Buyer's remorse

[burritos]

You're fine. Stop worrying. Worrying is carcinogenic. (persistent elevated cortisol-->persistent elevated glucose-->persistent elevated insulin = elevated IGF + reduced autophagic flux + reduced lipolysis = induction of a glycolytic metabolism(ie warburg effect) = reduced mitochondrial efficiency = diminished oxidative stress reduction = more mitochondrial damage/lipoperoxidation/ER stress/nuclear injury = P32 dysregulation = various histopathologic carcinoma induction which will present 10-30 years from now.) What's done is done, so gitover it.

[uksho]

We are a physician couple who have prided ourselves on our financial prudence but are worried that we may have done something that has the potential to alter our financial trajectory. We are 9 and 6 years out of training respectively with a combined income of ~500k and a current net worth of about 2.5 million. We have never had any debt, until now.

We have been renting ever since graduation and generally followed the "live like a resident" and bogleheads investing philosophy. We recently started looking for a home now that our child is about to start elementary school. After many months of looking, we finally found the perfect home in a very nice neighborhood with great schools. The list price was 900k. After a brutal bidding war this price got escalated to 1.15 million. We plan to put down about 400-500k and finance the rest. Redfin and Zillow price the home at approximately 950k and we worry that we have grossly overpaid but know for a fact that at least one other buyer was paying the same.

While we're happy that we found the perfect home that we're in love with, paying 250k above list price feels like undoing all of our previous hard work. We always had an option of waiting out the market frenzy but we decided to live by our rules of not trying to time the housing/lending market when our family situation required us to buy a home.

we have the remorse of not buying , you will be fine

[AR]

We are a physician couple who have prided ourselves on our financial prudence but are worried that we may have done something that has the potential to alter our financial trajectory. We are 9 and 6 years out of training respectively with a combined income of ~500k and a current net worth of about 2.5 million. We have never had any debt, until now.

We have been renting ever since graduation and generally followed the "live like a resident" and bogleheads investing philosophy. We recently started looking for a home now that our child is about to start elementary school. After many months of looking, we finally found the perfect home in a very nice neighborhood with great schools. The list price was 900k. After a brutal bidding war this price got escalated to 1.15 million. We plan to put down about 400-500k and finance the rest. Redfin and Zillow price the home at approximately 950k and we worry that we have grossly overpaid but know for a fact that at least one other buyer was paying the same.

While we're happy that we found the perfect home that we're in love with, paying 250k above list price feels like undoing all of our previous hard work. We always had an option of waiting out the market frenzy but we decided to live by our rules of not trying to time the housing/lending market when our family situation required us to buy a home.

You're fine. Don't sweat it.

[mamaham]

Did your lender do an appraisal? Was it saying you “overpaid” by $250k?

I agree with others. Everyone is paying over price right now. You stayed within the acceptable loan amount and have down payment. Stay on track and you will be fine.

[Kamban]

The list price was 900k. After a brutal bidding war this price got escalated to 1.15 million. We plan to put down about 400-500k and finance the rest. Redfin and Zillow price the home at approximately 950k and we worry that we have grossly overpaid but know for a fact that at least one other buyer was paying the same.

This brutal bidding war has spread from VHCOL to even rural areas and all in between. Recently a friend agreed to 330K asking list price and the seller came back the next day stating that they had 10 offers with 370K as the good one but gave one final chance of 360K cash offer. I wanted to say heck with it but went to check the house one more time. While we were there we saw 3 families going through the house and ready to bid on it. We swallowed our ego and pride and agreed on the 360K. We got in in the nick of time. BTW, no contingency or inspection, an as-is cash offer.

[Kamban]

Sometimes you spend far more that what you initially planned for. I started out with a 3500 sq feet house to be built for 650K in 2016. We ended up with a 7500 sq foot house with all the extras for $1.5M. in Dec 2019. I thought that that was not we planned for. In retrospect, with the last 2 years of massive house building price increases, I was glad I was stupid in going higher and higher. Could never build my house today for $1.5M.

[Turf Doc]

This is why waiting beyond finding stability and know what you want makes no sense. You're either slowly saving it into an account to pay for the down payment, etc...or you pay a monthly mortgage thats maybe higher, all the while just building equity and getting ahead. Its a left pocket to right pocket issue though usually framed as if its something entirely different.

