Buying a home can be a significant milestone in someone’s life, a source of great excitement and an investment that provides stability. But often, home buyers can feel a sense of regret after officially making the leap, known as home buyer’s remorse. This article will provide an overview of this phenomenon and ways to avoid it when you purchase a home.
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What is Homebuyer’s Remorse?
Homebuyer’s remorse consists of the feelings of regret, guilt, or doubt that arise after purchasing a home. In particular, a buyer may feel like they made the wrong choice buying that specific home, and it often stems from the fear of making a life-changing decision without certainty or consideration of every important factor.
What Causes Homebuyer’s Remorse?
While several factors can contribute to homebuyer’s remorse, it is quite common for pre-existing issues that the buyer already has to be the root of regret. For example, realtor and broker Alex Young says that it may be “seeded fears of making a large financial decision, purchasing a home to appease a significant other, getting caught up in the emotional pressure of competing offer situations.”
Other causes include unexpected financial burdens as a result of owning and maintaining a house, lack of research about the location, and issues with the house discovered only after purchasing it.
Examples and Takeaways
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Costs: Buyers can be unprepared for the cost of their mortgage and other fees
When someone buys a house, they may be paying more than they can afford for the mortgage, which has long-term implications. Or they may not realize and budget for all the other payments they must make.
Ideally, the mortgage should cost no more than 30% of a buyer’s take-home pay, in order for the buyer to avoid becoming house-poor and losing the house. Additionally, it is important to be aware that costs will often increase over time, including interest, property taxes, and insurance. Do research to see if you will have a fixed-rate mortgage, where only your interest goes up.
If high costs are causing buyers to regret their purchase, they can temporarily rent rooms in their home or rent the house entirely to earn extra money to help them afford payments.
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Maintenance: Buyers are unaware of how much effort it takes to maintain a home
Homeownership comes with the responsibility of maintaining the property. Many buyers overlook not only the cost but also the effort necessary for repairs and replacements, and they can miss the ease of having apartment maintenance handle issues for them.
Before buying a house, a buyer needs to recognize the new responsibility of upkeep and ask themselves if it is realistic to commit time, money, and effort to maintenance. Ensure that your inspector thoroughly examines the house’s conditions to avoid finding issues that have to be addressed after moving in. Include maintenance costs in your budget so that when issues do arise, they don’t drain your bank account.
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Location: Buyers may not realize the cons of a neighborhood until after moving in
Without doing proper research, buyers may be unaware of problems with the location of their home until they settle in. Street or neighbors’ noise may be too loud, or the house may be in an unsafe area.
To avoid having remorse about the environment, it is vital to conduct research. This can include general planning for commutes to school or work, talking to residents to gauge if you like them or how they feel about the neighborhood, and even visiting the area during different times of day to get a feel for noise levels and general atmosphere. If crime is a concern, make sure to do research online about crime statistics.
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Renovations: Buyers may purchase an old home and not realize the difficulties of renovations
If purchasing an older home with plans to renovate, buyers may be overwhelmed with how much is involved in renovating, including planning, costs, and disruption to daily lives. Or in general, if a buyer purchases a home thinking certain issues are minor and easily fixable, it may blow up into a larger crisis than they are able to handle.
Just as proper budgeting is required to purchase the home, buyers should also decide on a reasonable budget for renovations and updates. Decide how you can contribute and how much you will have to rely on professional help—talk to contractors beforehand to understand how much renovations will cost and how long they will take.
If you decide you do not want or are unable to renovate, consider opting for a newer build that will not require as many updates as an older property.
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Landscaping: Buyers may be unaware of the expectations for yard work
Unlike with apartments, buyers own the land they live on. While this often is a plus, it does mean that they are responsible for the upkeep of that land. Large yards may be difficult to maintain, but buyers must constantly look after issues such as overgrown weeds or grass, dying plants, or problematic trees.
Before buying a home, consider the size of its yard and the greenery it has, and ask yourself whether you would realistically be able to maintain it on a regular basis. Or, if you would still like a visually pleasing yard but don’t want to do the upkeep yourself, make sure to include frequent lawn service in your budget.
If you don’t want to be responsible for as much landscaping but can’t afford lawn service, opt for a property with smaller land to minimize the stress of maintenance.
General Tips
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Don’t rush. Take time to think through your decision to buy a certain property and consider all the factors outlined above.
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Conduct thorough research. Research components like location and costs for contractors or lawn service—be as prepared and knowledgeable as possible before you choose to purchase.
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Set a realistic budget. Know how much you can afford at the present moment and stick to that limit, especially considering unexpected costs that can arise after purchasing the home.
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Inspect the property. Examining the conditions of the house before purchasing will reduce the chances of surprise issues that you discover later.
Freebies
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Free Out of State Investing Training: https://www.outofstatemoney.com/
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8 Steps to Buying Out of State: https://www.outofstatemoney.com/long-distance-investing-guide
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The Remote Landlord’s Toolkit: https://www.outofstatemoney.com/remotelandlordtoolkit
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The Creative Financing Playbook: https://www.outofstatemoney.com/creativefinancingplaybook