By Rich Cosgrove, President Stark Trumbull Area REALTORS®
When you’re house hunting, the pressure of competition can move you from “Hmm, I like that, but it’s too pricey,” to “I have to have that!” You think, so what if paying for this house will put me way over budget? I can cut back somewhere else, right? But that kind of thinking can get you into trouble. Trouble that’s totally avoidable.
If you avoid overspending and explore options while house hunting, you can end up with a great home and no regrets. Whether you’re in the middle of a home bidding war or facing down a list of must-haves, don’t lose sight of your budget and the risks. That way, you can own a house without home buyer’s remorse. And you’ll have money left to enjoy things like new furniture, entertainment and fun.
Who Has Home Buyer’s Remorse and Why?
A competitive real estate market can set buyers up to purchase a home that’s either beyond their budgets –sometimes hugely beyond — or doesn’t meet their needs, according to a 2021 survey by Bankrate and YouGov. The survey found that recent home buyers, including 64% of millennials, had regrets about their home purchase. The top reason? They were unprepared for maintenance and other home ownership-related costs. On top of that, 13% percent of millennials said they think they paid a higher sales price than they should have.
One reason home buyers may be tempted to go over budget is they’ve been influenced by the beautiful homes on TV, These shows can create unrealistic expectations for the home buying process and how homes should look. In time, buyers can view features that used to be luxuries as necessities. They believe everyone has them and they should too. One solution: Work with a REALTOR as early as possible in the process and make sure your agent knows your budget.
How to Navigate House Hunting in a Competitive Market
In addition to pressure to exceed their budgets, buyers are facing hurdles like these:
- Requests to Waive Contingencies
Not only are REALTORS seeing bidding wars but also sellers wanting buyers to waive contingencies. For example, if the appraisal contingency comes in low, the buyer has choices. They can choose to try to renegotiate with the seller, bring in the difference, or cancel. When they remove that contingency and its protection and if the home doesn’t appraise at the right level, the seller is not very likely to renegotiate with them. And the buyer has waived their right to cancel. If they cancel anyway, they’re risking their deposit.
Some buyers are also waiving contingencies related to home inspections. These investigations are an opportunity to have a home inspector view the home based on disclosures and for the buyer to use findings as a bargaining tool.
Eliminating these protections can end up costing money for buyers. It’s important to talk to your REALTOR who will guide you through this process and explain the risks of removing protections and unknown variables.
- Speed Showings and Decisions
In today’s market, showings are lasting only 15 minutes. Buyers are seeing three, four, or five homes in one day. It’s hard to keep track of what you like and don’t like with each house. Take notes immediately after viewing a home. If you’re able to prepare beforehand, create a list of wants and requirements in priority order. Immediately after seeing each home, rank it based on the list.
- Focusing on the Top of Your Price Range
If you’re looking in a market where listings are achieving multiple offers and homes are going above asking price, don’t look at houses at the top of your price range. If $300,000 is your upper limit, look at houses priced at $250,000 or $275,000. Otherwise, you’re going to be outbid from the gate every time.
- The Need to Compromise
Adjust your search outward geographically, even if it means a longer commute. Buyers might also have to compromise on property types and features. In addition, they should consider doing some DIY projects instead of wanting everything to be move-in ready.
Learn from Experiences
Access to information and guidance will help buyers make an offer on a home in a competitive market. Today’s buyer has seen and written offers on many properties before they get their offer accepted. That’s common across Ohio. Each is a learning opportunity for buyers about what information they might need to be researching so they can move more quickly. When you act on advice from recent buyers and agents, you can stay well informed and get good results even in a tough market. And that’s the best way to prevent home buyer’s remorse. Remember, when you’re in the market to buy or sell a home, contact a REALTOR® member of the Stark Trumbull Area REALTORS®.
Rich Cosgrove is the President of Stark Trumbull Area REALTORS® which serves Stark, Carroll, and Trumbull counties. Visit the website www.star.realtor for a complete listing of REALTOR® and Affiliate members. If you have any questions or comments on this article, please contact Cosgrove by email at firstname.lastname@example.org.