I justify it by knowing I’ll have a chair to sit in when the music stops.

We paid more than we would have liked because i) that's what we needed to do to get the house over the other bidders in a popular neighborhood and ii) we decided we would rather move to another metro area that live outside of DC (settling for Virginia or whatever). So here we are.

Anonymous wrote:I dont think anyone should be overpaying for houses. Yes "ThE mArKeT dICtAtEs prices" but...so? Houses worth 100k a few years ago are listed for almost 300k now. There will be a correction eventually. Right now people are throwing 30-40k OVER asking so yes they are OVER PAYING. It's idiotic to do that right now. The only way you're not losing money is if inflation stays for good and mortgage rates stay current or constantly increase for infinity. People overpaying and having to pay $2000+ a month for a mortgage are making a mistake but they'll regret it. Unless you're homeless or you want a ton of space for your kids then there's absolutely no reason to be buying in this current market. People will justify it any way they see fit though. They just aren't the sharpest tool...

With current interest rates it is impossible to get a payment below 2k by the way. 6 to 7% on the far majority of balances over a 20% down payment is going to cost a lot no matter what there is no hack to avoid this. It even seems impossible to get a mortgage below 3k per month actually. Math just doesn't allow it

Anonymous wrote:I dont think anyone should be overpaying for houses. Yes "ThE mArKeT dICtAtEs prices" but...so? Houses worth 100k a few years ago are listed for almost 300k now. There will be a correction eventually. Right now people are throwing 30-40k OVER asking so yes they are OVER PAYING. It's idiotic to do that right now. The only way you're not losing money is if inflation stays for good and mortgage rates stay current or constantly increase for infinity. People overpaying and having to pay $2000+ a month for a mortgage are making a mistake but they'll regret it. Unless you're homeless or you want a ton of space for your kids then there's absolutely no reason to be buying in this current market. People will justify it any way they see fit though. They just aren't the sharpest tool...

First, I am not sure where you are [posting from, with your hyperventilating over $300k houses that used to be $100k a few years ago, but it sure isn't around here.

Second, if you believe that paying over asking de facto means you are overpaying, you don't understand the housing market at all. Asking price does not define the market, value.

Third, again having an apoplexy over $2000+ a month in mortgage payments again reveals that you are completely out of touch.

Fourth, I agree that many people aren't the sharpest tools. But somehow, I think we have different people in mind . . .

If the reason you are paying a price is because someone else would have gladly paid the same price or a teeeny bit less - then you aren’t over paying. You just don’t like the current market price and or feel like the price is stable / growing.

We needed a place to live. Landlords sold the house we were renting so it wasn’t like we had time to think about it or wait for a deal. And we’re way too old to settle for a place we didn’t like.

I dont think anyone should be overpaying for houses. Yes "ThE mArKeT dICtAtEs prices" but...so? Houses worth 100k a few years ago are listed for almost 300k now. There will be a correction eventually. Right now people are throwing 30-40k OVER asking so yes they are OVER PAYING. It's idiotic to do that right now. The only way you're not losing money is if inflation stays for good and mortgage rates stay current or constantly increase for infinity. People overpaying and having to pay $2000+ a month for a mortgage are making a mistake but they'll regret it. Unless you're homeless or you want a ton of space for your kids then there's absolutely no reason to be buying in this current market. People will justify it any way they see fit though. They just aren't the sharpest tool...

You're not overpaying if that's what the house is going for. Sure, we spent more than we wanted and more than WE would have thought the house was worth, but we had lost 4 offers putting in what we thought the house was worth, so went with what the market thought the house was worth and thanks to an escalation clause and the ability to close quickly, bought a great house.

We paid more than we thought would be "fair market", because we wanted a specific lot in a specific community and have no plans to move anytime soon. Consequently we are not bothered by the possibility that future price appreciation may result in an eventual sales price which nets us a little less than we might realize had we paid a little less from the outset. Meanwhile, we have the house we want, in the location we wanted, and we'll participate in the overall market trend for houses like ours, where ours is. We may make a little money over time, or a lot, but given that good well-maintained homes in good locations always increase in value over long enough periods of time we're unworried about actually losing money at the end of the day. And, if we do lose money, so what. Our home equity is only a small part of our net worth, not our entire nest egg. We wouldn't be happy if we sold for less than we paid, but it wouldn't break us, either, and meanwhile we're living where we want to - the house is a place to live, not an investment, even though it may rise or fall in price.

At any point in time we may be “overpaying” because the future is uncertain. Jump in, or don’t! Nothing is for sure. This market is unprecedented but from what I am reading, home prices around here are very unlikely to decline soon.

We really thought we overpaid in 2001 (and at closing the seller wanted to know where I got my mortgage at 6.25% because it was such a good rate) but figured we were in it for the long run.

Yeah, I bought in Springfield in 2021 and paid $60K over list. By the next year, the house "value" on Redfin etc was $75k up and now we're closer to $200k. And that's in friggin Springfield. I paid what I paid to get a house I wanted in a decent part of the school district. It made me queasy for a long time, but we'll be here for the next 15 years so I figured it was worth it.

You can't lose money buying a house.
You only lose money selling a house.

Anonymous wrote:We move every 3-4 years, overpaying isn't a huge deal since we won't be living in any specific house for very long. It's almost like high rent but no one complains about our cat.

Overpaying is much riskier for you, because you taking the risk of losing when you sell.

Anonymous wrote:Felt like I overpaid for a house in 2021 with a 2.75 rate. Now my house is worth probably 500k more at today's rates. It's all relative. But plan on prices going nowhere but up.

Yup, we bought our house in 2021 and I 100% felt like we overpaid. Because we absolutely need a place to live and had to be out of our old house in a matter of weeks.

So we were aggressive in our bids, but there was definitely immediate buyers remorse and a feeling that we seriously overpaid.

Fast-forward only 3 years and house has appreciated much like PPs (probably closer to 350k, not 500k, but still).

At the end of the day, you need a place to live. Ideally for a long time, to raise your family. Worry less about overpaying, and more about getting the right place