Buyer's remorse is nothing new, and it tends to be greater on bigger (more expensive) purchases.
Homes would seem to fall into that category.
Various reports suggest that home buyers that purchased a home between summer 2020 and early 2022 experience regrets beyond the historical norm (though they fail to mention what that norm has been).
What are the top 10 regrets, based on a collection of articles? Here you go:
1. Unexpected Maintenance
It appears that some buyers underestimated the amount of time, energy and money it can take to keep a house in good repair. Gutters get clogged or leak, water soaks into the basement, appliances stop working - all of these can make home ownership immediately more expensive than renting, especially if there's little or no room in the budget.
Buyers: when you're buying a home, ensure your mortgage (and taxes + insurance) payment doesn't use all your available money. Make sure there's room for surprises. Also, consider not using all available cash for your down payment; keep some in the bank for emergencies, and add to this account when possible.
Owners: If you're already in a home and stressed about the costs, look for places you can cut back on spending and shift that money to a maintenance/repair fund (i.e. is there a streaming service you can go without? Order a grande in lieu of a venti, etc)?
A house is a good investment, but can be stressful. Taking some time to work out the dollar options can reduce the emotional wear and tear you feel in the years ahead.
2. You Don't Like the Neighborhood
Maybe they glazed past in while house-hunting, or the commute is longer than they expected, or a couple neighbors turned out to be real jerks. Whatever the case, some buyers later felt like there "where" of their purchase hasn't worked out.
Buyers: If neighborhood is a central matter and you're not well-versed in the location where you're looking, swing by at different times of day. You and your Realtor can also knock on a couple doors to meet the neighbors.
3. The Mortgage Payment is Too High
Sometimes, a buyer is approved for a higher payment than they are comfortable with in the real world, and this doesn't get sussed out until the bills are due. Other times, a payment just feels okay until it's been made a few times, when it starts to feel too tight on the budget.
This likely ties into item #1 on the list, as well, where maintenance costs get coupled with mortgage payments.
Buyers: make sure your loan approval is comfortable for you and there is ample money available each month to live in line with your wants and needs.
4. The House is Too Big
Buyers often value more space. This could be to plan for the future (marriage, children, etc), enjoying the extra room after leaving a small apartment, or believing that bigger homes are a better investment.
Whatever the reason, some buyers have wished they'd bought a smaller house, which would perhaps reduce the mortgage payment, but would also require fewer purchases to furnish and less time to clean and maintain.
Buyers: More room might be good, but weigh the pros and cons. If you're buying a house that will need some work, take it one room at a time and don't feel pressured to make everything perfect overnight.
5. Facing a Loss of Savings
Much of the focus of home buying costs land on the mortgage, but it's important to recall the up-front, cash-out-of-pocket costs that go into it. Down payments, closing costs (which sellers might pay), and inspections add up and can really take a bite out of a buyer's savings account.
Buyers: explore down payment options with your Loan Officer to see if putting more down pays off enough to justify it (which it might). See if some costs can be wrapped into your loan (without bumping the payment up too high). Lastly, if possible, don't put all your savings in a purchase. The stress and risk might outweigh the advantages.
6. Better Mortgage Rates Came Along
Mortgage rates were at all-time lows throughout the Covid pandemic period. Some buyers got a great rate...only to see rates go even lower in the months to follow. This has caused some to feel regret, given that they could have had lower payments with a lower rate had they waited (even if the price of the home had gone up during that period).
Part of the issue here is that mortgage rates are in the news - and social media - so much that it's tough to avoid hearing that "you could do better today than ever," which touches on people's sense of regret.
Really, though, it's good to note if you got a good rate, a reasonable payment, and a home you can enjoy. It's just not worth the worry that there "might" be a better rate later. This line of thinking is typically a gamble, and may pay off.
You can, in many cases, refinance, but it's not always worth it, given that most refinances come with out of pocket costs (or costs that get rolled into the loan). If you consider a refi (not likely in the fall of 2022), ask yourself how long you'll have to make the lower payment to pay off the out of pocket costs to determine if it's worth it.
7. Longer Commute
For various reasons, people often move further away from work or favorite haunts than they were living before. It might be neighborhood type, amenities, or affordability that drives this decision. Some moved further from work during Covid, since work was from home, only to find that when the office re-opened, they didn't like the commute back.
This is, in some cases, nearly unavoidable and might be a lifestyle adjustment to make it a better fit. Look at carpooling, wrapping your grocery shopping or other trips into your work commute, so the drive pays more dividends, and, of course, you can talk with your employer (if relevant) about work-from-home options into the future.
8. They Aren't Happy with the Layout
This might be a function of trying to fit existing furniture and belongings into a new space, one that does't fit together the way the old one did. It's possible that the home was staged perfectly and the buyer didn't notice that they don't live (or furnish) the home the way the stager did, or the home could have been empty, which didn't draw the buyer's attention to how tough it might be to make it work for them.
Sometimes, though, this is simply a function of time. Our tastes change. Our lives change. The layout that used to work for us might not today. It may have been a good fit at the time of purchase.
This may just require flexibility or some creativity in how spaces are used or furnished. You can renovate - and change the floorplan - but remember that this is typically expensive. Also, make sure your changes aren't detrimental to the home's general desirability if resale is a concern for you. Talking to your Realtor on this one could be very helpful.
9. Feeling Like They Overpaid
The mix of excitement and anxiety some buyers felt from 2020 to early 2022, coupled with high demand and low supply, drove many buyers to compete for homes and bid prices up. For some buyers, this felt okay (or, at least, acceptable) at the time, but perhaps not later.
It's important to look back and see that you, in many cases, paid what the market called for at that time. In the long term, your investment will almost certainly pay off....as long as you stay more than just a couple years.
Also, if you bought during the pandemic, you likely have a low interest rate, which means your monthly payment is probably lower than someone who might pay less with a higher rate. There's a give and take to both scenarios.
10. Settling or Sacrificing Too Much
I am very uncomfortable with the notion of "let's find your dream home", as it can set an unrealistic expectation. Also, our tastes change with time, so what felt like the "dream" when we bought it may not feel the same way three years later.
Find a home that's a good fit for you. That's a win. Our tastes change. We change. Circumstances change. And perhaps most of all, we always want a little more, in whatever way. I know people with big budgets who have met with architects and designed their own homes from scratch. Nearly all of them, just a couple months after the home is done and they've moved in, say, "We love, but we wish we'd have....."
Our tastes, lifestyles, and desires for "more" will always keep us thinking of how our homes could be better. Recognizing and understanding this up front can keep this from becoming a regret.
The Bottom Line
Be clear and realistic when you're buying a home and work with a Realtor that seems intent on talking things through with you, rather than just looking to rush out and start looking asap without much planning or dialogue.
