5 Tips on How to Avoid Home Buyer’s Remorse
You may have heard about home buyer’s remorse before. So how do you avoid it? What are the best steps to take?
That’s what we’re going to explain to you. But first, an important question must be addressed and answered to make sure the understanding is there:
Q: What is home buyer’s remorse anyways?
A: not being completely satisfied with your purchase; feeling remorseful or regretful over an aspect of your transaction, causing unhappiness and sometimes stress
For example, let’s say you just bought a home and something about your purchase didn’t turn out quite the way you wanted it.
As agents, we usually call this not being “100% satisfied” with your transaction. Many situations could cause feelings of “remorse,” such as:
> Realizing the home is a bit too much for your budget
> Your mortgage payments are higher than if you were renting
> Another listing in a more preferred area just came onto the market at a great price
> The neighbours are being too noisy on a frequent basis, and you don’t get along
> Your anxious about home maintenance and all the stuff you must buy
> You just lost your job
For starters, we really hope that you didn’t lose your source of income. That may just be the worst type of home buyer’s remorse out there, and there isn’t much you can do about it in most situations other than looking for a new job.
But thankfully there are a handful of things you CAN do in advance to avoid home buyer’s remorse. If you’re thinking about purchasing a property sometime soon, you’ll want to remember these or jot them down somewhere for later.
#1 – Get Mortgage Pre-Approval
Mortgage pre-approval is the first step to take to avoid home buyer’s remorse all together.
You can’t start looking for a property seriously or do a thorough evaluation of your finances without knowing what your mortgage will be.
For example, you may think you can afford a home in the $550,000 – $600,000 range, but then be approved for a maximum allowable mortgage amount of $490,000.
Don’t waste your time glancing at more expensive, more featured and more well-located homes you can’t afford. This is a great way to get home buyer’s remorse – looking at homes with more bells and whistles, in better locations.
Furthermore, once you get your pre-approval, then you can seriously sit down and see how much money you’ll have left over on a monthly basis for taxes, utilities, debt payments and other expenses you have.
#2 – Evaluate Your Finances
Another common cause of home buyer’s remorse is when people make simple but avoidable mistakes evaluating their finances.
They wake up one day and realize that their mortgage along with other costs of home ownership are putting them into financial distress.
Don’t let this happen to you.
Think of all the expenses you can, then think of more. Make sure to keep in mind once per annum costs and factor them into your budget, such as:
> Property tax
> School fees
> Sports fees / equipment
> Car maintenance / registration
> Home maintenance
Learn more about the Additional Costs Associated With Buying a Home, and be well-prepared when evaluating your finances.
#3 – Make a Detailed List of What You Want
Then rank them in the order of importance for you to have in your new property. Many people end up experiencing buyer’s remorse because those few “must-have” features they wanted all along are missing.
Seriously, what’s the point in purchasing a home or condo if it doesn’t have the features you want? Okay, sometimes you’ll have to make a sacrifice here and there, but at least get your top five features in and ensure you’re 100% satisfied with the home before moving forward!
An easy way to do this is to make a list of “must-have” features in a column on the left, and a “wanted features” in a column on the right. If you can check off all your must-haves, and a few of your wanted features, chances are you’re doing well and will avoid experiencing home buyer’s remorse.
NOTE: New home buyers, make sure you go over the specifications sheet thoroughly. Show homes often have upgraded features on display that cost extra, so avoid any surprises by knowing exactly what is and what isn’t included with your new home purchase.
#4 – Now Do Your Due Diligence
We bet the list you have of “wants” made above doesn’t include a new condo tower blocking the view from your newly bought home in several months down the road.
It sure doesn’t, which is why now you must do your due diligence and look into any news on potential developments in your community and area.
This may be more of an issue for downtown and inner city residences than in the suburbs, although buying a new home in a new community on the brim of the city has its own pros and cons.
For example, a new condo building near your property could block your once marvelous view of the city or nearby park. It could also cause noisy construction throughout the daytime, five days a week, for a year or longer!
Learning about a potential development to come that could cause such issues would definitely be a source of home buyer’s remorse, let alone have the potential to affect your home’s value (say, if your view was blocked).
Asking an experienced Realtor® to help you with your next purchase is probably one of the best ways you can avoid home buyer’s remorse all together.
Experienced Realtors® typically do their job full-time for a living, meaning they:
> Have access to a special set of industry tools
> Been trained to the highest licensing standards
> Are extremely focussed on service, helping guide you every step of the way
> Are more experienced than part-time real estate agents and can promptly answer all the questions you have
> Will guide you step-by-step through your transaction, meaning they will likely recommend you do steps one through four above before using their services
Hiring an experienced Realtor® is sometimes viewed as the “one-stop” cure to home buyer’s remorse as their knowledge, skillset and expertise will almost certainly help guide you towards being 100% satisfied with your transaction.
Remember that Realtors® typically get paid from commission that comes from a home seller’s property. Therefore, unless you have some special buyer’s agent contract (which many people do not have with their agents), you won’t pay for services from a Realtor®!
It’s a win-win situation, so why wouldn’t you use an experienced Realtor®, and help yourself avoid home buyer’s remorse after your transaction is complete! Also see:
Avoid Home Buyer’s Remorse
Following the steps above will surely prevent you from ever having to experience home buyer’s remorse. If you have any more questions, be sure to consult an experienced Realtor® and be well on your way to a successful transaction!