I’m in the process of buying a house, which is why I’ve been blogging a little less frequently. This week the house was inspected and a major problem found, and yesterday I had to decide how to respond to the seller. It was a difficult decision that I had to make under time pressure with inadequate information; I hated having to make it. My choices boiled down to asking for more money to fix it, and risking losing the deal, or asking less money and risking having to put up a lot more of my own money to fix the problem. I went with the latter, and am, predictably enough, agonizing now about the what-ifs involved (if I had gone the other way it would be a different mental anguish).
So a recent article about Daniel Gilbert’s research on happiness caught my eye because it opened with an example about buying houses. The standard real estate advice is to buy the least desirable house in the best neighborhood, which might be sound financial advice, but not a guide to being happy. Because we make comparisons between what we’ve got and what the others have got, the potential for unhappiness in a lesser house surrounded by nicer ones is great. The article went on to talk about how often we incorrectly predict what will make us happy or unhappy. There was some advice at the end about how to tell whether a decision will really make you happy: look to other people. For example, if you think you’ll be happier if you have a child, look at the parents around you and see if they’re happier. But people overestimate their own uniqueness and so tend to undervalue this method.
Yesterday when I was trying to figure out how much money to ask the sellers for, I took into account how much I thought the repairs might cost, based on the incomplete information I had, how much I could afford to pay myself if I had to, the likelihood of the seller having a backup offer, and the condition of the house otherwise. I tried to be as rational as I could. But there were significant gaps in my information, and I also had to use an emotional calculus: of the most likely outcomes, which is going to make me most unhappy? Am I going to feel worse over losing the house to another buyer, or over having to pay $1000 or so more to get into the house than I thought? According to this article, for most bad things (or good things, for that matter) that happen to us, we adjust afterward and they don’t have a long-term effect on our happiness. So maybe I’ll be OK no matter what happens. But I’m still on pins and needles until I know how it all turns out.
