What Is FOBBABO? And Why Is It Striking Harder Now?
FOBBABO is short for ‘fear of buying before a better option’. It relates to all types of purchases but is particularly relevant in real estate, where the product is unique, and the supply of particular properties is almost impossible to gauge. After all, people choose to sell in a relatively short period of time and a suitable buyer won’t necessarily be privy to a vendor’s preparedness to sell until the sale board goes up.
FOBBABO strikes easily in real estate for three reasons;
- No property is perfect, so what may be considered a serious compromise for a buyer on one specific property may be a slight compromise on an alternative. In other words, when all things are weighed up, there will be some properties that are a better match than others. Buyers are acutely aware of the risk of committing to a 9/10 match, only to be confronted with a 9.5/10 match arising on the market after they’ve committed to the first option.
- Buyers can easily romanticise a memory of a house that sold previously. The love affair with a property they missed out on can taint their search going forward as they let the positive attributes build up in their mind to a scorecard that is not actually representative of the property. Their idealisation of the memory of the house can make every property going forward seem inferior.
- In tougher markets like the current Sydney and Melbourne market, buyers are cognisant of the market conditions and their ability to buy well. Rather than being satisfied with their selection of a suitable property, they may be tempted to wait it out in the hope of buying better if the market falls further, with the potential of improved value at their fingertips.
The problem with FOBBABO is that it can ruin a good purchase. I’ve witnessed buyers letting go of suitable options, only to regret their decision when subsequent opportunities have put their last option into perspective. Often for buyers who are just commencing their search, the question of “it’s great, but could I get something better?” is a common one.
FOBBABO doesn’t just impact buyers who are early in their search though. It can strike when a buyer is completely risk-averse and more scared of the decision itself than the enormity of buying a property. I’ve worked with buyers who have approached me after more than a year of searching. Sometimes the value of a tough property acquisition coach is what they are seeking, as opposed to a firm negotiator or a professional bidder.
One common collective who are touched by FOBBABO more than others are buyers who have inherited (or been gifted) money. The sacred cash on hand can be very difficult to spend because their emotional link to who it came from, combined with their desire to really make the purchase a special one can create challenges when it comes time to shop. Every buyer in this situation wants to ensure that their loved one’s gift is spent wisely, but in a rising market their buying power can diminish.
So, when is FOBBABO a good signal to be aware of? When a buyer is compromising on the important aspects, they need to be reminded of the opportunity to buy better. Any element that will cause them to sell early is reason not to buy. Stamp duty is expensive and there is little point in being taxed twice in a short period of time.
Causes of selling early could include;
- Unsuitable area (considering work, friends, family)
- Unsuitable floorplan/number of rooms
- Anywhere where safety is questionable
- Distance to shops/village being too far
- Road/train noise troubling the buyer
- Expensive outgoings for the property
- Higher maintenance than the buyer can endure
The best way to avoid mistakes and to be rid of FOBBABO is to have a clear and realistic checklist of the criterion that are important. I separate my buyer’s criterion into “must- have’s” and “nice to have’s”. The former are absolute. Their property must feature them.
The latter are optional, but all contribute to the scorecard. Being prepared to buy a 95%-right property is the key to successful property acquisition. No property ever scores 100% and buyers who hold out for the perfect product could be pricing themselves out of the market and wasting months, or even years of weekends while they search for a unicorn.
Buyers who have developed their list and backed their decision have invariably purchased the right product, and I know from experience that when the task is managed well, the chance of buyer remorse or FOBBABO is eradicated.