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Avoiding Buyer's Remorse: Real Estate Edition

Ever bought something special and later realized you didn't really need it or like it after all? It might be something as small as a new pair of shoes, or as big as an over-the-top flatscreen TV. Usually, returning it is as simple as boxing it back up, locating the receipt, and taking it back to the store for a full refund. But unlike store merchandise or a car, you can't 'try before you buy' a home, which makes your decision to buy or not buy even more stressful. Not only is a home the largest investment you'll probably ever make, it's also where you'll lay your head at night, spend years of your life, and make memories. And since Boston is about to hit the buyer's bidding wars this summer selling season, caused by limited inventory and a growing number of investors, it's important to keep in mind how you can avoid a flip flop situation.

If you're caught in the hype of the hot new listing, and knowing there are other buyers zeroing in on the same property, you might feel compelled to go the extra mile to "win" the home. And then, it's quite possible that, within hours or days of getting into contract, you may start to feel buyer's remorse. Once you've had some time to cool off, you might realize the home may not be the best one for you or that there are issues you overlooked previously. You want to pull out of the contract.

So the question then becomes: can you avoid buyer's remorse? How? Just stay grounded on these reflective real estate questions throughout the home buying process, and you should sail away through a sale without a hitch:

Must 'own' this house or must 'win' this house?

Often, in a competitive situation, a buyer just wants to "win." If you're competing and forced into a multiple counter-offer situation, step back and ask yourself: Is this the home I really want or do I just want to beat out the other buyers? This is especially important because lately, there's been a lot of properties that have sold (on average) 10-12% above the original asking price making the battle of the buyers more intense than ever before. It's important to factor this in, as bidding wars tend to create a completely different set of circumstances, and the home may no longer be right for you.

Have I seen the home more than once? How much of it have I seen?

There are hundreds of buyers who, through the years, saw a place only once. There are even savvy international buyers who buy places sight unseen. This is not uncommon nor is it the norm. No matter how much you think you love the home, if you've only seen it once, you could be heading for buyer's remorse. Going back in the evening or a different time of days provides another perspective. Also, you may see things differently the second time around. Often, you miss something in your first pass that stands out the second time around.

For international buyers, consider as much photos of the property as you can, and if you have a local representative who can go in your stead, then don't hesitate to keep him or her coming back until you're fully satisfied with your "off site inspections".

It's equally important to walk through every room, if at all possible. A quick yet complete tour of the home provides a basic understanding of the floor plan, condition and size. But to really know a home, dig deep. Walk to the end of the lot and look at the back of the home. Open every closet and go in the attic, basement, and garage. Look at the neighboring houses, too, and try your car in the garage.

Have I seen a floor plan?

Seeing an architectural floor plan provides an opportunity to see the home in a different context. It's possible you'll pick up on things you might have otherwise missed. This is also essential for investors, so that you can get a grasp of the improvements - either in the immediate future or in the long run, that you could make to increase the property's value. For fixer-uppers or properties that need a little bit of work, a floor plan is not only essential but also gravely important so you're aware of what you're actually acquiring.

Seeing the schematics puts you in not only a better buying position, but also aligns your budget accordingly so you can determine what costs are entailed to improving the property. If a floor plan isn't available from the seller or agent, consult your broker so that he can look up public records that shows crucial information about the piece or real estate you're interested in.

Have I reviewed the photos after seeing the home?

Going back to the listing photos helps jog your memory. Seeing the photos, which are snapshots in time, will give you a different and hopefully positive perspective. Ask yourself questions like: was the shade closed in the photo and if so, why? Did you ever look out that window? Does the photo remind you that the bedrooms are small because there are only twin or queen-sized beds without any nightstands? These types of real estate reflections are a great way to evaluate if a home will work for you, or is worth your investment.

Have I toured the home privately?

Visiting a home with hordes of other buyers isn't the best way to see it. You may feel cramped or rushed. You might want to sit in one of the rooms in silence for a few minutes, but it's often not possible during an open house. There may be questions you or your agent would like to ask the listing agent, but don't want everyone to hear. Or you just would want the time and attention of the listing agent. If you're serious about a home, go back for a private showing. A lot more is revealed when you have time alone in the property.

Honestly, brokers welcome private showings of the properties they have on hand since it makes them confident about your interests. Take the time to chat with agents too - you'll be surprised at how much additional information you'll learn just through casual conversation. Do not be afraid to inquire as much as you'd like since in this scenario, you have the advantage - no matter if it's a seller's market or not; remember you are the buyer who is eagerly interested.

Have I read the seller's disclosures?

If you haven't seen or heard about any disclosures before making an offer, it could be a red flag. In many markets, disclosure packages are available prior to making an offer. If not, a good listing agent will reveal the major disclosure items verbally. Ask if any disclosures are available and read them thoroughly before making an offer. If you're too busy to review the disclosures, you shouldn't make an offer. Also, find out if there are inspection, termite, or other reports you haven't seen yet.

Is this home what I set out to look for in the first place?

Many times your path changes once you're in the market. You may realize that another neighborhood will give you more for your money. Or the home that's in the school district you want needs a lot of renovation, which you hadn't counted on doing. You may discover that with lower rates and being open to a new or emerging neighborhood, you could afford a single-family home and not have to settle for a condo.

When buyers are in the midst of a competitive home market, it's easy to settle on a home that "kind of" works, or to lapse into autopilot mode. You may just be ready to buy and be done with it. You don't think about things like the commute from the new neighborhood to your job, that you aren't the renovating type, or that you never signed up for lawn mowing and maintenance issues associated with a single-family home.

A good agent will bring you back to your original plan before you sign a contract. You and your agent should review all the reasons why the home isn't the right option. It's better to flesh that out in advance than to ignore the warning signs and cancel.

To help protect you from buyer's remorse, always have an inspection contingency in your purchase agreement. An inspection contingency should be reserved for something serious about the property you didn't know before making your offer. However, some agents call it the "cold feet" or "buyer's remorse" contingency. It allows you to exit the agreement should something come up.

If you think you've found the home of your dreams but have the littlest doubt, or you can't answer all of the above questions, think twice about accepting that final counter or even writing the offer to begin with. Ultimately, never sign an agreement if you aren't completely convinced this is the home for you.

Getting ready to invest? Schedule a FREE consultation with us now and get more tips and tricks on how you can find and acquire that perfect piece of property! Call (617) 505-1781 now!

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