Home buyer’s remorse is a common feeling of regret or anxiety that arises after purchasing a home. It can be caused by various reasons such as overpaying, disliking the location, or realizing that the house needs more maintenance than expected.
Some buyers experience remorse the morning after writing a purchase agreement, some right before they close, and some after they move in.
According to a report by Redfin, an average of 15% of home buyers cancel their purchase agreement prior to closing on the home purchase. This is extremely frustrating for sellers that will have to put their home back on the market and find a new buyer.
The survey showed that 44% of homeowners had buyer’s remorse and 63% of millennial homeowners regretted their home purchase.
The most common areas of remorse were maintenance cost higher than expected, the house was too small, bad location, bad investment, mortgage payment too high, or bought too big of a house.
Over the past few years, I have seen buyers have remorse because they settled for something they didn’t really want either because of a shortage in inventory or affordability due to high interest rates.
To avoid buyer’s remorse, try the following tips: run the numbers once more and re-evaluate your budget to see if you can really afford the house. Add in $500 per month for repairs and calculate your utility costs. Taxes and insurance usually increase every year, so don’t cut yourself short.
Once you have been pre-approved for a loan watch the interest rates and make sure you understand the impact of an interest rate hike before you submit an offer. Don’t assume you still qualify for the same loan amount without verifying with your lender.
Have a wish list of what you want in a home and see if the home can meet your expectations for at least five years.
If you experience remorse after you close on the home, don’t make a quick decision to sell.
One couple purchased a home and slept in the house one night and decided to sell.
They hadn’t sold their previous home yet, and they wanted out. This cost them $18,000 in closing costs to purchase the home, they sold the home for $20,000 less than what they paid for it and paid $15,000 in closing costs to sell it.
There were other options they could have considered, like renting out one of the homes while waiting for a better time to sell or moving in and making modifications to the house to make it more comfortable.
It is normal to feel buyer’s remorse after making such a big purchase. However, it’s important to address it and take steps to overcome it. Buying a home is a huge investment and it is important to protect your assets.
Working with an experienced real estate agent can help reduce buyer’s remorse buy understanding the possibility before it happens and evaluating your goals and the best way to achieve them.
Ask the Real Estate Agent is a weekly column by Cheryl Kempenich of Coldwell Banker Realty, who lives and offices in the Chisago Lakes Area. Submit your questions to ckempenich@cbburnet.com. All information is deemed reliable but not guaranteed. For legal assistance consult an attorney.