It's natural to feel nervous after purchasing a home. After all, it is such a large investment and long-term commitment. But what if such a feeling persists even a month or two after you've settled down? Believe it or not, many people experience regret after following through with a purchase. In truth, this phenomenon, known as ''buyer's remorse,'' continues to rise year after year. According to research, around 70% of people who have bought a property since the pandemic started have regretted doing so. That begs the question, how can you make a purchase knowing full well that it was the right decision? Honestly, you can't. But what you can do is learn everything you need to know about buyer's remorse to minimize the chances of acquiring it.
Everything You Need to Know About Buyer’s Remorse
Buyer's remorse refers to the experience of regret following a purchase. It can present itself for various reasons and doesn't apply only to big investments like overseas property or other real estate types. Even small expenditures can trigger such a response.
To an extent, it's natural to feel guilty after shelling out a lot of cash for an extravagant item like a winter coat or a designer purse. Furthermore, having something that needs your care, like a car, can be a lot of work, and sometimes, people are just unprepared for the effort that goes into maintenance.
Buyer's remorse can feel particularly intense in the event of a real estate purchase. If only a piece of property were as easy to return as a piece of clothing, right? Regardless, should it occur, there are multiple ways to deal with this feeling. Or better yet, prevent it from happening in the first place.
Why Do Homebuyers Experience Regret?
There is more than one reason behind a home buyer's remorse. Furthermore, it is experienced by more people than you may realize. A survey conducted in May 2021 found that about 64% of millennial homebuyers and 33% of baby boomers regretted their purchase. The most common reasons observed by the survey were the overall cost of the property and the amount of time spent maintaining it, followed by dissatisfaction with the home size. Along these, an individual may regret closing the deal because:
- They are unable to make a monthly payment.
- The value of the property isn't increasing.
- The location isn't all that they thought it out to be.
- Furnishing the house is virtually impossible due to its large size.
It's common for people to rush into a purchase before fully thinking it through. Depending on the local market, the competition can be particularly fierce, which means that if one doesn't act fast, one may lose the chance of acquiring a specific property. Since many buyers have a limited window to act, they make rash decisions that may ultimately lead to regret. In the heat of the moment, everything may seem fine and dandy. However, once people settle in, it's common for reality to kick in, too.
How to Avoid Experiencing Buyer’s Remorse?
Now that we have covered everything you need to know about buyer's remorse, it's time to explain how to prevent it if you are house-hunting.
#1 Set up a Budget
When you finally stumble upon your dream house, it's easy to get carried away. Budget-wise. You can afford to pay more than you initially wanted. You just need to minimize the frequency of grocery runs, cook more at home, and you can make it work. Right? While, in theory, that sounds like a good plan, in reality, it is anything but. How long will it take until you give in and order takeout or go on a shopping spree? In full honesty, buyer's remorse is inevitable if settling into your home means putting off everything else you want from life. That is why setting up a budget and sticking to it by all means necessary is paramount!
#2 Decide What You Want
Before you go out and look at houses, you should have your priorities straight. Make a list of what you need and another of what would be icing on the cake. Be sure to include aspects like size, accessibility, and storage while doing so. The same holds for the budget and the size. Have a non-negotiable limit, and never, ever go over it!
#3 Be Aware of What You Are Buying
Inspect the house personally. That should go without saying; however, the crazy real estate market of today has seen its fair share of people who bought properties unseen. However, we advise you not to make the same mistake!
You'd be surprised by the difference between the photos online and the actual state of the property. That's why you should tour the inside to inspect what repairs are needed and get a sense of the layout. That way, you can also see what you would need to do to prepare the house before moving in and, thus, make it easier for yourself later on after you've acquired the property.
#3 Waive Some Contingencies, but Not Too Many
In a competitive market, buyers are often forced to compromise. And while compromising on certain home features isn't a big deal, you should be careful not to over-compromise, especially when contingencies are concerned. Waiving on some is considered ok, but taking precautions is a must. For instance, even though buyers would be thrilled to have you make an offer to purchase without a home inspection taking place, doing so might lead to you buying a real lemon.
#4 Work With a Realtor
A real estate agent will work with you to negotiate the best price and protect you from losing your cool under pressure. Buying a house is a major financial and emotional decision, so getting objective advice might prevent you from making a mistake you'll later regret.
Don’t Let Buyer’s Remorse Get the Best of You!
Having regrets after purchasing a home may seem catastrophic, but it isn't. If you're dealing with negative emotions, remember that there are actions you can do to alleviate them and prevent the same thing from happening again. Furthermore, after going through everything you need to know about buyer's remorse, you can use the newly-found knowledge and the failure itself as a springboard for future success!