What does a threshold price for buying a home mean or matter?
A threshold price is one at which you can be confident that you are offering a fair price and that, in the future, if the market does take a downturn, your financial world will not be turned upside down.
I have been in several offer situations, won some, and some say ‘lost some,’ but my clients can’t lose something they never had. My clients and I set a threshold price and stick to it; we try to keep emotion out of it and avoid one of the biggest motivators in the world: “fear of missing out.”
Not long ago, homes received 7-15 offers without conditions, and some sold 12-18% above the asking price.
Jim Rohn wrote: “The pain of discipline weighs ounces; the pain of regret weighs tons!”
Speculation is dreaming, and though we read about the money that less than 5% of speculators say they make, we very seldom hear about the other 95% of speculators who lose. It may not be in the short term, but second and third-order consequences can come back to haunt you.
History does not repeat itself; only humans do.
I have rearranged one of Warren Buffett’s beliefs and changed the word stock to property: “It is far better to buy a wonderful property at a fair price than a fair property at a wonderful price.”
If you are in the market to buy a house or a condo in the London, Ontario, area and want a prudent advisor and Realtor to help you with your threshold price, what more can I say?
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