When it comes to real estate, is homebuyer’s remorse truly a thing? Or are feelings of potential homebuyer’s remorse simply the result of fear and anxiety that come with making such a large purchase?
According to Clever Real Estate’s latest report, buyer’s remorse is real: 80 percent of 1,000 property homeowners surveyed reported some regret. That’s significant and calls for a deeper dive into the reasons cited in Clever’s report.
The survey’s homebuyer’s remorse findings
66% of homeowners regret how their home looks
In my experience, this is really about feeling stressed by the costs and time involved in fixing up a home, not to mention a lack of patience.
When you buy a resale, you may have a seemingly endless list of improvements you want to make, plus repairs. Buyers can feel the strain of a mortgage while also being responsible for maintaining, upgrading and remodeling the property. Given today’s high homebuying costs, it’s easy for a buyer to feel overwhelmed.
58% of homeowners regret their home and homeownership in general
Buying a home is a huge financial commitment. When things need fixing, they need fixing, and that leaves less discretionary income for other expenses.
Plus, property taxes and insurance keep rising, which can raise the mortgage payment regardless of the interest rate the buyer locked in.
Utility bills can cost more, along with other expenses like lawn, gardening and pool services. Keeping the home clean and well maintained can take a lot of effort, depending on the property, and it’s an ongoing responsibility not all buyers are prepared for.
Condo or HOA dues have increased in many communities due to insurance and other assessments, an ongoing mandatory cost. It’s certainly not like renting, where you don’t have to worry about HOA fees, taxes and repairs.
45% of homeowners regret their home’s location
Buyers tend to focus on location, location, location when they are buying, and no matter how nice the home is, if the location is off, they aren’t as happy as if they had bought in an area they wanted to be in.
Realistically, the budget and available inventory dictate that decision. If the location isn’t in the desired area, buyers may face longer commutes and higher gas costs, and they might find that family and friends aren’t willing to drive to them.
38% of homeowners have regrets about their homebuying experience
It can be easy for buyers to replay things after the fact.
- Should they have bought when they did?
- Did they make the right decision?
- Did they feel rushed into it?
- Did they compromise too much?
- Were the seller and/or agents involved difficult to deal with?
These feelings can be normal after closing. The home always looks rosier the first or second time a buyer sees it than after they’ve moved in. Once they are living there, they see every imperfection.
New owners will talk to neighbors after they move in, and sometimes they hear more than they wanted to know about the prior owner of their home. That may create worry, doubt and fear.
- Did they buy a money pit and not realize it?
- What if the inspection didn’t catch everything?
And speaking of inspections, there is also the dreaded post-closing condition discovery, where sometimes buyers are left to deal with a problem they didn’t expect. Sometimes, inspections won’t detect issues that can’t be found without invasive or destructive testing.
How to prevent homebuyer’s remorse
So, what can agents do to help buyers avoid remorse when buying a home?
Agent selection and buyer consultation
A buyer needs to spend time choosing an agent to work with and then sign a buyer representation agreement with their preferred agent before engaging their services and seeing properties.
An agent needs to emphasize the importance of the buyer taking time for an in-depth consultation that gives the agent ample time to walk through the buying process end to end and the buyer ample time to ask questions. There may need to be a couple of meetings to go through everything involved, including what to expect with:
- The property search in the buyer’s price range
- The state of the market
- Offer strategy
- Contracts and forms
- Costs of inspections, appraisals, etc.
Not taking the time to do this upfront can lead to confusion about the process and mismanaged expectations because the buyer wasn’t properly educated. They may not understand the role of a buyer’s agent and why they need an advocate in their corner. This is a critical first step where an agent can manage expectations.
Due diligence
Make sure buyers get recommended inspections for the kind of property they are buying. If the home inspector recommends further evaluation by a specialist, get that person involved so buyers understand the scope and cost of the issues that need attention.
Many buyers don’t know what they don’t know, and they need an agent to advise them accordingly. Listing agents and sellers often want to compress the timeframe for inspections and investigations. Help your buyer propose a realistic timeframe with an offer so they don’t feel rushed. If an inspection reveals several things that need further investigation, coach your buyer and push for an extension if needed.
Test drive the neighborhood
Encourage buyers to visit the areas they are interested in on different days and times. Tell them not to delay until they are under contract, if possible. Explain to them what to look for — get a feel for the traffic patterns, if people are outside, do they smile and wave, etc.
Try to talk with neighbors before buying a home — they will tell the buyers more than any seller’s disclosure will. The neighborhood floods? The snowplows take forever to get to this area? There’s a house a few doors down that has big parties every weekend with tons of cars parked on the street? They’ll let them know.
Do a money check
Whether the buyer is transitioning from renting or moving up or down, have them crunch the numbers of ownership beyond the mortgage payment. Insist buyers get preapproved before making an offer and fully walk through what the total loan costs look like with their lender.
Taxes, insurance and HOA or condo dues typically increase. Advise buyers to obtain average utility bills for the peak months of a property they are considering so they understand what that looks like. Insurance has gone up in many areas of the country, and different kinds of insurance may be required, such as flood, fire, earthquake, etc. What costs will be associated with any landscaping maintenance, pool, etc.?
Help them understand what moving costs look like, as well as home improvement costs and any repairs. Prepare them for the reality that repairs often cost more than they may think. But at the same time, remind them this is an asset they own, and they are building wealth rather than paying a landlord.
Regret sets in when buyers don’t take time to fully understand what’s involved with buying a home. It’s easy to underestimate the process, as it’s become incredibly nuanced and complicated with high prices, interest rates, insurance and affordability challenges.
Buyers often have friends and family giving input on what to do and what to believe or not. Add on AI, and you can get mismanaged expectations, confusion and misinterpretation. If family is involved in helping buy the home, it can dramatically influence outcomes, with the buyer having little control over the process.
Too many buyers start looking at homes, find one they like, and work backward, which leads to chaos and a feeling of being rushed and overwhelmed.
The market has swung from one extreme to the other over the past five years, and buying costs have increased dramatically, which can create feelings of doubt, stress and regret. Buyers need an agent who serves as a true advisor and is confident in the advice they provide, so buyers feel informed and empowered without post-closing regrets.
