The Nobel Memorial Prize for Economics was awarded for insights including what happens when you’re bidding on a home — in auctions, private sales and Expressions of Interest.
Winner’s Curse. Is that even real?
Well … yes.
Say you’re working out how much to offer in a private sale or EOI. You check everything. All the predictions, all the valuations. You’re sure how much that home should sell for.
And then …
You decide that it’s perfect. Exactly what you need.
You don’t know what anyone else is ready to pay.
OK. You’ll pay what it takes. You’ll stretch yourself to breaking point and knock everyone else out.
Later, much later, the agent lets on that you paid for an orchestra when you could have got it for a song.
You curl up into a little ball. You sob.
You’ve been hit by the Winner’s Curse.
You started from the wrong place. You need to begin with how much that home is worth to you.
When you know that, the offer you make will be a no-loser.
You win at a price you can justify or live to bid another day.
You need some good advice.
Morrell and Koren were Australia’s first home buyers’ advocates.
At the top end, there’s hardly a home that we don’t know.
Top End Trends is an insider’s view of the highs, the lows, the clever and the not so clever in all kinds of real estate and its buyers, sellers and (often) estate agents.
© Morrell & Koren Pty Ltd