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Four Do's and Don'ts to Avoid Buyer's Remorse

Written by on Thursday, 16 January 2014 11:37 am
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It’s a hot June night in 1996. I’d just endured a very long day of walk through, closing on, cleaning and moving possessions into our second home yet couldn't sleep. After an hour of staring at my new bedroom ceiling, I glanced over at The Queen, who was out cold. Turning back to the now very familiar ceiling, I wondered “What have I done???”  

Two people, same experience, in the same place. What differentiates the characters? Perspective. The Queen saw what our century plus old farm house on the pond could be. Yours truly saw decades of blood, sweat and tears. Eighteen years and four kids later, it turns out we were both right and both still enjoy our home knowing we made the right decision. 

Buyer’s remorse on a major purchase such as a home is a natural, normal thing. After a decade in the business, here’s some of what I've learned about what a buyer should and shouldn't do to avoid it.

 

Do-

Establish Wants vs. Needs

Come to an agreement with yourself and/or significant other on what you actually need in a home and list your wants as well, but make a clear distinction between the two. If you can find a home that meets almost all your needs, then it warrants strong consideration. If the home satisfies some wants also, then that’s icing on the cake. While this sounds elementary, you’d be surprised to hear how many buyers I work with who haven’t done this.

Be Sure it Has a Good Location

”Location, location, location” is still true in real estate today. Buying a wonderful home in a poor location will likely lead to more than one sleepless night. Your home should be the hub of your life. From work to hobbies, to shopping to the right schools for your family and the distance between all, it’s vital that your home be something worth coming home to and the location is more important than the structure itself. A commute that’s too long can become a grind and an expensive one at that, both in time and gas.

Take a Second Look

It’s common to get excited about a place during and after the initial showing. A second visit gives a buyer an opportunity to check out a home with a critical eye and a more level head. (Bring the wants vs. needs list with you) As a real estate professional, I’ll pick up on a lot more of the negative aspects of a home that went unnoticed during the first showing. This will often be the case for a prospective buyer as well.

Sleep On It

If you've found what appears to be the right home and are ready to jump in with both feet, it’s wise to step away at least overnight before making a decision. “But, my agent said another offer just came in on the house.” In many markets, multiple offers on desirable homes in good locations are common. It’s very rare for me to have a client “lose” a home because they wanted 24 hours to think it through before making a decision. A phone call to the seller’s agent reiterating my client’s interest level is usually all it takes to convince the seller to hold off signing the offer they have in hand until ours is submitted.

 

Don’t-

Use the Wrong Agent

Warning! Hiring the wrong agent can lead to therapy or ulcers. While that’s probably a stretch, it can lead to major and unnecessary stress and cost you a pile of dough. So, what makes the right agent? First and foremost, it’s an agent that will represent you and look out for your best interests at all times. He or she will also be willing to put that in writing. 

  • Do they look you in the eye and have a firm handshake? 
  • Do they actively listen to establish your needs in a home?
  • Are they genuinely interested in helping you get what you want and not just looking for their next commission check?
  • In short, are they someone who you connect with that is real and trustworthy?

You’ll be spending a lot of time with your agent and be making a hugely important decision based on their input. If the answer is “no” to any of these questions, keep looking for that agent that “get’s it.”

Feel the Need to Beat the “Other Guy”

As mentioned before, multiple offers are common in some markets. When faced with this situation, don’t lose focus and jump into a game of brinkmanship just so you can say “I won!” This can lead to regret from paying too much once the papers are signed and the keys handed over. Your buyer’s agent should give you solid data to determine the market value of the property and you shouldn't offer any higher. He or she will also highlight the strengths of your offer to put it in the most positive light to the seller. If the other offer wins out over yours, accept it as something that wasn't meant to be and move on. I've had several clients that “lost” a home only to find one more suitable a short time later.

Ask Family or Friends What They Think

Early in my real estate career, I remember well a client who had a home under contract. Inspections had been done, repairs made and the loan was approved. Both he and his wife were excited to become homeowners. The day of closing had finally arrived and the buyer’s mother came in from out of state to attend the walk through and settlement. Comments such as “What’s that smell?”, “I REALLY don’t like this about it” and “How much are paying for this?” were clear signals that this wasn't going to be the joyous occasion everyone was anticipating. Mom proceeded to wear him out on the ride over to the title company office. Once there, he threw his hands up and announced “I can’t do it!” They ended up losing their apartment with it's expiring lease, deposit, inspection fees and a considerable chunk of time. The home later sold for more money. He also could have ended up being sued by my broker and other parties, but that’s not a game we play.

What can you learn from this? Family and friends can mean well, but be uninformed. They haven’t seen the homes you've seen. They haven’t done the “home work” you've done. If they’re from another area, they won’t know your market or your buyer’s agent. Sure, exceptions can be made for local friends and family with experience in these things, but you would've likely talked to them first before starting the process, right?

Look at Other Homes Once Under Contract

You would be a fool (and possibly suicidal) to stay in the dating scene once the engagement ring has been accepted. The same goes for a home once you have a contract with a seller. Don't be "that guy."(or girl) Focus on what’s ahead in the process to make the transaction a smooth one. If you've followed the first seven steps, you’ll be confident in your decisions instead of falling into the trap of the green grass on the other side of the fence. 

Comments, questions and feedback are welcomed below or on the Salisbury MD Real Estate blog.

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