How to Avoid Homebuyer's Remorse
Remorse is a common feeling after you make an offer
You never think buyer's remorse will happen to you...until it does. You loved your future home when you signed the contract to purchase it, but now you're not sure if you made the right decision. What if you acted too quickly and a better house comes on the market next week? What if you paid too much? What if something happens to your finances and you can't make your house payments?
Hundreds of questions will run through your mind as your closing day draws near and you'll actually become owner of the home. Most of the questions will be simple ones that are easily answered, but sometimes doubt creeps in and makes you uncertain if you want to proceed with the purchase.
Unless there's a true reason for concern, your state of mind might simply be a standard case of homebuyer's remorse. A home is the most expensive thing most of us ever buy and we all want to be sure we've bought the right one. Take these steps to determine if your doubts are buyer's remorse or an indication that there's a genuine problem with the home.
Find Your Wants-and-Needs List
You probably wrote up a wants-and-needs list before you started looking for a home—features you really can't live without and others that you'd really like to have if you could. Find it now and review your notes.
Does your home include the most important things on the list? What qualities made this house stand out from the others you looked at? Did you find many houses that met your needs or was this one a rarity?
Is it realistic to think you'll find a better house if you can somehow back out of the contract? What was special about the house just a few days ago and how and why has that changed? And has it really changed?
Analyzing the facts that led you to the home will help you sort out your feelings about the purchase contract. Was it truly a poor choice or would you be nervous moving forward on any house?
About Those Discussions with Family and Friends
Remorse sometimes kicks in after we start talking to others about the new house. They usually mean well, but it's not uncommon for family and friends to question your choice and what you paid, especially if it's your first home purchase and they consider themselves to be seasoned pros. But do they know the market?
It might have been years since your best friend bought a property himself and he probably isn't in touch with current prices if that's the case. He might even live in another part of the country, in an area where housing costs a fraction of what you can expect to pay at your location.
And let's face it, parents rarely think a house is "good enough" for their children. You can't compare how your parents bought a home years ago with your home today.
You Continue to Look at Houses
This is a big mistake. Stop looking at other houses when you're already under contract to buy another one unless you just want to torture yourself or you feel that the contract has a good chance of falling apart. Maybe you're not sure the appraisal will be satisfactory or you think the home inspection might uncover serious repair issues—then it's OK to keep looking.
Your Real Estate Agent Offers No Guidance
Some agents don't guide their buyers through the closing process. Questions and doubts pop up and the agents aren't around to provide answers and assure their buyers that what they're feeling is normal. Unanswered questions can put buyers into panic mode, especially when it's their first home. Panic leads to doubt—and ultimately to buyer's remorse.
Contact your agent and others involved in your closing whenever you have a question. It's her job to help you. Nothing in life is certain, and we tend to think more about uncertainties when we make important commitments. Sometimes we just need a little reassurance. That's one of many things your agent is there for during this period.
When Your Concerns Are Valid
Of course, you might be forced to cancel the contract if there really is a genuine problem and it can't be resolved. There are times when purchases should be halted immediately.
The conditions of your contract should allow you to back out without penalty under specific circumstances, such as that you can't get financing or because the house didn't appraise for a value at or above the contract sales price. The home inspection might uncover more repair issues than you're willing to take on.
You'll want to pull the plug if there are problems with the deed or title. Maybe the property boundary lines aren't as represented by the seller. A title search might uncover undisclosed easements that give someone else the right to use the property or undisclosed liens that won't be satisfied at closing. Maybe the wife of a former owner never released her rights to the property.
These and other serious problems are all issues that must be resolved before you purchase the property.
If You're Buying a Timeshare or Condo
Check state laws if you're sorry you purchased a new timeshare or a condo because many states give buyers the right to cancel a contract if they have a change of heart after signing a purchase contract with the original developer. These laws usually don't cover resale units, however.
Cancellation clauses for other purchases might be commonly used in your area as well so ask your agent about them before you sign an offer to purchase a home.
The Bottom Line
Prepare yourself ahead of time. Know that you'll probably experience these feelings at least to some extent after you make an offer. The best thing you can do is recognize that homebuyer's remorse is a common phenomenon. Understanding why it occurs can help you work through it quickly if it occurs.