Homebuyers

Second Thoughts? How to Avoid Homebuyer’s Remorse

For most people, buying a home is the largest and most complex purchase they’ll make in their lives. The process is often highly stressful as buyers navigate the ins and outs of finding the right home, having an offer accepted, and being approved for a mortgage.

As a result, some folks experience homebuyer’s remorse. They may think their purchase was a mistake, they spent too much on their property, or there was a better option they missed out on.

One out of three first-time homebuyers said they feel some form of remorse about the home they bought, according to a survey conducted by Guardian Service.

Regrets range from homeownership being more expensive than they anticipated to the home not meeting their needs.

However, there are ways that those scouring listings, attending open houses, and making offers can make sure they’re purchasing the right homes for their personal and financial situations and stave off buyer’s remorse.

Below are five tips for making sure you’re not buying a home now that you will regret later.

Homebuyer regret No. 1: Not considering “hidden” costs

The biggest regret felt by those with homebuyer’s remorse is that they didn’t learn more about the total cost of homeownership before purchasing a property, stated a director from J.D. Power at an industry conference.

That’s why it’s important to factor in your total monthly expenses—and then add up to 6% of the sale price for maintenance and repairs. Then you can see if the home fits into your budget.

The monthly mortgage payment is often just a starting point when calculating how much your housing costs will be. Other “hidden” costs include property taxes, insurance, repairs, maintenance, and utilities, which average more than $21,400 per year, according to a survey conducted by Bankrate.

“Try to get an idea of how much utilities like gas, electricity, sewar and water are going to cost so you can factor this into your budget,” said Janel Morgan, realtor/broker associate at RE/MAX Results in St. Cloud, Minn.

Homebuyer regret No. 2: Overpaying for a home

A similar regret is that buyers paid too much for their home.

This can happen in hot markets where home there are more buyers than homes for sale and bidding wars erupt for popular properties.

The best way to avoid this mistake is to set a firm limit for how much you’ll spend on a home—and then stick to it.

In slower markets, you may be able to submit a lowball offer to lower the price of a home if it’s been listed for a while. You may also be able to negotiate with the seller to help pay for closing costs or even temporarily buying down your mortgage rate.

Homebuyer regret No. 3: The home doesn’t meet their needs

Another common regret is that the home you purchased doesn’t meet your needs.

Maybe you have a baby on the way, or your adult parents are moving in with you and the home is too small. Or maybe it’s too large to clean and maintain and you’re not using all of the rooms. The property may also not have the features you wanted.

While it’s impossible to know what the future holds, it’s often a good idea to really think about what you expect your life to look like over the next five to 10 years.

If you anticipate your family growing, you may want to purchase a home with more square footage.

Meanwhile, if you expect to send your teenage children off to college, you may prefer to buy a smaller residence or one that’s equipped for you to age in place.  

“Visit homes multiple times before making an offer because you tend to see things differently each time,” said Morgan.

You want to make sure you can see yourself living in this residence.

It may also help to talk to family and friends about the amenities that are must-haves and those that are only nice-to-haves or not as important as you initially thought.

Homebuyer regret No. 4: They don’t love the location

The neighborhood may not be family-friendly without nearby parks or other couples with kids. Or on the flip side, is too loud and rambunctious for an empty-nest couple seeking peace and tranquility.

Think about what’s important to you. Is it being in a walkable community, having a short commute to work, or being close to restaurants and entertainment? Then it may be worth buying a condo or townhome to be closer to what you value than purchasing a larger, single-family home further away.

“Drive around the neighborhood at different times of the day or night to get a better feel for the area,” said Morgan.

If you have children, be sure to research the schools they’ll be attending.

“Search online or better yet, call the school district directly and ask them specific questions,” said Morgan. “I also recommend doing online research about crime rates in the area or calling the local police department to ask about safety.”

Homebuyer regret No. 5: You bought under pressure

Feeling like you bought a home under pressure is yet another common regret felt by some homebuyers. This can happen when buyers get caught up in the emotions of landing their “perfect” home in highly competitive markets where sellers are receiving multiple offers for their homes.

So, you get swept up in the excitement and wind up having an offer accepted on a home you’re not really crazy about.

The best way to avoid this mistake is to balance emotions with logic when deciding whether to make an offer on a home.

Make sure to ask yourself if you can really afford the home, if you’re not overpaying for it, if it meets your needs, and if it’s in a community where you want to live.

“This will help ensure that you buy the home you truly want at a price you can afford,” said Morgan.