Avoiding Buyers' remorse
Tuesday Oct 11th, 2016Share
Buyer's remorse is an emotional response that many homebuyers experience during the course of a real estate transaction. The response can take various forms such as feelings of regret, fear, depression or anxiety. Many doubtful questions may arise: Did I buy the right house? What if I lose my job? What if home prices drop? Did I overpay? Is this really the neighbourhood I want to live in? Can I really afford the mortgage payments?
There are hundreds of questions that will run through your mind during the period leading up to closing: the day you actually become the new owner of the home. Most of the questions will be simple ones that are easily answered, but sometimes doubts creep in, making you uncertain if you want to proceed with the purchase. There will always be anxious moments, but does that mean you will never become a home owner and start building your own equity? Will you continue paying someone else's mortgage by way of rent?
When you decide to buy a new home, you're forced to step outside your current comfort zone and confront the unknown. Your mind may try to compensate psychologically for feelings of uncertainty by mentally undoing the event. In other words, you may try to talk yourself out of buying your dream home. Add feelings of uncertainty to the fear of making a long-term commitment, and it's easy to understand why homebuyers can suffer from bouts of anxiety.
Here are some tips that can help you battle home buyer’s remorse:
1. Prepare yourself
The best way to cope with buyer’s remorse, and minimize its destructiveness, is to make sure that you are well informed. You should find out as much as you can about the home buying process, local home prices and home mortgages. Get yourself pre-approved for a Mortgage. That way, you'll know what you can afford and what your approximate periodic outgoings will be.
When you're ready to put in an offer, go through the offer details with your Agent and understand what all the clauses mean and why they're there.
2. Choose the right agent
In order to make sure that the purchase transaction goes smoothly it is important that you work with the right agent to represent your interests. The right agent will be someone whose experience, knowledge and personality is trustworthy and will allow you to feel comfortable with the whole transaction. Try to find an agent who you feel comfortable with, and trust. The referral of friends and relatives is important in this aspect.
3. Make sure the property meets your needs
Get out that list of wants and needs you made back when you first started the home shopping process. Does the home you selected include the important features that you want? Provided that you saw a number of homes and thoroughly evaluated what each home had to offer, it’s likely that house you’re about to buy is the best choice for you. Remember, though, you may not always get all the features you're looking for, within your price range. You may have to compromise on some of them, because everything comes at a cost. Close proximity to all amenities adds value to a property. So do upgrades. So, evaluate your needs and wants (the must haves and nice to haves).
4. Is the price right?
Feeling certain about the price you are paying for a home is one of the most important factors that can reduce uncertainty and increase your comfort level. If your agent didn't prepare a comparative market analysis for you on the home you are buying, have him or her prepare one for you now.
5. Consider the resale value
As you look at houses in a particular area, think about what all of the houses have in common. Most neighbourhoods are usually built at the same time by the same construction company and will have similar floor plans and similar amenities (excluding possible owner upgrades). Before you consider buying the house with the most upgrades, consider whether or not you want to tackle a remodel. Don’t just consider the cost of the remodel, but also think about the amount of time and headache you can handle. No remodel always goes smoothly! If a house with a newer kitchen cost $20,000 more than a house with an older kitchen, and you do not have the time to renovate, it may be still worth buying the house with the new kitchen as the extra cost is built into the Mortgage, whereas doing your own renovations, to your taste, will normally be an out of pocket expense. Your Agent can explain this a little more in detail.
6. Ask questions
No one knows the home better than the seller of the property. If you can find out the seller's motivation for selling you might be able to negotiate a better deal on the house. Try to find out the last time service was performed on the roof, furnace, and airconditioning system. Ask for documentation for warranty purposes. Asking the right questions upfront can end up saving you a lot of money in the long run.
7. Get a home inspection
Save yourself a lot of time in future litigation and renovation by bringing in a licensed, professional home inspector to inspect the home before you buy. If any major problems are found, it will steer you away from a bad decision and/or it will help you negotiate a better price at the negotiating table. In case of multiple offer situations, it is sometimes necessary to do a pre-offer home inspection rather than do no inspection at all because, in such cases, it may be necessary to go in without conditions.
8. Review your finances
You may want to review your finances to confirm that you can afford to make the purchase. Your feelings of remorse are probably unfounded, so the more rational things you can do to put your decision into the proper perspective, the better.
9. Discuss your concerns with your agent
Your agent has seen plenty of cases of home buyer’s anxiety and he, or she, can help put your mind at ease.
Remorse is a common feeling during the home buying process. Following the above tips will help you make an educated decision and reduce any stress you may have.