How to Avoid Buyer’s Remorse in the Home Buying Process: An Insider’s Look
Everything You Need to Know About Avoiding Buyer’s Regret
Recently, our Options team dove in deep to explore the dangers of buying a home, sight unseen. We talked to brokers, buyers, and everyone in between to cover the importance of seeing a property in person, and we found that “when buying a home, you want to love the neighborhood as much as the property itself; you want to verify that the roof is structurally sound and the home’s foundation will stand the test of time.”
It’s true: buyer’s remorse in the home buying process can stem from buying a home sight unseen. But that’s not the only way for buyers to experience regret when buying a home. So we dug even deeper, to discover where else things can go awry for buyers in the home buying process. And further, how you can mitigate the troubles that buyers face when purchasing a home.
Buyers Weigh In: Close Calls
Before we reached out to people in real estate and construction industries, we wanted to get a pulse from buyers. According to buyers, regret in the home buying process comes from 1) additional cost and labor, and 2) neglecting to think long-term. Here’s what our buyers said:
Amber Little recently looked at a property in the St. Johns neighborhood of Portland, and despite the home’s perfect structure and interior, she and her husband decided not to place an offer on the property. Little claims, “the home is tucked away in a residential area, but it’s off of Lombard, and there are a few vacant buildings. We were nervous about what the area might become.” The duo feared that they would experience buyer’s remorse if they jumped on a property without thinking about the location’s future. According to the couple, “We’re hoping patience and persistence pay off.”
Another Portland buyer, Rachel Heisterkamp, who closed in on a property recently, shares that there was definite potential for her to regret purchasing the property. After receiving notice that her bid on an east Portland home was accepted, Heisterkamp made sure to complete a thorough inspection before finalizing her purchase.
Heisterkamp states, “the inspection process was crucial. If I hadn’t learned about the home’s non-conforming sewer connection before closing, I would have been left with a $5,000-plus repair once the property was in my name.”
The Mortgage Process: When Financing Goes Wrong
Buyer’s remorse can result from complications in the buying process that may occur at any point, including when the financing stage isn’t completed correctly, potentially costing thousands of dollars in the long-term.
Savvy lending officers know that while clients fall in love with their Realtors for helping them find the perfect home, that just isn’t the case with mortgage brokers once payments start. Joel Morgan of Options Financial Residential Mortgage notes that “when financing is in alignment with the client’s short- and long-term goals, then a client may appreciate the bill in terms of how the financing truly helped them successfully acquire their home or investment.”
For example, a borrower who has put into a 3/1 ARM to purchase their dream home may find themselves in year number four, facing a significant increase to their monthly payment and new stress everyday over how they will be able to continue to afford their home. At this point, many buyers experience regret over purchasing the house. Similarly, someone might unknowingly use an FHA loan, and 10 years later, they find they are still paying mortgage insurance that they are then not able to cancel – another situation where a buyer might face remorse.
When shopping for a home, it’s important to remember that there are a lot of financing options out there. Morgan also says, “It is critical to understand the pros and cons of each type AND to recognize how some of them align with your goals and support you successfully moving forward, while others may potentially stall your success.”
Not every financing option is the right fit for a buyer, though there are always options for success. Morgan cautions homebuyers that it’s not a yes or no situation, but rather a yes or when! He says, “Be empowered, develop a strategy, and remember that time is a powerful tool.”
Construction Ahead: Warning Signs You’ll Pay More Than a Home’s Listing Price
Some of the greatest sources of buyer’s remorse are hidden costs and additional out-of-pocket expenses. Bradley Vaughan at Lovett Services, a construction company in Portland, confirms that Portland buyers who are unfamiliar with the city’s non-conforming property regulations often fall subject to unforeseen costs.
“We get a lot of calls from the city’s eastside residents,” Vaughan claims, noting that these calls come from “new homeowners who get a notice from the city in the mail that they have 180 days to correct their nonconforming sewer connections.”
As a lesson learned, Vaughan encourages any potential homeowners to have their properties fully inspected prior to purchasing a home. Remember, the financial responsibility for things like a sewer line change can then fall to the owner, not the homebuyer.
Peter Cratin of Peterbuilds Construction reinforces the need for expert insight. Cratin advises, “Get a competent inspector, licensed home inspector, or contractor, to go through the house top to bottom, and be able to have the issues explained to you so that you understand what needs to be addressed immediately and what can wait. Inspection reports are long and may seem daunting. Go through them carefully and figure out what repairs need to be made.”
Realtor Pulse on Avoiding Buyer’s Regret
A Realtor is one of the best resources that a buyer can have in the house hunting process. Realtors bring seasoned perspectives to new buyers, and they’re well equipped to advise buyers on when to buy and which factors to consider when choosing a home. We checked in with Realtors at Urban Nest Realty in Portland, and here’s what we learned.
According to Rachel Freed, a principal broker at Urban Nest, the Portland real estate market has slowed down just a little this year. While it’s still a seller’s market, buyers are now in the position to take their time with the house buying process. Freed warns against rushing into buying a home: “I warn my clients to come into the home buying process with clear goals; it’s important to know what you’re looking for.” Purchasing a home shouldn’t be an impulse buy – it should be a decision that’s part of a long-term plan.
Other Realtors echo Freed’s message, claiming that one of the best ways to eschew buyer’s remorse is to think about the longevity of your decision. Are you buying what you can afford now, or the home you really want to have in the future?
Key Takeaways: Best Practices for Avoiding Buyers Remorse
- Take full advantage of the inspection process. Make sure the house you’re interested in adheres to city code and doesn’t show signs of costly repair. And if it does, negotiate with the owner so you don’t have to bear the weight of unforeseen costs.
- Think long-term. As a buyer, it’s important to think with longevity in mind. You might like the house now, but will it be the right size 2, 5, 10 years down the road? The neighborhood might seem secluded, but are you in an area that’s attractive to developers? Research city master plans and future zoning plans to make an informed decision about where you buy.
- Know your resources. The team at Options is here to help! If you’re ready to buy a home, make sure to reach out to our team so we can help you avoid buyer’s remorse!