I am having a bit of FOMO at the moment, but it isn't over getting in on the latest crypto bandwagon, it is over a house. My wife and I went back to the scene of the potential crime today, armed with a couple knowledgeable friends and my father-in-law as second opinions. I really like the place, but I am trying not to let my hopes get away from me as I know that the chance of getting a successful bid in at our price point is slim - but not impossible.
When my wife and I were discussing our opening offer, she chose a nice round number and one that is low-balling them, but considering the work that needs to be performed, not impossible if they are in a rush to get out. However, I suggest upping the offer a little bit so that it is off the round number. @edicted talks about unit bias relatively often and you can see it in trading a lot, where people choose "random" sell and buy points that essentially stack on top of each other.
Then you get something like this where the round number has sells put on it and then other sellers will try to front run to get bought up just under the whole number. I have missed many buys and sells from setting them to close to whole units for as you can see, the 6,500 at 2100 sats won't sell until the 60,000 at 2098 sats goes through. And then some others are trying to sell before they have to face the wall above. Not sure if that is a good example, but you get the idea.
When it comes to buying things, we also tend to favor the "just under" amount, and shy away from the click over to the next unit. This is why there are so many things that are on sale at $1.99 instead of an even 2 dollars. As even though there is only a 0.5% difference, the head sees the first number change from a 1 to a 2 and suddenly it looks a great deal more expensive, or a bargain at $1.99, even though it might not be worth anything near that.
I often see unit bias appear in corporate project planning, where at the start of an undertaking with very limited information, a time frame is given, one month, six months, 1 year and so on. These times are chosen arbitrarily without any kind of knowledge or much foresight and they become the end goal or milestones to adhere to, that make projects early or late without ever considering the reality of the situation. In general, a project takes the time it takes and under perfect information and actions, it is very unlikely to fall on an unit of 6 months or 1 year.
Of course, it is easier for us to mentally handle round numbers, which is why we lean toward them so heavily. 11% of 100 is easier to calculate and visualize than 11% of 106. While there are obviously variations between individuals, we aren't overly suited to doing mental arithmetic and once compounded interest rates and annuities start to come into play, we lose track very fast, which is why so many people fall into loans that they can't afford.
There are so many cognitive biases that surround numbers that those who design the system can set traps all over the place, including the general sense that we will be in a better position next month - the credit card trap. Most people who use credit cards think it is a one off and that next month they will pay it back, without factoring that they had to use it this month already, so next month they will have to have their normal costs, plus pay the additional back. Many slip up and then slowly fall more and more in to debt. The debt cycle.
And then there is FOMO.
Not only are there the debt traps to contend with, our own desires to have our wants fulfilled will push us into a kind of intoxicated state where we do not think clearly and are more open to jumping in, even if the deal is not as sweet. What we are pretty confident on is that the renovations that we would do would increase the value enough that we would have put significant sweat equity into the place if we did have to sell in the future. Is this just FOMO talking and I am overestimating my own ability to work?
Maybe.
But at least thinking out loud lets me reflect on my thoughts and perhaps discover if I am biased by the fear of missing out or, biased by the fear of change. This would be a change for my family and is a big commitment in time, money and effort - but I think that the potential and eventual result will be worth it and after seeing the place again, my wife is much more keen than she was earlier to take the risk.
As I have said before, I have a pretty good imagination for seeing what could become of what might look like junk and the same process takes a bit longer for my wife to visualize. Once it had stewed for the week and on the second showing, she saw things from a different perspective. She is in the throws of FOMO too now it seems and I guess we will put in an offer :)
I am pretty excited
...Damn FOMO...
Taraz
[ a Steem original ]
Exciting and nerve wrecking all in one! Glad to hear you have your sights set... Hope you get it, but... if you don't - then it was never meant to be anyway :) Well, that is the way my mind ticks anyway.
Now the wait starts.
