How to get over the house that got away
By Sandra Fleishman,
It was the “perfect” house. A unique design. Spacious. Lots of alcoves, with bench seating in the windows. Expansive master suite. Stonework. An Old World feel. In the right neighborhood for close to the right price.
That’s how Marc Macenka wistfully describes the house that got away: a Dutch colonial in Carroll County, Md., that he and his wife, Deanna, lost to another bidder a year ago. They had envisioned living there with their then-2-year-old from the moment they saw it. With a second child on the way and the market and interest rates in their favor, they’d hoped to move quickly from their split-level home of 17 years in Linthicum.
But it was not to be.
“We were pretty disappointed,” remembers Macenka. He was also “furious” when he found out that he lost to a bid lower than his $605,000 offer because the buyer was a friend of the seller’s and had expressed interest before the house was listed at $650,000. The seller could still make money at the lower price because, with the sale to a friend, the seller had to pay only a 3 percent commission to his real estate agent. That’s about half the commission the seller would have owed had Macenka or another buyer closed the deal.
Now, with their second child only a month old, Macenka says the family is taking “a break” after losing out on “several houses” and passing on a dozen more. The family still compares everything to that first house and has found them wanting, says their new agent, Taylor Connolly of the online realty firm Redfin.
“We think about it so much. We check that neighborhood all the time,” Macenka says.
How to get over the house that got away is a common problem, real estate agents say. It’s particularly difficult for first-time buyers who can swoon over good looks — the decor, new carpet, curb appeal — rather than inner beauty or good “bones” — like a nice layout where an old kitchen can be updated easily or where the bathrooms may be passe but large.
Houses for sale in trendy neighborhoods in the Washington area can break the heart of many at one blow, since bidding wars are common again, agents note.
But with all-cash buying at a record high — 35 percent of national sales in March, according to the National Association of Realtors — those looking for deals can be unlucky in love. Even if offers come in at list price with a generous down payment, many sellers decide that an all-cash buyer trumps other bidders. With an all-cash deal, the house doesn’t need to meet the appraisal required by a lender.
“I have many agents who have experienced [the-house-that-got-away syndrome] recently,” says Holly Worthington, a broker at Long & Foster Woodley Park and Chevy Chase. “Some buyers quit looking altogether, and others move on and buy something else quickly if they can,” Worthington adds.
“I have a client who missed out in Great Falls and really hasn’t recovered yet,” says Trudy Severa, a Long & Foster agent in Ashburn.
Richard Oder, a Long & Foster agent in Woodley Park, says a couple of clients lately “have kind of had a hard time understanding how they can lose. All they’ve been hearing in the media is how down the market is, but in the Washington, D.C., area, in sought-after neighborhoods, we’re seeing more offers” and multiple bids. A recent client’s hopes were dashed when a fetching Georgetown property — wider than most, with lots of windows, big rooms and a garage but needing some work — drew 11 offers. It sold for $100,000 over the $1.025 million list price.
Lower-priced homes can also slip away quickly if buyers misjudge interest and bid too low. “It’s especially a problem for first-time buyers,” Oder says. “It takes a while for them to learn how to deal with this situation.”
Vinh Nguyen, owner broker of Westgate Realty Group in Falls Church, agrees. “Most of them do not believe it when we tell them that the market is not slow” in many areas, says Nguyen, whose 155 agents deal mostly with Vietnamese and other ethnic groups. “They have to lose one or two houses before they believe us.”
Glenn Kelman, president and chief executive of Redfin, says his firm’s follow-up statistics demonstrate how many folks may be pining. “Fifty-eight percent of the customers we work with win their first offer,” he says, “which means that 42 percent are heartbroken.”
But agents say buyers need to learn to move on and will often find that they’re happier that they didn’t get what they thought was their dream home. Several agents say their first job is to help prepare buyers avoid emotional entanglements with a house and then counsel them on how to get over it when the affair ends.
“The first thing we do is tell them that it wasn’t meant to be,” says Karen Trainor, managing broker of Weichert Realtors in Ashburn and president of the Northern Virginia Association of Realtors. But before they go shopping, “we explain that they can’t get caught up with emotion. . . . It’s a business transaction.”
In a multiple bidding situation, “We first help them get a very good clear idea of what the price will be,” she says. “If they’re totally involved in the process, if they lose it, they don’t take it so bad.”
“My agents … tell their clients that they really have to get back on the horse again,” Trainor says.
“You don’t write it all off just because you didn’t get one house,” advises Oder. “You have to do everything you can to make yourself look attractive. . . . Do a pre-offer home inspection so you can make a non-contingent offer. . . . Get your financing lined up. Make a realistic offer: Don’t pay too much, but don’t offer too little, either.”
Ashburn agent Severa says “We encourage them to make their best offer. To push themselves a little bit beyond what they think is their limit if they really want a house. We had a family that missed out on a million-dollar house by about $5,000, and the client said, ‘I’d have gone a little higher if I’d known.’ But you don’t get a second chance.”
Still, says Chevy Chase Long & Foster agent Jennifer Knoll, “you have to decide what it’s worth to you. There will always be a house that you love that’s more than you can afford.”
Trainor says her agents advise buyers “not to get so in love with the house that they fail to realize that they have to pay for it.”
It’s the same in personal romance as in house-hunting, many advise.
“You can make an analogy in this situation to getting over your first love,” says Michael Seiler, a business professor at Old Dominion University who specializes in real estate psychology. “If you think that there’s only one true love in the world for you, then you’re going to be in trouble. But that doesn’t mean that you can’t find a second person in the world that you can fall in love with.”
So should a buyer mourn for a bit before venturing out again? “Well, you can sit around and have a little pity party,” Seiler says. “But then you should get out and look around.”
If you get too emotional, you can fall prey to bad decision-making, he cautions. “There’s an old saying: Love at first sight is often cured by a second look,” Seiler says.
Agents note, though, that you may not find a lot of good-looking candidates this spring because inventory is low.
“There are no pretty houses to sell,” says Kelman, because owners think prices will be better in 2012 and are holding off. “When a pretty house becomes available, there’s a bidding war.”
For those looking in the most popular neighborhoods, that might mean you will have to wait a while, says Oder.
Still, nine times out of 10, Trainor says, “the house they end up buying is basically a better fit for them.”
Kate Kaliardos agrees. She and her husband, Bill, “really wanted” a fixer-upper in Takoma Park in February 2010. “It was a very cute house, with lots of windows . . . a huge yard and it was very close to the Metro,” Kaliardos says.
With 12 bids on the Craftsman-style bungalow, the first-time home buyers did a pre-contract home inspection (so they could sweeten their offer by omitting an inspection contingency) and included “a pretty crazy escalation clause” to outrun the competition. They also hoped Bill’s Greek heritage would “give us an edge” with the Greek family selling the estate house.
But their bid came in second, according to their agent. Although they had offered 30 percent down, the winning bidder offered more cash and no appraisal contingency.
“We were devastated, and it was hard going back to searching,” says Kaliardos. “I had already in my mind started remodeling the house.”
But the couple didn’t give up, and they soon bought an older home in American University Park. Their new home “is not as charming” as the Takoma Park bungalow, Kaliardos says. But, in hindsight, they say they’re glad they didn’t get the bungalow because they are now more aware of how long it takes to make repairs — and how expensive it can be. “That place would have been a time and money pit,” she says. “We also like our current location much better.”
Nguyen says his advice to disappointed bidders is simple: “You have to detach from the emotional. . . . There will be another house for you. You didn’t know this house two weeks ago, and so you don’t know what you will see in the next two weeks. But if you really love something, you have to try your best . . . to get it.”