The decision to buy a home is one of the biggest you’ll ever make. It’s exciting, yes, but it’s also a lot of responsibility—and a lot of money. So how do you go about making sure that your purchase isn’t something you’ll end up regretting?
Here are some tips from homeowners who have made their share of mistakes in this arena:
What is home buyer’s remorse?
Home buyer’s remorse is a feeling of regret or anxiety after purchasing a home. It can be caused by a number of factors, such as feeling overwhelmed by the process, realizing the cost of upkeep, or feeling like the purchase was not the right decision.
Buyer’s remorse is more common in an extremely competitive housing market. This was highlighted by homeowners who purchased a home during COVID. More than half of the homeowners surveyed said that they regret buying and feel buyer’s remorse.
Most homeowners have at least one regret but whether or not you’re ultimately happy with your decision is the deciding factor.
What are the most common reasons for home buyer’s remorse?
1. Not understanding the full financial impact of the purchase.
2. Not researching the neighborhood or local amenities.
3. Making a decision too quickly.
4. Not getting a professional home inspection.
5. Buying a property with hidden defects or needing too many repairs.
6. Not understanding the true cost of homeownership.
7. Not getting a home loan pre-approval.
8. Not considering the long-term costs of maintenance.
9. Not considering resale value.
10. Underestimating the amount of time and energy required to close the deal.
Ways to avoid buyer’s remorse
Here are some tips on how you can avoid home buyer’s remorse even if it’s a hot seller’s market.
Don’t get in over your head.
The first step is to make sure you can afford the house. If you use an online calculator, it’s easy to see how much your mortgage payments will be based on the price of a home and the amount of your down payment.
Once you have some idea of what your monthly payment is going to be, then it’s time to figure out if this is something that works for your budget. If the asking price is too much money, don’t sweat it—there are plenty of other homes out there!
Once you’ve figured out that buying a house is affordable for you and that owning one will help achieve your goals (like retiring early), then we’re ready for step two: finding a home that meets all your needs at an affordable price point!
Stick to Your Budget
Once you have an idea of what the price range is, the next step is to make sure that your budget can support that purchase price. This sounds easy enough, but many people underestimate how much their monthly mortgage payment will be and fail to account for property taxes, homeowner’s insurance, or maintenance costs.
If you’re not sure how much house you can afford, try using a mortgage calculator. Plug in some basic information about yourself (your income and other debts) as well as where you’d like to live and it’ll tell you whether or not buying a house might work out financially for you.
If your results indicate that buying a home is within reach financially but still seems like too big of an investment or commitment at this stage in life (or if it doesn’t fit into your long-term plans), then consider renting instead!
Understand mortgage rates
Mortgages are essentially loans that allow you to pay for your home in monthly installments, and they’re one of the biggest financial decisions you’ll ever make. If you get a low rate on your mortgage, you’ll be able to afford more house than if you had gotten a higher rate—but it’s important to know what the different types of interest rates mean before making any decisions.
The most common type of mortgage for a first-time home-buyer is a fixed-rate mortgage.
Fixed-rate: This means that the interest rate on your loan will stay the same throughout its duration, which could be anywhere from 15 years up to 30 years or even more depending on your lender. Fixed rates can be great because they give buyers peace of mind that their monthly payments won’t fluctuate based on fluctuations in the economy or other factors like inflation.
Consider maintenance costs
Maintenance costs can be one of the biggest surprises when buying a home, as they’re often not included in traditional home-buying calculators. For example, if you have a pool or hot tub, you’ll need to pay someone to keep it clean and inspected annually by state law. If you have an older roof with leaking issues, that’s another recurring cost that will likely occur more than once during the lifespan of your roofing materials—and it can add up to thousands of dollars over time.
For some homeowners, these kinds of costs are almost more than they can afford. But for others who can handle them better than expected? They may find themselves pleasantly surprised!
Don’t let your real estate agent make the decision for you
If you’re going to buy a house, don’t let your real estate agent make the decision for you.
It’s tempting to put all the power in their hands because they’re the experts and have tons of experience. But if you’ve already done your research and have a pretty good idea of what you’re looking for, there’s no reason to let someone else drive this home-buying process for you.
Instead, use your experienced real estate agent as a resource—they’re bound to have some great insights about the local market, and they can help you find exactly what it is that makes sense for YOUR needs.
Be honest about how much work you want to do.
Once you’ve decided on a project, ask yourself how much work you want to do. You can hire someone to do the work for you, learn how to do it yourself, or ask a friend or family member for help. If None of those options are feasible, try hiring a professional.
If you’re doing the project yourself, check out YouTube for instructions on how to do it. You can also read up on DIY blogs and websites, or browse through books at your local library.
Do your homework before you hire anyone.
Here’s what you need to know before you hire a contractor:
Get references and check them. Ask people in the same neighborhood who they recommend, or ask your friends if they can recommend someone.
Get a written estimate, with all costs spelled out. If a contractor offers a verbal quote only, make sure it includes everything (materials, labor, and taxes). A written estimate will also help keep everyone on the same Page during the whole process.
