Homeowner Regrets (a.k.a. Buyer’s Remorse)
A recent survey of thousands of Americans found what many of us refer to as “buyer’s remorse” among homebuyers. While I’m not fond of rehearsing people’s pain, the top five homeowner regrets are instructive to those who are considering a home purchase. The latest survey shows that 51% of homeowners had regrets about their current home. That’s worth listening to.
Today, 44% of Americans have a regret about the process they went through when buying their home, a slight decrease from 46% five years go, When Trulia first conducted this survey. When buyer’s are competing for a limited inventory, as we have seen this year in Frederick and central Maryland, they need to resist some of the temptations to “settle” for something that they will regret later.
Top 5 Homeowner Regrets
If you are ready to enter the real estate market, knowing the right questions is the best way to minimize the chances of home buyer’s remorse. You will do well to ask yourself these questions before you even start your home search:
How Soon Might We Outgrow the Home?
1. Will we outgrow this home in a couple of years? In today’s real estate climate, it’s become standard advice to plan to be in your home a minimum of five to seven years. When the market is healthy, homes appreciate an average of 3% to 6% a year. You can estimate that the length of time it will take to build enough equity to be able to sell the home in a healthy market will be around five years at a minimum. If you are more conservative, you may want to consider seven to eight years as a better estimate.
Whether newlyweds, or a growing family, or a family with older children, it’s always wise to think about the “What-ifs” in life. While we don’t have a crystal ball, we can take a look at future possibilities and consider what life may throw at us.
How Likely Are We to Do the Necessary Renovations or Remodeling?
2. Do you have the budget or skills to do the maintenance, repairs or remodeling that a home might need? If you plan on selling sometime, the home will need to be current with the market standards for the neighborhood or area. Make sure that you can afford to invest in your home. Maintaining and repairing your home is the best way to get top dollar when it’s time to sell.
Many times over the years we have seen home buyers who fall in love with a home that has a major flaw. As we point out the difficulty they might find when they want to sell, they promise that they will do the work to correct the flaw. Good intentions. But far too often, the work needed to remedy the problem never happens. Life is busy, money is invested elsewhere. So, we like to say, “really, ask yourself, how likely are you to get it done?”
How Stable is Our Situation…Really?
3. Are you comfortable with the amount of your down payment? With your monthly payments? When you sell in the foreseeable future, will you have enough equity? Are you comfortable with your employment situation? Are you comfortable with the upward momentum, or lack of, that your employment situation will bear out? Although no one can know for sure, you need to feel confident in your future.
Do We Have The Complete Story?
4. Do you have all the information you need about the house? the neighborhood? Do you have information on the utility bills, the taxes and the general maintenance the home will need? Are you clear on the details of your mortgage? Have you made a budget that reflects the true expenses of owning the home?
Remember, if you are a new homeowner, there will be expenses you didn’t carry as a renter. First-time home buyers can often be surprised by important issues simply because they haven’t had the experience of home ownership.
Make sure you use an experienced buyer’s agent who will give you good advice, and keep you from the major first-time home buyer mistakes. Make sure you have everything you need to make an informed decision.
Have We Checked Out the Schools?
5. More than in the past, school districts make a big impact on home buying decisions. Although no one can guarantee that districts won’t be reconfigured as populations change and grow, checking out the school district of a home is an important step for parents.
Many studies show that school districts can impact home prices. A Redfin study from 2013 found that there is a correlation between home values and school districts:
“Using a huge database of about 407,000 home sales and nearly 11,000 elementary school districts in 57 metropolitan markets, the study concluded that, on average, buyers pay $50 more per square foot for homes in top-rated school districts compared with homes served by average-rated schools.” See the Washington Post Article.
Not all neighborhoods and communities are subject to these correlations between school districts and home values, but it is important to research. Home buyers who don’t have children living with them will also want to pay attention to this data, if the area where they are considering a home purchase is affected by school district variations. Make sure you choose a Realtor® who knows the local neighborhoods and can point you to the right resources.
Use A Qualified Buyer’s Agent
There are a lot of factors that affect home values in a community, from home construction, to local amenities, neighborhood location, to commuting availability…the list is long and varies. It is in a buyer’s favor to use a qualified buyer’s agent to help them purchase a home that will not only suit them today, but continue to be a great asset. Home buyers should never forget to think of resale while they shop.
As much as possible, make sure you get your questions answered by all real estate professionals involved in your purchase. Even though you’ll probably need to move quickly in a competitive market, don’t let anyone rush you into anything that will make you have homeowner regrets of your own. Doing your research ahead of time can save you some #facepalm moments! Make sure you can count on your real estate agent as a trusted adviser, so you will not have home buyer remorse.
Contact Chris Highland for Buyer Representation. 301-401-5119. His 25+ years of real estate experience serve as a great resource to clients as they maneuver through today’s complex real estate transaction.