Can't really do much if we miss out and there will always be more on the market - but I do like this one... ;D
!ENGAGE 30
Well there is much to be said for the power of intention :)
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Thank you very much @tarazkp :)
Fomo is a bitch when it comes to buying a house. On the other hand you guys are not necessarily in a position where you are in a time crunch that some other people might be, so my advice is to decide first what the maximum bid will be and then if you don’t get it just wait for the next chance.
yeah, we are not in too much of a rush, but I really like this place and location. Worst case is, we lose everything and become renters =)
Haha I have a good feeling that in the not so distant future all your hard work here at Steem will pay off and the only renters you will see are the ones wanting to lease your steem power ;)
Lols, I will send that to my wife as evidence that I am not the only crazy one!
Haha a good idea :)
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If this house is meant to be then it will come your way. It's just like life. Everything happens for a reason, and you just have to wait it out.
I am not sure about the everything happens for a reason, but I do think that we can always find a meaning as to why something did or didn't. Will be an interesting few days I guess.
Good luck I will be holding thumbs!
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Take a good look at what else is for sale of similar size and location. See if there is a price gap. When I was selling one of my homes there was a price gap in the homes for sale in my area. Lower prices were 100,000 basically, then the next housing price level was 150,000. People pay attention to price when it comes to houses, and some of them will look at two houses, and decide to buy the more expensive one thinking it is a better deal, (Price Snobs they do exist). I really did not want to move, but we were growing tired of the increasing noise in the neighborhood. So Since I did not really want to move we set a price right in the middle of the price gap zone, they offered a little bit less but we still made a lot more than I felt the home was actually worth at the time, so I had to move.
Look to the future, are you going to be able to find a price gap in the housing prices in the future? Of course nothing is guaranteed, look at the location, does the potential home offer easy resale-ability? I know you have likely thought of these things. Also look at what are the deterrents to the area? High traffic location, long commute, lack of green spaces, of shopping, noise, schools. Point out a few of the bad things twist a few of the pluses to bad things when you talk to the realtor and make your offer. I don't know what kind of rules your country has for buying and selling a home, but here in the states, or at least where I live, the realtors all talk to each other, (even though their not supposed to).
The sellers may hear why you priced your offer at the level you made, and think twice about an open rejection.
We have looked at similar "move in ready" places that are about 75% higher in price without having as many of the benefits. Good location, low traffic, parks, close to lake, close to shopping, good public transport, schools etc. I think that byt the time we sell (if we sell), it would be well positioned in the area as a larger renovated home, without being excessively expensive. The alternative would be apartment living for a higher price or a large shift up 50% again. Plus, I think we can make it pretty :)
!ENGAGE 40
That's what my wife and I did on the homes we bought and sold, get something that needs a little work, make it pretty, and by then it is time to move again. I've moved way to much in my life, and I hope our next move will be the last. It would be nice to watch a tree grow.
This is part of why we want to get into a house now. Perhaps our daughter can't plant a tree, but I think I am too old to see it mature :)
In my country we got a similar strategy and because people love to negotiate the sellers put the amount high. Means if you are selling for 120.000 and that's what you want, you write 125.000 or 130.000 because you have to act as you are putting the price a bit down for the buyer :D
Yep, it is the common way, but in Finland there seems to be less wiggle room in the prices as people ask for what they want, instead of make the impression of giving a discount.. silly ;D
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I look forward to seeing how this turns out. I'm sure you'll end up making the right decision; and it sounds like either way you won't regret overpaying.
Yeah, we have worked out our max price we will pay so, what will be, will be. At least, I won't ned to look for a project for the next few years
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Unless you really love these types of projects I would say you're overestimating your ability to do the work given your health issues, the cutest toddler on the planet with health issues, and at least two full time jobs on top of that XD You need to sleep sometimes you know :D
Ahh I remember them FOMO house feelings well, do not mis them in the slightest XD Good luck :D
Me too... but don't tell my wife. Hopefully Steem moves significantly so I can pay someone to do the heavy lifting :D
That would be nice XD
I've relied upon, and fostered fomo in others in the course of doing my job over the last 17 years...Works a treat to get the price up or more favourable conditions for my client. Try and hide it a bit when you place your offer though.
Yep, we offered a bit more than we originally would, but not significantly so, just enough to make them seriously consider it.
Yep, offering an odd number indicates you've wrung your own necks a little too; Turned the pockets out as such.