Research the neighborhood
Look for a neighborhood that is in your price range. So many people think real estate is a good investment and then end up stretching themselves financially, only to regret it later when they decide to sell or downsize. When you’re house-hunting, consider what you can afford on your budget—and stick with it!
Look for a neighborhood that has good schools. If your kids are school-aged or will be at some point in the future, look into the quality of the local public schools before making any offers on homes in their district. You’ll want to make sure there’s something decent right around the corner before making a decision based solely on affordability (which I’ll get back to).
Consider transportation options as well as proximity to them: does public transportation go through this area? How long does it take someone who lives here to get into work every day? If your commute takes longer than an hour each way every day (even if it’s not by car), that might be a dealbreaker itself.
Know when to shell out the extra dough. 💸
You should spend more money on things that will save you money in the long run, and vice versa. For example, if you’re considering buying a new washing machine, it’s probably worth paying more for a high-quality one that will last longer and use less water than a cheaper model. In this case, investing in an upgrade now will probably end up saving you money over time.
The same principle applies to other appliances as well: You could buy a cheap dishwasher or refrigerator today but then have to replace them every few years. Or you could put off those purchases until later so that your house is fully furnished with quality products when it’s time for you to sell it (or move out).
Research mortgage options and rates
Research mortgage options and rates before you begin your search for a new home.
Find out what questions to ask your lender or broker, and make sure you understand how each option works so you know what will fit best with your financial situation.
If you’re planning to purchase a home with a partner, then consider getting pre-approved for a mortgage as well. This will let sellers know that the two of you are serious about buying their property together, which can help move negotiations along more smoothly.
Get a home inspection
If you’re buying a home, get a home inspection. No matter if it’s a foreclosure or not, if you’re buying a house and want to know what shape it’s in before making an offer on it, have someone come out and take a look at the property. A home inspector will inspect the house from top to bottom, taking notes while they walk through each room with their clipboard in hand—they’ll see things such as cracked foundations or rotted beams that you won’t even notice when viewing the house yourself.
If you aren’t familiar with how homes work, having access to this information is invaluable as well—for example, knowing that your electrical system needs updating before trying to sell your home means being able to negotiate more money from potential buyers.
You don’t have to be original.
If you’re thinking about buying a home, it’s important to remember that you don’t have to be original.
When searching for a new home, many people get hung up on wanting something unique and special. They think they’ll feel like they’ve truly arrived if their house is unlike any other in the neighborhood—but this can lead them down a slippery slope toward homeowners’ regret and frustration when they realize there are very few homes on the market that meet their criteria.
If you’re looking for an affordable option that checks all the boxes of what you need in a place to live (or rent), then great! You don’t need anything more than that! But if not… Well then maybe it’s time for some professional advice before making any big decisions about buying real estate property.
Think with your head, not your heart
Buying a house is one of the biggest investments you’ll make in your lifetime, so it pays to do your research and weigh all of your options before you sign on the dotted line.
You may have dreamed about owning a home for years, but when it comes down to making an offer or putting in an offer, are you thinking with your head or with your heart? You need both parts working together if you want to avoid homeowners’ regret.
If a home has everything on your wish list but isn’t within reach financially, don’t be tempted by that perfect-looking house! It’s better to not own something than own something that puts stress on your budget every month.
It’s OK to buy things that aren’t perfect.
I know this is a tough pill to swallow, but it’s true: if you wait until everything is just right, you’ll never buy anything at all. Sometimes the best thing you can do for yourself (and your finances) is to take that leap and make an imperfect purchase—even though it may feel like buyer’s remorse for months afterward. Because even if something isn’t perfect out of the gate, it’s really easy in our current world of IKEA hacks and spray paint tutorials to update or improve upon pretty much anything with relative ease. That $100 sofa can become something else entirely with just a little bit of effort on your part—and how wonderful will it feel when you look back on how far it has come from its humble beginnings?
Homeowners’ regret is real but it doesn’t have to happen to you
Homeowners’ regret is real. And it’s something that can happen to anyone, whether you’re a first-time homebuyer or have owned a few properties before. But there are steps you can take to avoid it altogether.
Here are some tips for avoiding homeowners’ regret:
Be smart about your decisions. Before buying a house, do as much research as possible (including talking with other homeowners) so that you know exactly what type of property and mortgage fits your needs best. Don’t buy a home just because someone else told you it was a good idea; do the math based on your own financial situation and what kind of lifestyle living in that kind of house would allow for—and stick with those numbers when making offers on properties during the process of buying one!
Be honest with yourself about what you want from a house and whether or not those wants fit into reasonable price range(s). If not, then don’t buy! It’s better than wasting money on something that doesn’t make sense while also feeling like “the grass may be greener” over time due to unintended consequences caused by having taken out too many loans at once (or even just one)!
We’ve all heard stories about “house poor” people who can’t keep up with their mortgages or other bills. But homeowners’ regret doesn’t have to be an inevitable part of the process. By following these tips, you can avoid making any serious mistakes that could lead to financial ruin!