How to Avoid Home Buyer’s Remorse
NBC Nightly News reported this week that home prices are rising faster than they have since the peak of the housing bubble in 2006. Pair this with low home inventory, rising rental rates, and more first-time buyers and we have frenzy in the housing market. But, buying a home under pressure can quickly lead to the path of buyer’s remorse. For military families, this pressure can be intensified due to the need to find housing near their next duty station in a moment’s notice.
There is nothing worse than regretting one of the largest purchases you will make in your lifetime, so let’s discuss the ways to avoid this pitfall.
1, Can you afford it?
Sure you have crunched the numbers and know what the bank is willing to lend you, but is it a number you are comfortable with? Only you know your true financial health, and if the idea of what the bank is willing to lend you makes you uncomfortable, then think again before you make the offer.
2. Is it too expensive?
These may sound the same, but there is a difference between what you can afford and what you should pay for a home based on fair market value. With the low inventory, we are beginning to hear reports of buyers offering more than the asking price due to multiple offers, but getting caught up in the competition of home buying may mean that you pay money out of pocket or pay more for a home than it is worth. It is hard not to get competitive, but take a deep breath and think more about the long-term consequences of making an emotional decision about a practical issue.
3. Location, location, location
The golden rule of real estate still applies even in times of low inventory. With so few homes on the market, you may be tempted to make an offer on a home that is not in an ideal location. This may seem like your only option, particularly if you are a military family that needs to buy a home quickly, but do not fall prey to low supply and high demand. There are many things you can change about a home, but its location is not one of them. Remember, too, that if the location is not quite right for you, then it likely will not be right for others when it comes time to rent or sell your property.
4. Upgrades and repairs
It is easy to become zealous about the idea of home improvements when you are looking for a home, but truth be told, most individuals do not have construction experience nor the time to put into most projects, particularly active-duty service members! Digging in and making a place your own is wonderful, but do not purchase a home that needs extensive renovation if you do not have the time to put in the sweat equity.
Hire a home inspector to delve deep into the structure and systems of the home. The money spent up front can keep you from costly repairs down the road, because what you can’t see may hurt you. If the home inspection exposes issues beyond what is negotiable with the seller, take another deep breath and consider whether this truly is the home for you.
5. Spousal dispute
For military families, it is not uncommon to have one member of the family forward deploy to the next duty station to secure housing. This can get tricky if you are making a decision about a home without the co-buyer weighing in. Or maybe it is easier than if you are house hunting together; after all, it is unusual for spouses to see eye-to-eye on what features are most important. If you find a home that truly does not meet the needs of your significant other, then keep looking.
6. What does your future hold?
As an active-duty service member, the likelihood that you will remain in the home for more than three or four years is pretty slim. Considering your exit strategy even before you buy may sound like considering divorce on the day you get married. But, think of it more as a prenuptial agreement. When you can no longer reside in the home, are you going to sell it or convert it to a rental property? What is the cost/benefit of each of those decisions, and would they change your mind about buying a home? Important considerations, even if it takes away a bit of the romance.
Buying your first home, or any home for that matter, is an exciting process, and the news that the housing market is on the road to recovery is fantastic, but avoid falling prey to the competitive side of home buying. If the home you are considering doesn’t pass the gut check, then maybe the home or the timing is not right. The emotional let down of not coming away with a contract after setting your sights on a home is far easier to recover from than paying a monthly mortgage on a home that isn’t a perfect fit.
