Preventing Buyer's Remorse When Purchasing a Home
A home can be one of the largest purchases you make. But unlike other things you buy, if you experience regret, you can’t pack it up and return it to Amazon. Nor can you take it back to the store for a refund. There are few options available to you when you’re not happy with your home purchase. You’re stuck with it — until you can sell or rent it. Neither is ideal. Want to learn more about how you can avoid this unwelcome dilemma? Read on.
Hot Housing Markets
According to The Wall Street Journal, some people who rushed to buy homes during the recent “hot” housing market are now experiencing regret. When housing inventory is low and a large number of buyers are looking to purchase, the ensuing competitive market can result in long-term headaches for rushed buyers. When homes are being snatched up at a record pace, you may also feel pressured to act quickly. However, a sprint to the finish line could be something you regret. There are certain things that should never be compromised during the home-buying process. Let’s look at some of them.
Due diligence, the exercise of care to avoid harm, can help you make a home purchase you won’t regret. No matter how fast the housing market is moving, there are things you can do to prepare for such a large purchase.
Needs and Wants
Knowing the difference between what you need and what you want can help you avoid buyer’s remorse. Make a list with one column for needs and another for wants. Be honest with yourself. Only deal breakers should appear in the needs column. Then stick to your list. For the most part, only look at houses that check all your needs boxes. Anything else is a distraction and waste of your time.
In a hot market, sellers may try to demand you waive the home inspection. Don’t do it. A home inspection report is your safety net. It can identify foundation, roof, and other structural problems. Electrical, plumbing, heating, and air-conditioning issues can be caught along with insect and animal infestations. And don’t forget about water damage and mold. You don’t want to be surprised by any of these things after you’ve signed on the dotted line.
Christy Murdock Edgar with Writing Real Estate had the following experience with homebuyers who thought they’d found their dream home:
“I worked with a couple who had fallen in love with a home, only to find out after the inspection that the roof had been replaced using subpar materials and the entire support structure was rotten. It could have been a terrible — and very expensive — surprise. Fortunately, they were able to exercise their contingency and subsequently found another, very similar house with a clean bill of health.”
Bidding wars are an unwanted hazard of a hot housing market. Getting caught in one can cause you to throw caution to the wind. But adopting a win-at-all-costs mentality can lead you to exceed your budget and put a strain on your finances for years. Set a firm limit on what you will offer. If the bidding goes beyond your limit, move on to the next property.
James McGrath, co-founder of the NYC real estate brokerage, Yoreevo, offers the following insight:
“My best piece of advice is to make an offer you're comfortable both winning and losing with. You don't want to lose and feel like you should have offered more. At the same time, you don't want to win and feel like you overpaid. If you can come up with an offer that balances those two, you're in great shape.”
If you’re not careful, your home’s location can also be a source of regret. Don’t ignore any strong opinions you have about commuting time, traffic noise, HOA communities, schools, and other things related to location. You don’t want to be a buyer trapped with a 60-minute commute when you prefer a quick 20-minute drive, or a homeowner forced to adapt to heavy traffic noise when you really want a quiet neighborhood. Don’t overlook the deal breakers that relate to a home’s location. Put them on your wants-and-needs list.
Having confidence in your mortgage is also important. You want to be happy with your loan terms, interest rate, and monthly payments. Don’t leave these decisions until the last moment. Before you start making offers on homes, get a mortgage pre-approval. This gives you time to explore your options and select a loan amount and type that fit your needs and budget.
Due diligence can help you avoid making a home purchase you’ll regret and can’t quickly fix.
There is no easy solution when you regret your decision to buy a home. Luckily, with some preparation and due diligence, you can prevent buyer’s remorse. Make a needs-and-wants list and stick to it. Never pass over a home inspection — no matter what the seller demands. Don’t overlook the importance of location. And get a mortgage pre-approval instead of rushing into a loan that may not fit your budget. Doing these things can help you purchase a home that you will appreciate and enjoy for many years to come.
Preventing Buyer's Remorse When Purchasing a Home
This blog post was published by Axos Editorial Team on March 23, 2021 and last updated on March 23, 2021.