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Home buyers remorse is a serious and often scary emotion to experience. It’s no different to buyers remorse when you buy something at a retail store. The consequences for that are fairly simple. Return to the store and ask for a refund.
With real estate it’s a little more complicated. Resolutions depend on the position you are in at the time you experience your remorse. In addition to the emotional aspect of changing your mind or wishing you had not made the decision to do something, in real estate transactions there are legal implications as well. It can be costly both emotionally and financially.
When Home Buyers Remorse Strikes
This can happen at any time.
- You could start the process of looking for a house to buy. You change your mind, you are not ready.
- You’ve closed on your house and now you wish you had never bought it.
- During the process of buying your home, anytime between contract acceptance and closing.
The later is the more complex to deal with. Let’s look at all home buying emotions and the consequences of changing your mind together with resolutions.
How to Overcome Buyers Remorse
The best time of all is before it starts. Nip it in the bud! That may seem like an easy thing to say but it’s the result of many years selling homes and witnessing the process. We help by identifying issues and educating clients accordingly.
A good buyers agent will spend more that 5 minutes with luxury home buyers exploring the reasons a buyer wants to buy a home. We’ll go over the financial status, family dynamics, and possible future changes. We review your position within the market, assess current and future market conditions of real estate in the local area. We get to know the client. All this before taking a search from the browsing status to actually looking at homes.
Educating a client is what the best real estate agents and brokers do to ensure home buyers remorse is mitigated before it starts.
- Home buyers who think they are ready to buy should have open discussions with family and friends about the prospect of buying. They should also talk with financial advisors, mortgage lenders, bank managers, as well as partners and confidants about the financial cost and risk. Find out what it is going to cost to own and maintain a property and how this affects your finances. Make sure you are very comfortable with the numbers. If concerned scale back the thoughts on size and price or postpone and review in 6 months, a year or longer. Everyones circumstances are different.
- If you need a mortgage, get a pre-approval done before you start looking at homes. Be sure you can afford the payments without sacrificing your lifestyle.
- If you are expecting to pay cash, how does this affect your reserves, or plans that will need those funds later. How will your pension be affected. What happens if you invest in the real estate and the value declines?
- Buying the right home. Create a wants and needs list. Some items on a luxury home buyers wish list might not be a good investment of money. An example here in the northwest suburbs of Chicago are swimming pools. Depending on the price point of the home they may be considered more of a nuisance and in some cases simply too dangerous. Understand the relevance of something on your wish list in a property price range. At the top end of the housing market you might want a cellar for your wine and this likely will be a wise investment, even if you never use it. Your goal is to buy a property that is not going to be a ball an chain later because you purchased something you did not want or need.
- Sticking to the plan. We can all get sucked into putting dollars on the table because someone influences our decision. The same is true in real estate. So have your plan and stick to it. Drifting off is more likely to cause buyers remorse.
- Talk about your concerns, all the time. First time home buyer remorse is more common the luxury home buyers remorse. The prospect is exciting but can be daunting. Hiring the right agent can be there for emotional support and guidance. A good buyers agent will tell you of their concerns once they have discussed everything with you and even guide you to waiting or spending less money.
Educating yourself, preparation and working with an experienced buyers agent, is how to avoid home buyers remorse.
Is home buyers remorse common? Actually not very. But it does happen and in all markets too, including luxury.
What is the length of time for buyers remorse? It usually is short lived. But where you cannot resolve your remorse you’ll need to understand the consequences of backing out. Read more further down the article.
Anxiety During Home Buying
Home buyers regret may strike at anytime for any reason. Mostly it’s more about confidence in the process, or lack of. It can also be caused by the time it takes to get from contract to closing. Buying a home is exciting, no matter what the price tag is.
The new house is solving problems at the same time creating a better life for the family. The process can drain you mentally. You have a job to do at the same time, or you live in a different area. You are planning a relocation or have to sell an existing house. Your mortgage lender seems to have an insane amount of questions or requests. There are inspections to do, attorneys to talk with.
It’s a busy time, no doubt. You start to wonder if it’s all worth it. Still looking at other homes? Believe me I know this to be true. You see something you think is better and start to have second thoughts.
Preparation for the process goes a long way to making sure you pick the right property. Market conditions can accentuate this. In fast markets you may feel compelled to make offers just to get a house! Resist this temptation at all costs. Fortunately in the luxury market there’s time. While others may be looking at the same homes, the chances are you will have time to consider each property fully before making a decision.
Anxiety After Buying a House
Crazy though it might sound, we do have buyers that close their purchase, get the keys and then start to experience niggling doubts. This ultimately leads to the decision that they have done the wrong thing. The emotions after buying a house can be mixed. Excitement and worry are normal. The reasons for true regret are more difficult to pinpoint.
It might be caused by the financial numbers just seen on your closing statement! Those are some big numbers and should scare all of us!
Relocation is a very stressful time and an associated move can make things real very fast. You need to find a new home, the process can be accelerated if you have a short time span. Maybe your decision was made too fast and now you are starting to re-think things.
Over thinking or analysis can have a remorse type affect if not careful. Remember why you moved! Talk it out. Share concerns, don’t bottle it all up.
As often as not home buyer’s remorse after closing is nerves caused by a lot of factors, but not by a true regret.
Coping With Buyer’s Remorse
Home buyers remorse anxiety is just like all other anxiety emotions. You bottle it up and it grows. As it grows you dwell on it more and more. Coping with buyer’s remorse is not a good thing to keep to yourself. A problem shared is a problem halved.
