Think of all the houses on your street right now…
Almost half of those residents are haunted with buyers remorse. According to studies done by Nerdwallet, 49% of home buyers live with regret.
The home buying process can get confusing, and even overwhelming. It’s too easy to make mistakes. That’s why thousands of homeowners are left feeling hopeless, devastated, and enraged.
Yet, many people rush in unprepared. The best way to prepare yourself – and avoid costly mistakes – is with knowledge.
In the next few paragraphs you’re going to learn 5 huge mistakes homeowners regret.
1. Neighborhood tunnel vision
Are you fixated on specific neighborhoods?
Most buyers do this without realizing it. It’s one thing to scout different neighborhoods. It’s another to restrict your search to only those neighborhoods. It limits your options. Like many others, you could end up missing out on finding a better deal in an overlooked neighborhood.
What happens is, according to Sarah Staley, housing expert at Realtor.com, is this: Many buyers tend to be laser focused on specific neighborhoods. This tunnel vision actually pigeonholes you into one area.
The best way to find your perfect home, Staley says, is to branch out into different neighborhoods. That increases your chance of finding a home with the space and features you need: a bigger back yard, more bedrooms and bathrooms for example.
Even if you have a specific neighborhood in mind, make it a point to pop in and check out what some other neighborhoods have to offer.
You might find a better deal.
2. Bought on emotional impulse
This one is sneaky…
Buying a home can become an emotional roller coaster. The sneaky part about emotion: It takes control of your decisions without you realizing. Once you get carried away by your emotions, it’s very hard to turn back.
It’s understandable. Your home is where you relax, raise your children. “Home is where the heart is”. But many people get swept away by small things: The beautiful staging, the fancy curtains. They ignore the major things: The crack in the floor, the water stain on the ceiling.
If you fall in love with a house, it’s easy to justify its problems. You think to yourself, “That’s not a big deal. I can probably fix that.” In reality, each problem could cost you a small fortune to fix. We’ll explore a solution to this issue in No. 4.
Buying on emotional impulse can leave you thousand of dollars in debt. The best defense you have against it, is to be aware of it. Don’t try to suppress it, but acknowledge it. That way it can’t control you. Because once it takes control, it’s hard to rationalize and think straight.
Best thing I can recommend is this: Write down the pros and cons for each house. Add all your emotions. Pros: I love the kitchen. Cons: house is a little small. (1 out of 3 buyers regret not buying a bigger house according to study done by Trulia.)
Do this and you won’t regret it.
3. “Should’ve put a bigger down payment”
Bigger down payment = saving $1,000s on interest.
If you can put a 20% down payment, you’re better off in the long run. With 20% down you could avoid having to pay mortgage insurance. In fact, the bigger down payment, the less risky you look to the bank.
That means you’ll be able to qualify for a lower interest rate. As a result, you’ll have a lower monthly payment. It adds up to several thousands of dollars back in your pocket.
Many buyers rush into home ownership. Take your time. It pays to save up for a bigger down payment.
4. “Wish I had the house inspected”
Get the house thoroughly inspected. It works in your favor in two ways:
1. If there’s damage you’ll know how much it will cost upfront. Some houses have structural damage. Many homes have leak issues, bad plumbing. You might not be able to spot the telltale signs right away. After months or years of living there, these problems will pop up at the worst time.
General inspection may cost $300-$500. It’s well worth it when you’re investing $180,000+ in the house. I’d even recommend hiring a specialist inspector to catch things the general inspector doesn’t check, like the septic system. The last thing you need is double payments: one for the house, another to repair it.
2. If there are issues, use it as leverage to negotiate a better deal on the house. Oldest trick in the negotiating handbook (if there is one). Explain that repairs are going to cost you $______. You believe a fair price would be $______. Simple as that.
Good sellers will want to reach an agreement.
5. “Wish I knew all my loan options upfront” or “I should’ve shopped around for a loan”
Here’s the brutal truth about mortgage loans:
They can be confusing. There are so many loan options out there: FHA loan, 30-year fixed, 15-year fixed, adjustable rate, and so on. Then you have mortgage points, interest rate, APR. An extra half percent interest rate can mean you’re paying tens of thousands of dollars more for your loan.
Figuring all this out on your own could take you weeks… months… even years. This is why most home buyers skip it – and then later regret it.
Good news is: Shopping for loans doesn’t have to be complicated or frustrating.
It’s important that you get the right loan for your unique situation. That way you’re able to get the best rate possible.
The easiest way to shop for loans is to get pre-approved. That way you’ll know how much you can afford and what your options are. Also, you’ll be able to find the best rates for each option.
Don’t get stuck paying more for your mortgage. Get pre-approved now and find out what options are available to you.