything my family was looking for.
So I kept looking.
When buying a home, you have no choice but to concern yourself withresale value.
About a month later, we found a home that seemed too good to be true.
Ample space, close to public transit, even a view of Puget Sound and the Olympic Mountains.
Since we were renting elsewhere, we could delay moving to get this work done.
Things go wrong after you buy a home.
The challenge, then, is to consider the risks and whether they are worth the reward.
Any of those things could happen to me.
But I still had a nagging feeling that I was overextending myself and overpaying.
What if the roof sprang a leak?
I could have kept going down the list of unlikely catastrophes.
Instead, I focused on the unlikeliness of the scenario rather than the pain of the scenario.
This helped me get out of my head and back to the task at hand.
I shuddered at the thought of a bad scenario, likebeing laid offduring asevere recessionand housing-market downturn.
The home was listed at $840,000.
I submitted my bid on the home for that amount.
If the market is cool, it’s advisable to come in low.
Even though I offered $840,000, I was ready to go as high as $940,000.
No one else even submitted a bid.
Copyright 2025 by Daryl Rose Fairweather.
Printed by arrangement with the University of Chicago Press.
