FOMO is the “fear of missing out” while JOMO is the “joy of missing out.”
This fear can affect the decisions you make about important things in your life. For example, you may fear missing out on a great deal for a car so you buy one sooner than you had planned on. Or you placed it on credit rather than saving up to buy a vehicle for cash.
In the current real estate climate, FOMO creates bidding wars and drives up prices. This seems like a great idea for the seller, but not so good for buyers. But, FOMO can even cause a seller to place their home on the market sooner than they should.
Some results from these market trends include:
- Needing to request a lease-back
- Not having a new home to move into once yours sells
- Buying a home before you’re ready
- Buying a home for a higher mortgage than you planned on
- Not having enough down-payment
- Lower appraisals than the bid price
Each of these items causes hiccups for both buyers and sellers.
Here’s how to avoid FOMO and experience JOMO whether buying or selling.
FOMO for Sellers:
Just because the market is moving doesn’t mean you should “time the market” when it comes to selling your home. After all, you live there. Selling is a complete disruption of your lifestyle. If you’ve been thinking of selling, work with a qualified real estate agent to help you understand when is best for you to place your home on the market. You may need to complete some upgrades or refurbishments before your property gives you the “sought after” response you’d like it to have. Or, your home may be in the range that is selling super fast, so let your agent help you find a new home before your house is sold out from under you.
Your agent may be able to negotiate a lease-back with the buyer, but not always. A lease-back is when you sell your home and then lease it back from the new buyers for a set period (say three to six months) while you find a new home or complete new-home construction. But many lenders will not allow lease-backs beyond 90 days at which time the buyer has to take possession of the home (whether you’re ready to move out or not).
Other lenders will not allow lease-backs at all. To them, the lease-back makes it an investment property rather than a primary residence, so different rules apply. Make sure to disclose to your agent and any buyers that this is a requirement to sell your home. Have a specified date that you intend to move out so that the buyer can in turn negotiate with their lender.
JOMO for Sellers:
The best advice is to move when you’re ready. When is that? Only you know for sure, but a savvy realtor can help you figure that out. Once you know the earliest optimal move date for your family, your agent can market your home to sell it. If you are selling to buy, let your agent work out the details of both transactions–selling one home and closing on the next–so that you’re not in limbo for too long. Then, you’ll have the joy of missing out on the extra hassle of being between the old home and the new.
FOMO for Buyers:
You see prices on homes in your target neighborhood continuing to climb with no end in sight. We get it! You don’t want to miss out on being able to afford a home. But jumping in blindly simply from fear that you’ll miss the window of opportunity is a good way to trigger buyer’s remorse. You may regret jumping on one house too soon without checking out what else may come on the market.
Or, you might end up in a bidding war and end up with a higher offer than you planned on or that you have loan approval for. If you have to back out, you may lose your earnest money. Finally, you might have your offer accepted only to find out that the appraisals haven’t kept up with the market rush and you have to increase the size of the loan and get a new approval or increase the size of your downpayment, making it difficult to do all those little things a buyer likes to do (new carpet, paint, fixtures, etc.).
JOMO for Buyers:
Your qualified professional real estate agent better understands the flow of the market. If you think you are in the market for a new home, schedule a consultation. Set out your needs and budgetary constraints to see if buying a home right now is right for you. You may find out that a smaller home or more distant development or neighborhood outside your target area can get you into a home that meets all of your needs and stay within your budget.
Working with an agent also means better access to information about comparable properties. You may be able to get your lender to have their appraiser reevaluate a location based on the most current data. That way, you can have the joy of missing out on the pain of buying the wrong home or even the right home for too much and straining your budget.
You can read more about FOMO in home-buying in this article: ‘FOMO Took Over.’ Some Buyers Who Caved to a Hot Housing Market Now Regret It.
We’re ready to help you determine whether it is the right time for you to buy or sell. Reach out and we’ll schedule a time to go over your needs. Or, check out the market report for your county, city, or neighborhood here.
Here are some homes you can check out in the meantime to get an idea of what you like and what works for your family.