19
Mar
13

6 Legitimate Reasons to Think Twice Before You Buy That House

think twiceBuyer’s remorse is no joke. It has killed many a home buying deal. But buying a home is serious, life-changing business, so some level of deliberation, concern and even rethinking the whole thing, before signing on the dotted line, is actually sensible and smart.

So it can be tough to know the difference between (a) the normal, unwarranted buyer’s remorse every home buyer should expect, think through and move past, and (b) the mental alarm bells that should be heeded because there is truly good reason to revisit whether this purchase is the right thing to do.

Home buyers, we’re here to help. If you’re suffering from a case of buyer’s remorse at any stage before your contingencies are removed, list out the things that come to mind when you fantasize about backing out of the deal.  If your list contains any of the following items, express your concerns to your spouse or co-buyer and your agent. Then, consult with your mind and your heart about whether you’re ready to move forward – or not.

    1.    It’s too expensive.  If you’re buying a house in 2013, it’s completely understandable to have a moment of panic at the sound of the price you’re paying or the sight of all those zeros. It’s a big purchase you’re making, possibly the biggest one you ever will, and those who enter into it with not even the slightest twinge of being nervous might not be taking it as seriously as they should.

That said, fears that a home are too expensive vis-a-vis the other recently sold homes in the neighborhood or the town’s market and future appreciation prospects in general are worth exploring and evaluating before you decide on your offer price or sign a final counter-offer. Your agent can help you understand the complex interacting factors you should consider, including the likelihood of the home to appraise at a given price point and the historical data on sales and home value trends in your area.

    2.    It’s too expensive for you.  For years, I’ve heard buyers express concerns about being ‘house poor,’ meaning that they spend so much on their monthly mortgage payments that they are too broke to do much else. Unless you’re fortunate enough to live in one of those parts of the country in which it is less expensive to own than to rent a home, it’s almost inevitable that there will be some sort of lifestyle revision you’ll need to make post-homeownership.

Most people who have been renting for a long time will find themselves having to make some sacrifices after they buy, in terms of eating out less, going out less, splurging on vacations, clothes and other discretionary spending – this is just par for the course, sensible, and not a good reason not to buy.

On the other hand, there are occasions in which buyers are approved for mortgages beyond what they can truly afford and maintain financial integrity, in terms of still having enough money left over post-mortgage payment for saving, investing and other monthly budget line items that the mortgage banks don’t consider (e.g., children’s school tuition, medical expenses, etc.). If you have set yourself a home buying budget lower than your lender has set for you, get and stay clear on what the wiggle room is – if any. If you feel like you’re exceeding it or getting in a red zone with a particular property, heed those internal read flags.

  3.    The location is not quite right.  I’d probably rank location choice right up there in the top 3 home selection regrets I hear after the fact from home owners.  Clearly, the location you can live in is limited by your budget – you can’t expect to live in Beverly Hills on $100K.  But I’m talking more about the various location choices and judgments every buyer has to make within their price range:

  • between a home in the city, near work, or a home in the quiet suburbs where you get much more space – and a much longer commute,
  • near shops and conveniences, or off the beaten path
  • next door to a school or at the end of a quiet cul-de-sac
  • in a row of townhomes with shared walls and an HOA or in an older neighborhood with lots of land between homes –

    you get the gist.

Location compromises should be made carefully and consciously. If that electrical pole in the front yard really bothers you and you talk yourself out of that concern, ask yourself: are you going to end up hating to drive up to your house every night?  The neighbors who seem to take a lot less care with their yards now might become a real thorn in your side over time.  That extra 20 minutes of commute time might not be as minor a lifestyle change as you can talk yourself into believing – in fact, researchers have found that the longer commutes lower overall happiness, so don’t lengthen yours without serious consideration.

In particular, don’t dismiss noise and traffic concerns without giving it real thought – a friend of mine quickly moved his young family out of the home they’d bought in a new town when they realized that the street was so busy that it was nearly impossible to even pull in or out of their own driveway – much less to let the kids play outside.

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Jennifer Ferri, Owner

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