In a competitive market, buyers are often stressed about bidding wars. You are competing with 3-5 buyers and finally you win. Most buyers react with excitement after they win the bid and can't wait to move into their new home. 30% of my buyers who win the bid experience what's called "winner's curse," similar to buyer's remorse. It's a normal psychological reaction. You may have made multiple offers and lost. You became more aggressive with each bid until you finally won. And when you won, you forgot how badly you wanted this house before and the pain of losing in the previous bidding wars. You began to suspect that you did a stupid thing. You started to question the sanity of your decision. You wondered if you overpaid for the property. These normal negative feelings that a buyer often experience after their offer is accepted, is called "winner's curse."
Let's understand the reasons for winner's curse.
When a home is put on the market, it is often staged by an experienced realtor to present it in the best light. A home always looks bigger with the staging furniture in it, and the way it's staged is designed to showcase the property in the best possible way. After an offer is accepted, an inspection tour is scheduled for an inspector to examine the property. The inspector points out the things that need to be replaced or watched out for (as they routinely do about every single property). Not having been through any inspection tour, you start to get nervous about all the things the inspector says about the property. The property always looks smaller without the furniture. You begin to question whether you made a wise decision to pay what you paid for this home.
Inspection issues are legitimate reasons to back out of a deal. However, 30% of buyers experience what's called "winner's curse," the predictable low points in buying a home, even when they were totally set on winning the bid before their offer was accepted. It's normal human psychology to feel like you must get something, and you want it even more when you don't get to have it. But once you have it, you wonder if there is something better out there, or you wonder if you made the wrong decision. This buyer's remorse feeling is especially eminent when buying house, when you are making one of the most important decisions in your life. After all, to a lot of buyers, they are dealing with their lifetime savings. It's a lot of money and a lot of stress, and Boston being the seller's market doesn't make it easy. Sometimes buyers cannot act rationally about these things and little details about the property that come up later can scare them away, or they start to distort what they see. It is important to stay calm during the home-buying process and have a realtor you can trust to walk through the entire process together.
An experienced realtor can advise their clients about the inspection and help them get mentally prepared for what happens after their offers get accepted, including this common "winner's curse" psychological experience. The more prepared we are, the more smooth the experience.