April 11, 2016

What is Buyer’s Remorse and How Do You Get Over It?

You’ve been viewing homes for a while now and finally bite the bullet and submitted an offer on a home. Your offer is accepted and you go to bed that night elated and excited. But then, you wake up the next morning, asking yourself troubling questions:

Did I spend too much?

Is this the right place?

Do I even want to move?

Buyer’s remorse is something nearly every new buyer experiences; good agents will even warn their clients about it ahead of time.

Why does buyer’s remorse happen?

Buying a home is likely the largest purchase of your entire life. It’s a lot of money, a lot of responsibility, and a lot of debt. For most, it’s a long-term decision that locks you into one location, so there’s a loss of (hypothetical) flexibility, options, etc.

Even just writing this, I feel a little anxious—and that’s completely normal.

People get buyer’s remorse when buying a turtleneck, let alone a house. It’s human nature to question your purchases, especially when they’re a lofty expense.

Know what you want

Your agent will ask you in your first consultation what you’re looking for, what your dealbreakers are, what you must have versus what you want to have, etc. Be very honest with both your agent and yourself about these details.

If you’re viewing homes with two-car garages, for example, you put in an offer on one of these homes, then think after it’s been accepted “Did I really need that garage? Did I pay extra for it?”, you’ll experience strong remorse because you weren’t being truthful with what you need.

Make a list of details—large to small—then edit it and rewrite it, until you have a list that’s accurate. Your agent should be able to help you assess your needs and wants.

Understand your finances

Paired with your needs and wants, you should know exactly how much you can afford. Determine monthly payments, max mortgage affordability, your down payment—all of it. You might need a four-bedroom home but can only afford three in the area you’re exploring. Instead of stretching your finances to meet that four-bedroom house then regretting it later, reassess—either downsize or find a four-bed in a less expensive neighbourhood.

I’ll stress again that this is a financial commitment, so don’t overlook this step. Just because you were approved for $800,000 doesn’t mean you have to spend every penny.

Tell yourself it’s going to happen

Before you put in an offer, even while you’re looking at homes, remind yourself that you may feel remorse, even if you’re in love with every aspect of this place. The more you acknowledge that buyer’s remorse is going to happen, the less surprised and affected you’ll be when you actually experience it.

Be very confident during bully offers

A lot of buyer’s remorse occurs after bully offers are accepted. Bully offers are early offers in a competitive seller’s market that encourage the seller to accept before offer night, meaning before others have had a chance to draft an offer and submit.

Buyers have to get their offers together quickly to submit bully offers, which means you’d have less time to stew and make a deliberated decision. When submitting a bully offer, you have to be sure you know this is what you want. If you feel rushed—more rushed than you’re comfortable with—you may feel regret the next day, for having not considered certain things.

Common questions after a bully offer:

Did I pay too much?

Would there have actually been other people interested?

Would I have actually had to compete in a bidding war?

Was I rushed into believing this is what I wanted?

If you see a home and are considering a bully offer, work with your agent, your partner, or someone you trust and talk out your thoughts. Write them down. You don’t need a week to decide if you want a certain property, but you do need to address your concerns.

A seller can also get remorse after a bully offer, as they may have had other interest that couldn’t get an offer ready. Sellers have to determine if the offer presented early is actually better than what they could get in a bidding war. It’s a tough call, but sometimes accepting bully offers is the way to go.

There are repercussions to backing out of an offer

If your buyer’s remorse is so bad that you have to back out of your offer, it’s easier said than done.

Once your offer is accepted, your agent has to speak with the listing agent to see if they had other offers. If they did, there’s a chance the runner-up bid will purchase the home. That said, if the sellers receive less than your initial bid, you may be required to pay the difference. And if they don’t receive a second offer at all, you’re in trouble.

In any of these situations, the sellers can take you to court; litigation can last for years and can be extremely costly.

Buyer’s remorse isn’t a fun feeling, but it happens to everyone. Be honest with yourself, be open with your agent, and talk through your thoughts and concerns with people you trust. Typically, people get over their remorse in the first couple days, once they realize the decision is exciting despite their worries, and they can focus on moving, upgrades to the home, and starting a new life in their new place.

Flickr: Ryan