Understandably, the extent to which buyer’s remorse causes personal angst rises considerably with long-term, high ticket purchases. Since buying a new home will be among the highest priced item an individual will ever buy, and the buyer will own the home for 5 – 10 – 20 – 30 years or even more, buying a new home comes in at the top of this list.
The Washington Post recently published an article with the top five regrets home owners experienced. By reverse engineering the cause of home buyer’s remorse, you can avert purchasing the wrong home, with the wrong home loan, in the wrong location.
Avoid 5 Key Mistakes When Buying a New Home and Move In with No Regrets
1. Take time to research the home and its environment.
22 percent of home buyers surveyed said not knowing more about the home they purchased and the neighborhood led to buyer’s remorse. In a fast-moving real estate market like what we’re experiencing right now in the Seattle-Tacoma region, buyers may not feel like they have time to do the due diligence they would otherwise. But even in a fast-moving real estate market, buyers can find out more about homes and neighborhoods before buying a new home by:
- Taking time to drive through the immediate and nearby neighborhoods
- Having an independent home inspection performed as conditional to the purchase agreement
- Digging deep into the data available on real estate platforms as to the home’s sale and renovations history
- Speaking directly with the home sellers for a first-hand account of their experience in the home and the neighborhood
- Searching online for news stories about the home’s address or immediate neighborhood
- Researching the quality and strengths of local schools
- Searching for reviews and ratings of the home’s builder (if known, and especially in the case of new construction homes)
You can change almost anything about a home you buy except its location, so the research you do about the house and the neighborhood where it’s located can be the single most important thing you do to avoid purchasing the wrong home or to avoid purchasing a great home in the wrong location.
2. Take time to consider more home buying financing options.
41 percent – more than 4 out of 10 – home buyers surveyed said they weren’t aware of all the home loan mortgage options available to them. Chances are you won’t only look at just one home before buying, so why would you sign on for the first mortgage program you found?
Working with an experienced, highly rated home loan mortgage professional can put you in the driver’s seat, giving you more buying power with the right type of financing in place, and helping to save you money. For instance, our team works as the preferred lender with a regional home builder, so buyers get the maximum in builder discounts when they work with us instead of an outside lender. In addition, we have unique experience in financing new construction homes that outside lenders sometimes lack. These advantages can help to ensure your financing comes through as expected and on time, to make the home buying experience go more smoothly.
3. Explore down payment conditions.
18 percent of home buyers surveyed said they wish they had put more money down when buying a new home. Saving longer before buying or purchasing a less-expensive home that stretches your down payment farther can sometimes lead to lower interest rates. In addition, many home buyers weren’t aware that except in rare instances, if the down payment made did not equate to the home buyer having 20 percent of equity in the home, they would be paying PMI (mortgage insurance) in addition to their loan payment, taxes and home owners insurance every month.
This is another instance where working with a lending agent that is experienced in the ins and outs of home financing, and who understands how down payments and other factors can impact your overall costs can help you avoid costly mistakes that lead to home buyer regrets down the road – and potentially for months or years to come.
4. Save more.
9 percent of home buyers surveyed said they didn’t feel as financially secure after buying a home as they did before buying a new home. It’s vital that you choose to work with a lending agent who has your best interest at heart, and who views the relationship with you for the long term, not just a one-time transaction. Your lending agent should be willing to talk to you about different scenarios that put you into the most powerful position for buying and which align most closely with your individual financial goals. This is a great argument for getting pre-approved before going into the home buying process, so that you don’t find out that you bought more home than you could comfortably afford after the fact.
5. Err on the side of more square footage.
The number one regret of home buyers surveyed in the study said that not buying a bigger house was their top regret. Though you may have to make sacrifices when it comes to the size of your home in order to live in a specific neighborhood (especially when based on scarce available inventory, like we’re currently experiencing in King, Pierce and Thurston counties) weigh the needs of your household carefully, not only in terms of space needed now but how your household make up might change in the next 3-5-10 years, and how your home will need to perform to satisfy household needs and wants.
You might also like: 5 Things First Time Home Buyers Don’t Realize They Should Do