Talk to someone.
Share your concerns with family, friends, partner or the agent that helped you. Get to the root of the problem and create a plan. Understand what you can and cannot do.
Home Buyers Remorse Law
There is no such thing but there is contract law. Let’s look at the time your remorse might strike and see if we can legally resolve it!
Home Buying Remorse During Search Phase.
The easiest to resolve. You haven’t done anything more than start a search, perhaps got a mortgage approval. Whatever the reason is you are getting the nervous about this idea. Stop. Go back to the start and talk more with your trusted advisors.
What scares you?
- If you rent a home it might be the idea of financial commitment beyond a year.
- Is your job stable? Maybe a move is in your future, either geographic or job.
- Are you concerned about any joint home buying partnership?
There are many reasons you might be second guessing the decision. No problem. Stop now until all the questions are answered and resolved.
Proceed or not, you have not done anything wrong. You can rest easy.
Home Buyers Regret After Closing.
Perhaps this remorse is not as bad as you think. Once you own the house you can now decide without fear of contract issues, what to do.
- You can turn right around and put your property back on the market.
- It’s not going to be easy to walk away unscathed financially.
- You’ll have selling costs to pay and your property is worth the same.
- Maybe it’s just different and you need a period of adjustment to the new area.
Whether you choose to sell right away or not, think it through. Gain the information you need before any knee jerk reaction.
Home Buyer’s Remorse Before Closing.
Let’s assume for the purposes of this explanation that you are in contract to buy a home. It could be at any stage of the process.
Note: I am not an attorney and am not giving you any legal advice.
A real estate contract is a legally binding contract and enforceable in a court of law. Your contract may be subject to several congruencies that do allow you to withdraw. These include:
- Mortgage commitments.
- Attorney review.
- Sale of existing property.
What’s not a contingency is a change of mind. Home buyers remorse is not a legal reason to be able to get out of a contract.
Legally you are committed to complete the transaction unless any of your contingencies cannot be removed. Here’s what I mean by that.
- If your mortgage company cannot approve you for the loan, your finance contingency cannot be removed.
- If you decide you don’t want the mortgage, tough luck. If approval is issued the contingency will be removed.
All the contingencies must be removed. Each state is a little different on how and which contingencies are used, so make sure you fully understand them.
If you have home buyers remorse you can choose either:
- Close your purchase
- Risk being sued
The seller of the property has rights under your home purchase contract. These again may be different by state. Here in Illinois some of those rights may have been changed under an attorney review.
You might be sued and forced to close the transaction. Is this really a risk you are willing to take. For any buyer who has seconds thoughts and really does not want to close the purchase, I would highly recommend talking to a lawyer before anything else.
Earnest money may be the only thing you’ll lose. This depends on your case, but it’s unlikely a seller will let you have that back!
Home buyers remorse is not a game. If you have any doubts before entering a real estate transaction, work out your issues first. No regrets is the best policy!
Trying to withdraw from a real estate transaction at anytime before closing is going to bring you a lot of stress.
Nervous About Closing On House
If you’ve never been through the process of buying a house you may get the jitters as it gets near to your closing date. This is perfectly normal. It’s just like a symphony finale. You’ve been working towards the end goal and with gusto it arrives.
This is not the same as buyers remorse, it’s simply nerves. If you hired the best agent in your town, I hope they’ll have explained the process and will be there to answer last minute questions, before, during and after your closing.
Your closing is a lot of signing documents. Cash closings are much easier and quicker than financed purchases.
You may also have anxiety about house repairs. Again a normal reaction. Ownership comes with this whereas tenants don’t have to worry about it. Make sure you budget for an annual allowance for repairs and maintenance.
Home Sellers Remorse
Home buyers remorse has it’s equal emotion. Home sellers remorse.
If a seller is on the market with no contract, he can simply withdraw his property for sale, no harm, no foul.
If a seller closes his sale and has sellers remorse it will be more difficult, but not illegal. I guess he could ask to buy it back, but my thoughts are the chances of success will be low. The buyers are likely ecstatic abut their new house.
If a seller has remorse during the transaction before closing, he is also subject to a legally binding contract and the same potential “see you in court” outcome.
What Happens To Homes Subject To Enforcing a Contract
A buyer or seller decides to enforce a contract that has been defaulted by the other party.What happens to the property? It’s simple. They sit. Unsold. They cannot be marketed because any lawsuit is going to create a cloud on the title and the property cannot be sold with it.
This is something sellers have to consider when deciding on whether to enforce a purchase contract.
Lawsuits take time and cost money. Taking advice from an attorney is a sellers best first step.
A Thought About Earnest Money
Some contracts limit the damages to the earnest money deposited. In the event this is the case, it seems a good idea for sellers to request a reasonable amount of earnest money. Conversely a buyer should be willing to commit in a strong way by offering a good earnest amount.
Earnest money offering is a part of negotiation. Don’t be surprised that a small number is rejected or countered with a higher request. The possibility of home buyers remorse is a reason a seller will ask for more funds.
Can Buyer and Sellers Agree On Breaking a Contract
Well yes they can. If all parties are in agreements as long as all home buyers and home sellers who are a party to the contract agreement and sign as such, the contract can be negated. The home buyers will likely want their earnest money refunded, both parties must agree to a resolution.
Both sides will likely have incurred costs. Who pays what must also be agreed.
We hope you enjoyed our article on home buyers remorse. Let us know if we can help you buy a luxury home in Barrington and the northwest suburbs of Chicago IL.