Buyer's remorse

Don't Let "Buyer's Remorse"
Sink Your Transaction

Provided by Jay Burnham, VP
Coldwell Banker Residential Brokerage

It can hit the buyer of a home at any time during a real estate transaction. Are we paying too much? Is the house in poor shape? Did we get the right mortgage? Are we sure we're doing the right thing?

It's known as Buyer's Remorse, and while it can happen to anyone, it's particularly common among first-time buyers of property. Home buying is a new experience to them. They begin to listen to, and are sometimes influenced by, friends and, particularly, parents who may not have bought a home in decades. Remembering the low price they paid twenty or thirty years ago can cause parents to go into sticker shock at what their sons and daughters are about to pay and this can make their kids nervous as well. Soon, doubts build, followed by remorse and, occasionally, a desire to escape from the transaction.

But remorse can be overcome. Facts can defeat the fears. Here are some common doubts that lead to remorse and tips for avoiding or overcoming them:

AM I PAYING TOO MUCH?
Look a fair number of homes for comparison. This will help you determine what can be obtained for how much. It will help you become more comfortable with what you are paying for the home. As added insurance, ask your broker for comps - a list of homes that have recently sold in the area. While you may only be able to view them from the outside, you can compare them with the home you are considering. Consider making your offer contingent upon the home being appraised, when you apply for financing, for at least the purchase price.
AM I BUYING THE MONEY PIT?
Have the home professionally inspected, and be there during the inspection. This will help you learn about the home and its condition firsthand. Ask the inspector how much any discovered defects would cost to repair.
WILL I BE ABLE TO RESELL THE HOUSE?
Look at the neighborhood. If you see homes being fixed up and kept in good shape, you know you are in an area where values are likely to hold. Likewise, avoid buying the most expensive home on the block. It's better to buy a less expensive home that may need a little work but is in a good location. Not only will you get a better bargain, but the home will be easier to sell than the most expensive one on the block, even in a down market.
CAN I AFFORD THE MORTGAGE?
Look around for the best rate and terms for your mortgage. Once you've found out how much you can borrow, figure your own "comfort zone". The lender is looking at your income and expenses in order to approve a monthly maximum payment, but only you can decide how near that maximum you'll be comfortable spending each month.
IF I WAIT, I MIGHT GET A BETTER DEAL.
Most home in an area have a price range they sell for. There are likely to be some people who will buy for less than you will. But what is the condition of the house? Is the seller desparate? Waiting for the ultimate deal can drive you crazy and make you an observer rather than a participant. You could end up continually looking and missing opportunities to own.

IN CONCLUSION: If you are feeling the effects of Buyer's Remorse, schedule a time to meet with your broker to go over the issues above, or any others you may have. (Ask if he or she has a prescription for "Buyer's Remorse pills"!)

JAY BURNHAM, VP
Coldwell Banker Residential Brokerage
PREVIEWS International® Property Specialist
54 Dodge Street
Beverly, MA 01915
978.233.2828

Designations Earned: CRB, CRS, GRI, RECS, SRES