A home is almost always the most significant purchase someone makes, so the thought of making a wrong decision stirs up immense anxiety for many buyers or would-be buyers.
Buyer’s remorse is that feeling that takes hold when you regret a purchase. When it’s something small, like maybe a gadget you didn’t need as badly as you initially felt like you did, that’s one thing. It’s an entirely different situation when it’s something like a house.
In the real estate industry, buyer’s remorse is when a new homeowner starts to feel they made the wrong decision. They might feel anxious and regretful about a life-altering decision that maybe wasn’t the best for them.
Regrets Stemming from Pandemic Purchases
A study by Clever Real Estate from last August found that 72% of recent homebuyers had regrets about their purchase.
Much of that stemmed from the fact that people were frantic when buying homes over the past few years. Many homes were going for well above asking in bidding wars, but in the aftermath, as the market cooled, plenty of buyers felt they’d made the wrong decision.
So why these feelings?
According to the survey, the number one reason for homebuyers’ remorse was spending too much money, with 30% of respondents citing it as a regret.
The second most common problem leading to remorse was buyers who said they’d jumped in too fast. Thirty percent said the decision to purchase was rushed, and 26% said they’d bought a home too quickly.
This data was based on buyers from 2021 and 2022 and was conducted in July 2022.
The seller’s market since the pandemic was blazing hot, with so many buyers trying to go above and beyond to secure a house. Thirty-one percent of buyers said they’d gone over the asking price. The median paid over the listing price was $65,000 at the time of the survey.
Eighty percent of buyers said they’d made multiple offers, and 41% said they’d made five or more offers.
The market has cooled significantly since that study was done, so buyers will likely have more leverage going forward than in 2021 and 2022, but inventory is still tight.
Other Reasons for Regret
Along with the specific reasons that people had remorse related to the pandemic and the housing market for the past few years, there are more general reasons people often say they have regrets about their decision. One is buying a home that needs too much maintenance and maybe not realizing what they are getting into.
Another is buying a home that’s too small.
The third most common reason for buyer’s remorse in real estate is buying in a location that’s not ideal. It isn’t easy to get a natural feel for the area the home is in until you live there.
Avoiding Buyer’s Remorse
So how can buyers avoid remorse when making such a big decision?
Real estate experts say one way is to require an inspection. In the pandemic peak of real estate, nearly half of the homebuyers made concessions, including waiving an inspection because the competition was so intense.
It’s not a good idea to do this, though, because an inspection will provide you with crucial information about the true condition of a home. You’re much more likely to hit an expensive surprise after closing if you don’t insist on an inspection.
Having a great real estate agent is another way buyers can avoid remorse. An excellent real estate agent will help guide the purchasing decision, weighing the pros and cons of everything.
A real estate professional should understand the local market deeply, be responsive, and should be willing to be honest with you, even when you might not like what they have to say.
Finally, another way to avoid the regret of buying a house is to get to know the neighborhood. You can make a house more suited to your needs if you don’t like something structurally or design-wise, but you can’t change the location. Too many buyers overlook this reality.
Spend time in the community exploring the amenities, walking around, and going at different times of day and evening. Think about logistics, like how long your commute is or what the schools are like. Don’t buy a house without fully delving into the location and researching.