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How to Prevent Buyer’s Remorse: Homeowners Edition

By Jackie Lam
August 12, 2019

We’ve all made a regrettable purchase. Maybe it was that pair of boots you ended up wearing only once. Or, the latest smartphone that you really didn’t need. 

While purchases like these may set you back for a bit, what if you regret buying a major-ticket item, like a house? Believe it or not, 63 percent of millennials have regrets about their current home purchase, according to a recent Bankrate survey.

Case in point: A 38-year-old, who wanted to remain anonymous, bought a townhouse with her partner in the D.C. area in 2013 for $310,000. They had hesitations about buying the 30-year-old house from the get-go and ended up spending about $10,000 on major plumbing issues and to install an HVAC system. 

Nobody mentioned the ridiculous cost of most basic maintenance and repairs. I was so focused on the down payment that I didn’t think ahead. After our first month, I was really wondering how one returns a house,” she says. 

This story is not unusual. If you suffer from buyer’s remorse, here are four things you can do: 

Assess All Your Options

If you’re wallowing in a deep bout of regret over buying a home, and feel that ditching your mortgage payment is in your best interest, think through all your options, recommends Ben Smith, CFP® and founder of Cove Financial Planning

For instance, see if you can sell your home and not suffer a huge hit. Or, consider renting it out

“The housing market is relatively strong, and interest rates are near historic lows” says Smith. 

There’s no guarantee this will continue, but that means you might not be cornered into staying in your home due to a lack of demand.” 

Of course, you’ll also want to pay close attention to potential taxes, and any closing fees or commissions, especially after recently purchasing the property, he explains. 

If you do decide to sell, think about what you’ll do with the potential extra money. For instance, will you save up for another money goal, or use that money to pay off debt? 

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Know What's In Your Control

Once you buy a home, there are a handful of things you just have to live with unless you sell the property, explains Smith. For one thing, your minimum mortgage payment is not in your control, and neither is the current or future state of the housing market. 

What is in your control? Your other expenses. 

“There might be room to cut back in your budget to create more wiggle room for a lofty mortgage payment,” says Smith.

Pro tip: If you can find ways to cut back on your spending, you can auto-save that cash and put it toward your mortgage. 

Change Your Perspective

Shifting your mindset can help ease your worries, points out Smith. If you’re able to afford your home on paper, but end up feeling uncomfortable with paying more on housing each month, know that with each mortgage payment, you’re most likely building equity in your home — and toward your future.

While the majority of your monthly payment goes toward interest in the early years (hello, amortization!) over time, you could wake up one morning to realize to have significant equity in real estate. And if you choose, you have the freedom to sell and monetize,” says Smith.

If You Opt Out, Understand the Implications

If you end up giving up your home, know the trade-offs and costs involved. 

For example, Lindsay VanSomeren and her husband bought a house in Alaska with a zero-down VA loan. But, they ended up spending more than $30,000 in repairs in the first two years of ownership in what she calls a “stinker of a house.”

They then decided to put the house on the market. When they got an interested buyer, the house was inspected and the couple discovered that they needed to deal with $35,000 worth of necessary repairs. VanSomeren and her husband weren’t in a place where they could afford the house or the repairs. 

They ended up giving the property back to the bank with a deed-in-lieu foreclosure. (This is when an owner surrenders a deed to the property to the lender in exchange for not having to pay the rest of the mortgage debt.) And while the VanSomerens do plan on buying another house one day, they want to save 20% for a mortgage. 

We’ll be renting for the time being, and happy to do it if it means we get to save more towards buying a home the right way in the future!” says VanSomeren, who is a personal finance writer and founder of Science Finance.

Doing so will also allow us to get out of the situation quicker next time if need be, since last time we didn’t have enough equity built up in the home to be able to drop the price too low and still walk out ahead.” 

Consider the Happiness Factor

Curious if buying a house is the right choice for you? Besides it making financial sense, you’ll also want to gauge whether buying a house will make you happy, points out Mike Carpenter, a loan officer and founder of Mike the Money Man

Many of my clients will ask me whether it makes sense for them to buy a house, and I ask them if the decision will bring them joy,” says Carpenter. 

At the end of the day, even if you can afford to buy a house, but it won’t add happiness to your life, then you might want to consider.” 

In other words, listen to your feelings. Would it make you happy to own the house you live in, or does the idea of owning a house bring you a sense of accomplishment or pride? On the flip side, maybe you feel dread about being locked into a 30-year financial commitment, taking on massive debt, or having to spend your hard-earned cash on maintenance and repairs? 

Purchasing a house may be the largest, most important decision of your life. If you find yourself suffering from major regret, remember: Your back isn’t up against the wall. You have options.

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