After a few days to recover from last week’s stress we’re back seeing available properties which may meet our needs and budgets. Our Realtor did send over an interesting house, this time one which needs no serious work, and we’ll see how that goes.
What I’ve been thinking about this week, in the aftermath of ContractorGate, is how differently people view expensive and inexpensive purchases. Houses and cars compared to, say, food or toiletries. People have completely different, conflicting mental models about the two types of buying.
One reason some people still get the dead tree version of the local newspaper is the coupons and circulars stuffed in the Sunday edition. TS1 does it for us and if she didn’t I would. Saving 50 cents here and two dollars there seems meaningful to us, and we look at other small items, like movie tickets and restaurant meals, the same way. Not that we eat at KFC rather than Fresh Gardens…
Then you look at big ticket deals: houses, cars, fancy vacations. Forget 50 cents or two dollars, for these deals the marginal discussion is over hundreds or thousands of dollars. Even computers almost reach this level.
Let’s say you see a home listed for $865,000 and it meets your lot size requirement, quality is good, location suits, plus you expect to spend $60-80k getting the house from 1480 to about 2000 square feet. The back and forth:
- You offer $805,000.
- You originally thought $800k as a starting point but maybe the seller would be insulted
- Seller isn’t insulted but comes back at $849,000. (Ooh, that’s too much!)
- You counter with your final, best offer at $818k
- Seller says nothing less than $840k and you say, okay, not from us and done.
Notice in all this back and forth the numbers move at increments of thousands. Lots of thousands.
How many coupons do you have to use and bottles of vitamins and minerals do you have to buy on sale to make up for that?
BillSaysThis 