As realtors in one of the most competitive real estate markets in the country, we're hearing these words more than ever before: buyer's remorse.
Our clients are expressing regret for their home purchases or property investments more than we heard before the pandemic.
And, believe it not, this isn't just happening in our area - a recent study by Zillow found that "75% of Americans who bought a home since the pandemic have buyer's remorse" (source).
So, today we are going to share some of the reasons why we keep hearing that our clients regret their purchases, as well as some tips on how you can avoid experiencing buyer's remorse.
Reasons for Buyer's Remorse:
No doubt about it, the world events of the last couple of years have impacted all of us and our lives deeply. For many people, working from home suddenly became the norm. This changed the landscape of how many companies operate, but also, how many people saw their daily lives.
Now, there was less of a reason to stay in expensive, high rise, inner city apartments, when they could have that big house a couple hours away. After all, if there's no commute to worry about - and you can take your high salary with you - why not live somewhere else?
So, this led to a flood of families seeking homes in quieter, more family friendly, affordable areas. But, this does not always work out as planned.
74% of respondents wish they had done at least one thing differently during the shopping process.
Could this be that people jumped the gun on picking a house, maybe even in an area they weren't totally familiar with, only to regret it?
Might be the case, since 28% of buyer's said they would have purchased a home in a different area.
Not only that, but the intensity of the market, and the quickness in which properties have been selling, have left many people feeling like they didn't have time to truly consider their choices and later regretted it.
81% of buyers said they had to make at least one compromise in order to afford their home and and 38% wishing they had spent more time searching for a home or weighing their options.
We see it all the time: our clients come in with their list of must-haves and as their offers get rejected, that list starts to shrink.
With the real estate market changes in the last couple of years, we've seen a lot of people jump into a home in a different area only to have their company call them and say, "Hey, everybody needs to come back to the office now."
So, how can you make a decision that won't leave you with the heaviness of buyer's remorse? Here's our best advice:
1. Have a No Compromise List:
There are the lucky few that can truly afford everything on their dream home list, but for many of us, compromises are going to have to be made somewhere.
Only you know the items on your list that you could happily live without (or just update later) versus the items that would truly impact your quality of life.
While you need a list of all the things you are hoping for, you also need a "no compromise" list - or the things you will not compromise on.
Here's an example: we recently worked with a client who has 4 kids and was living in a nice apartment. Their dream home list looked like this:
Attached garage with storage
3 bathrooms
4 bedrooms
Larger kitchen with more storage
Inside laundry (not garage)
A backyard (preferably low maintenance)
Almost or move-in ready
Quiet neighborhood
Great schools
Open living area with lots of room
Low maintenance finishes
Now, as they started to make offer after offer that didn't get picked, this list started to dwindle and dwindle - until they made an offer on a house that needed a ton of work, a kitchen that was almost unusable, with 3 bedrooms, laundry hookups in the garage and - the kicker - only one bathroom.
Some of those things could be fine, such as laundry in the garage and 3 bedrooms. However, one bathroom for 5 people would have significantly impacted their quality of life, especially in the mornings.
Luckily, their offer wasn't picked and they eventually bought a townhome that was a much better fit for them, but had their bid been accepted, they would probably be living with a lot of buyer's remorse right now.
This is why it's important to make your dream list - but then also identify your absolute no compromise list and share it with your realtor. Let them remind you when you're starting to panic and make offers on properties that will not be a good fit long term.
For tips on how to find a great realtor that you can trust, read this post.
2. Get Quotes on Fixer Uppers:
This is a big one, folks. If you're considering homes that need work, you need to find a good contractor that will walk potential homes with you and give you a ballpark estimate of what the costs could be to make it what you need.
Ideally, you have a good friend or someone who can do this for you, but if not, ask your realtor if they can give you some idea of what you're looking at in terms of expenses.
Here's why: materials and labor are costing more than ever due to supply shortages and demand for work.
We recently experienced this ourselves. We got quotes for an inground pool 4 years ago that were all around $40,000. Now, that same pool (maybe even a little smaller) is being quoted at $80-$100,000. That's a huge shift!
You're going to see this skyrocketing price tag in all areas of home repair and renovation, too. So, if you're considering a fixer upper, you need eyes wide open on what those costs are going to be and how long it's really going to take. Otherwise, you could buy that home with potential and have it end up being a money pit that leaves you with buyer's remorse.
3. Location, Location, Location:
What's the thing you can never change about your home, no matter how much money you have? Location. You cannot change the location of your home.
This means you are better off getting a less-than-perfect house in the perfect location for you and your family than the perfect home in the wrong area.
Be brutally honest with yourself about where you need to live, including access to the right schools, etc., and only make offers on properties in those areas.
Now, within the right area, there could be some streets or neighborhoods that are not as high up on your list as others and that's okay. Canvassing the widest area that you can is going to give you more options. Sometimes, a house or a street you didn't consider before will surprise you. We've seen this happen over and over again. But, don't even look at homes in areas that are not the right location or you could be living with your new roommate: buyer's remorse.
4. Stick To Your Budget:
This is such a hard one in a market like we have here in California. We've seen home values double in just a few years, taking quiet little suburbs that were once affordable into million dollar neighborhoods.
If you're shopping for a home in a competitive, expensive real estate market, it can seem impossible to stick to your budget, but here's the thing: don't sell your soul for stucco.
That mortgage that will squeeze every little ounce of fun out of your budget will not seem worth it forever. You will eventually regret putting all your money into your home and having nothing left to live your life with.
Buy a home with the budget you have today, not the one you hope to have in 5 years. If your income does significantly change down the road, you can always sell and use the equity you've built up to buy something bigger.
5. Take Your Time:
The feeding frenzy is real, folks. We see it catch even the most level-headed buyers at times. You see properties popping on and off the market like a video game, you see your offers getting rejected or outbid left and right. You start to panic, considering homes and areas you wouldn't have considered before and making offers you normally wouldn't have agreed to.
It happens all the time. This is why the market shoots up when supply is low. This is also why we always tell our clients to take their time.
When one house in a neighborhood goes up for sale, there is usually a second one to follow, and a third, and maybe more. Mark the areas, streets, complexes and houses that you love and wait for another one to come on the market.
We just experienced this with one of our own team members at Enyart Homes. She fell in love with a townhome that checked all the boxes. Unfortunately, her offer wasn't picked. But, literally weeks later, another unit went up for sale in the same complex, but this one with a better backyard and slightly layout modifications that made it an even better fit. She made the winning offer and is now closing on her home.
Had she rushed and made an offer on another property she walked that had less space and needed more work, she would likely be experiencing buyer's remorse. But, she knew to be patient and take her time and now she's very excited.
Oh, and if you need even more encouragement to take your time and be patient, she's been searching for a home for at least a year and has made a dozen offers that were rejected. So, ride the waves of the market, stay focused on your no-compromise list and take your time.
***** We hope these tips help you avoid buyer's remorse. If you have already bought something that has left you feeling regret, we'll be back soon with tips on what you can do to turn that feeling around.
If you're looking for a realtor in the Sacramento area, including Granite Bay, Folsom, El Dorado Hills and more, give us a call at: 916.524.9733.
Russell Enyart and the Enyart Real Estate Group are top real estate agents serving serving West Sacramento, Folsom, El Dorado Hills, Granite Bay, Loomis, Rocklin, Roseville, and Sacramento County, Placer County, and El Dorado County.
*All stats in this article were found in this post:
Buyer’s Remorse: Why 75% of Recent Homebuyers Are Expressing Regrets (source)