As the parent of a newly-minted adult, I can reflect on how much of my advice thus far has been delivered in the negative. "Son," I’ve said, time and time again, "I’ve been there and I’ve done that and here’s what NOT to do."
I suspect this might be a theme of any great advice in any realm of life: it’s critical to know from those who have gone before what you should do, and just as critical — sometimes more so — to know what not to do. In the interest of ensuring that the advice I gave last week on how to be a happy homeowner is comprehensive, then, it behooves me to share some insights on how to be an unhappy one — in the hopes it will help you avoid this fate.
1. Move a lot. Moving house is stressful, in and of itself. Mention the prospect of moving to any cocktail party crowd, and you’ll undoubtedly hear a chorus of moans and groans of "I hate to move!" Studies actually rank moving right up there with getting a divorce or being widowed in terms of stressfulness — no joke! And that’s just the moving part — there’s also the stress multiplier of selling your home, which includes such unhappy-making activities as:
- Deciding when to sell.
- Studying market data on recent sales in your area.
- Interviewing listing agents.
- Giving your home the deepest clean ever.
- Opening your home to strangers.
- Waiting for, fielding and responding to offers.
- Holding your breath, anxiously awaiting the appraisal and closing.
Homeowners who move a lot not only have to deal with the inherent stresses of moving, but also with each of these other attendant stresses of selling.
2. Make mortgage moves a lot. In a landmark study by Thomas Holmes and Richard Rahe ranking various life events in terms of their relative stress, taking out a mortgage was given a score of 30. And here’s some context, having your home foreclosed was given a score of 31! For smart homeowners, taking out a mortgage can be a tense series of decisions that they don’t always feel well-equipped to make, from selecting a mortgage broker to selecting a loan type and term to trying to ascertain whether they’re getting the best deal on rates and fees. And there are also the uncertainties involved — the feeling that an appraiser and an underwriter who you’ll never meet are in control of your financial fate doesn’t feel good.
Beyond that, it’s highly worrisome to have to scurry around and meet seemingly nonsensical documentation requirements or show up to sign stacks of papers at weird times in weird places at the whim of the mortgage lender, which you must do on the principle my Dad leveraged so frequently during my childhood: "he/she who holds the cash makes the rules." And the biggest stresses around frequent mortgage moves come when they are being made because the current mortgage obligations are simply too burdensome or overwhelming, which just puts an even greater level of pressure on the unhappy homeowner to close the loan — something that is not 100 percent within their control.
3. Try to time the market. Those who try to time the market, whether trying to lock in an interest rate at the precise bottom or trying to sell at the tippy-top of the market, rarely do. By the time you can register that a bottom is in the wind, it has usually passed — and if you’ve been a homeowner in an ascending market, you know that the temptation is to hold in order to collect every penny of appreciation, not to get out while things are hot.
Those who are very emotionally invested in their timing games set themselves up not just to fail, but also to experience great distress. This is about fixating on things beyond your control — at some point, with home ownership, as with investing in other asset classes, you have to make a decision and commit to feeling good about that decision. Fretting that rates went down after you locked yours or that you could have made an extra ten grand if you had held onto your place another few months is a sure-fire way to stress yourself into a premature spot on the Botox power user list.
4. View your home as a short-term investment. In light of recent market madness, this seems silly, but the reality is that a large number of homeowners who lost homes in the last wave of foreclosures were people who had bought homes planning to be in them a few years or less — and who were counting on them to rise in value in the interim.
Not only does viewing your home as a short-term investment (vs. a long-term residence) make you more likely to take on mortgage obligations that are unsustainable in the long-term, it also positions you to select a home that is more of a Band-Aid for your living needs than a real solution. And that renders you less likely to pick a place that will be functional for your life over the long run if the market does decline and you need to stay put. I personally know at least three young men who lost urban lofts they had counted on to appreciate through short sales or foreclosure when they found themselves married with children at the bottom of the market.