As Real Estate inventory is so low, many homes don’t stay on the market for long. So home buyers will have to move fast but moving too fast leads to mistakes and regrets. Buyers get caught up in bidding wars they can’t afford.
A new Bankrate survey in 2021 says 64% of millennials have regrets after buying a home. Many say the biggest problems they face include feeling financially unprepared for the costs of home ownership, overpaying on the sales prices and disliking their size of the home. Buyer’s regrets are even more of a factor in the pandemic, with sight-unseen offers and contingencies waived to win the bid.
Despite the frenzied market, home buyer regrets remain fairly constant. The disappointment trends today are similar to what they looked like a few years ago.
Trulia’s 2013 consumer survey revealed that 52% of people regret something about their current home or the process of choosing it (I would like to note that 42% of renter regrets that they wish they bought instead of rented, which is the biggest renter’s regret).
Let’s take a look at the most common real estate regrets revealed in these report, and what they can teach today’s home buyers about making real estate decisions they feel good about in the long run.
1. PICK A DIFFERENT-SIZE
Sometimes you don’t know whether a house suits your needs until you start living in it. The survey also found that 14% of millennials said that their house was too big, and the same percentage said that their house was too small. We always recommended that buyers kickstart their house hunts with longer-term view of family and space planning to anticipate issues like whether you will want to take in an aging parent, allow for a young adult child to come back home. Buyer should think about what they’ll need 5 or 10 years down the road. A good real estate agent should also point out problems with floor plans, parking situations while buyer fantasize about paint colors and remodeled kitchens.
2. INFORMATION ABOUT PROPERTY
It is very alarming news that they did not get enough information about their home.
Some of homeowners surveyed said they wish they had more information about their home before they decided to buy it. It is very alarming news that they did not get enough information about their home. The way to avoid this regret is to hire a Buyer’s agent who will protect your interest and guide you the process including the contract, home inspection, disclosure reports, HOA disclosures. If you decide to work with listing agent directly, he/she may not be willing to give you enough information (including pricing of property, Many first-time buyers with regrets said they paid too much), because the listing agent always has a superseding responsibility to the Seller. We also recommend buyers attend their home inspections in person if you can. For instance, your home inspector might be willing or able to show you how to operate certain systems or use your emergency gas and water shut offs if you are onsite during the inspection – things you might wish you knew later on. Also, they can often verbalize valuable insight and nuance to the property issues they find.
Some home buyers wished they had researched their new neighborhood or neighbors. One survey found more than a quarter of first time home buyers with regrets said they don’t like their neighborhood. This can be collected during the house hunt by knocking on doors, meeting the neighbors, google-searching and investigating the neighborhood online and even visiting the home and surrounding area at different times of day and days of the week/weekend. Is neighborhood going to be crowded with cars to where you can barely drive up and down the street on Friday night? You might discover a nearby highway makes too much noise at night, or morning school bus traffic that could make your commute a disaster.
4. GET SMARTER ABOUT FINANCING
Millennials were also the most likely to say that they didn’t get a good mortgage rate, or that they overpaid for property. For example, 12% of millennials said their rates were too high, and 13% said they agreed to a sale price that was more than it should have been. Although mortgage rates are near historic lows, it’s still important to shop around for the best offer. Even a few basis points difference in interest can mean a savings (or extra cost) of thousands of dollars over the life of your loan.
5. THE COST
Among all homeowners, including millennials, the most common regret is underestimating how much the maintenance expenses and other hidden costs associated with buying and owning a home are. About 16% of homeowners (and 21% of millennials) cited this as a regret. To avoid this mistake, ask the sellers about their average utility costs, gardener’s fee, pool maintenance fee (how much does it cost to heat a pool in the winter?) and property taxes, get a homeowner’s insurance quote, and budget about one percent of the home’s purchase price for annual maintenance. Then run the numbers to see if you can afford the home.
Perhaps most importantly, know that buyer’s remorse is normal. Unless you build your home from the ground up, you likely won’t have the perfect home. Also remember, even if you do truly regret your purchase, you’re not stuck with the home forever.