Dealing with buyer's remorse

You finally pulled the trigger and you bought your first house. But you are plagued with buyer’s remorse. Should you be worried, or is it time to have a stiff drink and relax?

This is a real problem for many home buyers. And it’s not just limited to real estate: wondering if you did the right thing is more often seen in buying a new pair of shoes or even buying a new car.

But the ramifications of a terrible mistake are greatly magnified when purchasing a home.

Here are some questions I am most often asked:

Q: How often is buyer’s remorse a problem in home-buying?

A:  It depends on many factors.

Some buyers are very experienced at moving to their next residence.

I once worked with a couple who both worked for IBM.  They were moving from Syracuse, New York to the Atlanta area, and had been transferred once every five years for the past quarter century.

From the very beginning of the process, they knew exactly what they wanted, and exactly where they wanted to live.  Because they had been through home-buying so many times, they were emotionally prepared, and ready to make a decision. They said to me “we’ll be moving in five years anyway, so the house is not that important.”

That was almost twenty years ago and they are still in the same house!

Other buyers, especially first-time buyers, are completely unfamiliar with all the steps necessary in locating the right house, negotiating the deal, and then securing permanent financing.

In addition, young couples often have conflicting ideas about where they want to live or what type of home will suit their needs.

If the husband wants to be an urban pioneer and the spouse wants fifteen acres with a barn and a lake, it’s going to be difficult to find a home that meets all the required criteria.

Another problem has to do with the size and scope of the transaction itself:

  • Once you have bought a house and title has transferred, you can’t take it back. There is no three day right of rescission in most real estate transactions.
  • It’s a lot of money. I mean, it’s really a lot of money! And if the buyer is at all nervous about making decisions in the first place, the magnitude of the transaction can be overwhelming.
  • The current trend of “staging” a home for the selling season is a good way for a seller to put his “best foot forward.” But that step is sometimes used to mask defects or flaws in the house, and can leave the buyers with unfulfilled memories of luxurious home decor after the closing. The staging materials have moved on to the next house, and the reality of your cold, dark, empty house can be all too depressing.
  • Lastly, most of us don’t buy a house very often. In fact, some of us find the house we like and stay thirty years. The National Association of Realtors says we move, on average, once every seven years. If that is correct, even if we have purchased homes in the past, the process is likely to be radically different today.

In addition to these stressors, the fact is that most people buy real estate emotionally, then justify it logically. And when emotion enters the equation, it is often subject to second thoughts.

So why is anyone surprised at the outcome when very complex real estate purchases are approached with little advance education or research? It’s no wonder that buyers may end up wondering if they “did the right thing.”

Q: So, what can a buyer do?

A: One major factor in establishing home buying confidence is the support and experience of real estate professionals.

  • Agents today are highly trained in how to approach the process so as to minimize the amount of time spent looking at unsuitable properties. A good agent will get their client or customer pre-qualified with a reputable lender before they ever see the first house, thus removing one major hurdle to the purchase.
  • Likewise, your agent should be able to recommend a team of other professionals to assist in the buying journey. These will typically include the lender, the closing attorney, a home inspector, perhaps an appraiser and/or a contractor, and in some cases, a land surveyor.
  • Each of these individuals has skills that are critical to the home purchase path, yet each works independently of the others. A good agent will help the buyer assemble that team, and allow the buyer to serve as the captain, giving advice rather than direction.

Savvy buyers can consciously turn the potential for regret into "Buyer BE AWARE!"

Q:  So, how do we avoid buyer’s remorse?

A:  Consider a property for its functionality, not just its decor. Staging shifts the emphasis away from design flaws and on to superficial decorations like lamps or rugs. Always try to imagine the room bare of any furniture.  

Before you start looking at properties, create a checklist of activities your family expects to carry out in each area of the house throughout the year.

Comparing properties based on functionality removes some of the emotion from the process and makes the final decision feel more logical.

Think soberly about what aspect of the house can easily be changed and what can not. In most cases, it’s not possible to add closet space to an older house unless you are willing to sacrifice a bedroom.

Finally, don’t try to rush the process.

My goal has always been for a buyer to be able to say this:

“Based on all the houses I have seen in this marketplace, I believe we could be happy living here and that this price is a fair value.”

Once you are able to honestly make that statement, you are ready to make an offer on a house.