Oh well, its over and there is always buyers remorse, even if you get a great deal.

Yeah i havent really understood this either. If you pay more in a downpayment all you're doing is guaranteeing that amount in interest rate as a guaranteed return right? But like you said, housing may keep going up in the end. I guess though, the longer you are willing to have a "worse" housing situation, the more you can save whether it's toward a downpayment or investing, so it's not really apples to apples

[Anne]

The whole point of having good financial habits, saving, living like a resident initially out of training, etc., is so you can eventually live the life you want without stress and not sweat the small stuff. This is the small stuff. Houses are purposely priced a bit on the low side right now to promote a bidding war. Congrats on getting the house.

[Hatton]

Congrats. You have done everything right and you deserve a nice house. These are the times we live in.

[WorkforFIRE]

don’t sweat it. Enjoy the house. House is only worth what someone willing to pay for it. Who cares what Zillow or Redfin says.
If it makes you feel better, we’re similar to you, no debt, similar net worth, financial habits, and household income. Overpaid by ~75-90k. But we were fine with it. Good area. Good schools. Close to work. We love the neighborhood.
In the grand scheme of things, it’s not a big deal

[fatlittlepig]

We are a physician couple who have prided ourselves on our financial prudence but are worried that we may have done something that has the potential to alter our financial trajectory. We are 9 and 6 years out of training respectively with a combined income of ~500k and a current net worth of about 2.5 million. We have never had any debt, until now.

We have been renting ever since graduation and generally followed the "live like a resident" and bogleheads investing philosophy. We recently started looking for a home now that our child is about to start elementary school. After many months of looking, we finally found the perfect home in a very nice neighborhood with great schools. The list price was 900k. After a brutal bidding war this price got escalated to 1.15 million. We plan to put down about 400-500k and finance the rest. Redfin and Zillow price the home at approximately 950k and we worry that we have grossly overpaid but know for a fact that at least one other buyer was paying the same.

While we're happy that we found the perfect home that we're in love with, paying 250k above list price feels like undoing all of our previous hard work. We always had an option of waiting out the market frenzy but we decided to live by our rules of not trying to time the housing/lending market when our family situation required us to buy a home.

U need to chill out.

[Zaphod]

Yeah i havent really understood this either. If you pay more in a downpayment all you're doing is guaranteeing that amount in interest rate as a guaranteed return right? But like you said, housing may keep going up in the end. I guess though, the longer you are willing to have a "worse" housing situation, the more you can save whether it's toward a downpayment or investing, so it's not really apples to apples

maybe, but you end up in same place regardless and much higher likelihood you also have capital gains on the home as well.

[Max Power]

Yes, you probably screwed up royal (paid over market price... and bought in a peak market). Buy once, cry once.

No, it won't matter much (fine as long as you ride the dip and rebound of the housing market, which you plan to based on kid).

The only detrimental thing right now or in the next 5 years would be a divorce or a drastic income loss (fired with non-compete, etc) or selling into a housing slump (would usually tie with the divorce +/- drastic income loss). That would alter the trajectory quite a bit. Overpaying for an asset that generally goes up in the long term and you plan to camp at awhile is quite easy to recover from.

[MW_doc]

Thanks to all for the thoughtful and encouraging responses. Yes, we probably overpaid since that is what our situation demanded we do. The only way to not overpay would have been to be detached about the entire process, which for us was hard to do while looking for a primary residence since too many things depend on it.

We saw about 40 houses and had ranked this one at the top before placing the offer. What I find unbelievable is how much the market in my small midwestern college town feels like what I've heard about the coastal cities. Homes are on the market for 2-3 days and the moderately good ones are easily going 100k over asking.

[Hank]

Thanks to all for the thoughtful and encouraging responses. Yes, we probably overpaid since that is what our situation demanded we do. The only way to not overpay would have been to be detached about the entire process, which for us was hard to do while looking for a primary residence since too many things depend on it.

We saw about 40 houses and had ranked this one at the top before placing the offer. What I find unbelievable is how much the market in my small midwestern college town feels like what I've heard about the coastal cities. Homes are on the market for 2-3 days and the moderately good ones are easily going 100k over asking.

It’s a college town with a good med school. I wouldn’t be terribly surprised if the South Bend, Boulder, or Ann Arbor real estate market acted like a coastal city even though they’re far from Manhattan and San Francisco.