We’ve all been there, scrolling through Instagram or Facebook and an advertisement pops up and what do you do? An impulse purchase, and you end up regretting it and feeling buyers remorse. We all can probably live with that on a smaller purchase, but if we buy a house and have buyers remorse, that is a whole other ball game.
A study by Homelight, conducted in 2022 found that more than 70% of people who purchased homes (between 2020-2022 in the United States) had at least 1 regret about their home purchase. In this video and article we will review the top 5 regrets these buyers felt about their home purchase. We’ll also give you some ideas on ways to keep from having those same regrets when you go to buy a home.
A study by Homelight, conducted in 2022 found that more than 70% of people who purchased homes (between 2020-2022 in the United States) had at least 1 regret about their home purchase. In this video and article we will review the top 5 regrets these buyers felt about their home purchase. We’ll also give you some ideas on ways to keep from having those same regrets when you go to buy a home. Here’s the top 5 regrets:
I feel that I overpaid for my home.
I under estimated how much maintenance a home requires.
I feel that I decided which home to buy too quickly.
I under estimated the total cost of owning a home.
I wish the layout of the home was more conducive to my lifestyle.
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1. I feel that I overpaid for my home
Once rates went up, around the middle of 2022, prices began to fall. In January, the average home price fell by 16% since the peak of June 2022. This data could make people second guess their recent home purchase, even if they secured a 2.5-3.5% mortgage rate. However, over the long run home prices tend to rebound and increase. Since January home prices have rebounded and have passed the peak of 2022. As of May 2023, the average home price in the Charlotte area has increased 11% from the average home price in May 2022. Warren Buffet always says, “Time in the market always beats timing the market.”
How to avoid overpaying for a home:
So how do you prevent overpaying for a home? Well first of all make sure you have an agent who understands the real estate market. Does the realtor that you’re working with have a deep understanding of the housing market and overall economy? Are they able to properly identify acceptable home price? Does your realtor shoot educational videos and blogs like this one? Do they take time to educate the public on the market? Do they take time to educate you?
It’s important to have an expert that keeps a close eye on the pulse of the market. An agent who does a lot of business will have a better, more realistic picture of the overall market. Your realtor should be able to advise you properly, to make sure you’re not overpaying for a home. No one can know for sure if the market will go up or go down, however there are many leading indicators that you can pay close attention to that will help you make an educated decision on what to offer on your dream home.
If you’re curious if now is, in fact, the right time for you to purchase a home, then you’re in luck! We put together an entire blog/video answering that very question:
Click Below to view:
Is NOW a good time to buy a house in Charlotte? Or WAIT for the bottom?
Prices and rates are high and you want to make sure you don’t stretch yourself too much to where you become house poor. You don’t want to be living on canned food and ramen noodles just to get into a home.
Selling A House Shouldn’t be Stressful
There is a pro-active way to sell your home that gets results
2. I under estimated how much Maintenance a home requires.
If you’ve never owned a home before you may not understand the cost of maintaining a home. There’s a lot that goes into keeping a home up. Here’s just a few things you may need to budget for:
- Lawn care
- Cosmetic items like paint and flooring
- Minor repairs like a leaky toilet or replacing a lightbulb
- Major repairs like replacing a roof or HVAC unit
There’s no more calling the landlord anymore, these repairs would fall on you to take care of. These items can add up quickly and end up costing you an arm and a leg! After doing a little research, we were able to find that many experts say that you should budget, on average, about 1% of the value of your home for yearly repairs. So for a $500,000 home, you would want to budget $5,000 a year.
Of course it depends on the age of the home and the age of different components like the HVAC, roof, and water heater. On a $500,000 home, this means you would want to save about $416 a month for any possible issues or repairs. You would want to have this as a budgeted item and set that money aside for a rainy day (possibly quite literally).
How to avoid being surprised with costly repairs:
There’s a ton of research you can, prior to closing on your new home, to fully understand a homes condition. Even if you’re buying a brand new home, we always recommend hiring a licensed home inspector to inspect the home. You can also obtain a termite inspection, well/septic inspection, pool inspection, radon inspection, mold inspection, HVAC inspection, etc. The more research you do prior to the home closing, the better prepared you will be for the future. Getting a licensed professional to inspect the home is also a great way to identify any major issues with the home. Major issues can affect the homes overall value, and its good to know these items up front.
Also, even if the HVAC works and there are no leaks in the roof, know the average life expectancy is around 15-20 years. So if the HVAC or roof is around 15-17 years old, you may want to budget a bit more to eventually replace them.
Spending a little bit extra money up front and doing a little research can save you tens of thousands of dollars down the line. It will also help you create your monthly repair budget !
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3. I feel that I decided which home to buy too quickly.
Keep in mind, this survey was completed in February 2022, looking back 2 years prior. This was when the market was crazy, multiple offers were the norm. It was more likely a home was in a very competitive “highest and best” multiple offer scenario than not. Buyers were rushing to buy and lock in their mortgage rate before they rose. This euphoria forced many buyers to make quick decisions.
Now fast forward to today, what can you do to make sure you don’t have to make a quick/hasty decision?
How to avoid feeling pressured into making a quick decision:
If you’re looking for a home in a highly desirable area, the area with good schools, anywhere from $400,000 to $1,000,000 than you may still experience a multiple offer situation, where you still may have to make a quick decision. Especially, if it is a very nice, well kept, and renovated home.
This is why it’s important to take some time, before you even look at homes, and put together a thorough needs vs. wants list (see step #5). If you know exactly what you need in a home, before you begin your home search, you will be able to quickly identify if a home fits your needs. So when you find yourself in a pressured, competitive, situation you know that the home will fit you and your families needs!
Recently, we’ve seen many buyers experience “sticker shock” when they begin their home search. They thought they could have all of the things they want for $750,000. But, after seeing the market and prices, their expectations didn’t meet reality. So, when this happens, its important to re-adjust your expectations to fit in your budget. This will help you make sure you don’t make a decision you regret and put you and your family into a difficult financial position.
Now, there are many properties in this market that will not have a immense amount of competition from home buyers. In these cases, you may not be in a bidding war with other buyers. You may find less competition if you’re looking for a property a bit further outside the Charlotte, North Carolina area, maybe a place that doesn’t have the best schools. You will find less competition on the homes that need a little work or are a bit outdated. These homes may not be high pressure situations, which means you don’t have to make a quick decision. You may have more options and a day or two to sleep on it, or even a 2nd showing.
I often tell my clients: “If you find that perfect home and you sleep on it, you may not sleep in it.” Which is true, you never know when another offer is coming in. But, I definitely don’t want you to sleep in it for the next 5-10 years and be unhappy. So make sure you know what you’re looking for and be okay with saying NO.
4. I underestimated the total cost of owning a home.
Owning a home can be costly! You aren’t just responsible for the mortgage payment, there’s other requirements involved. You’re also responsible for property taxes, insurance, and other fees. You have to pay property taxes, no matter what. In Mecklenburg county, where we help many buyers and sellers, the property tax is 61.69 cents per $100 of the homes tax value. If you’re looking in South Carolina there are two different tax rates, one for primary occupants and one for non primary occupants. This small difference can make a HUGE difference in your property tax obligation. These are things you want to make sure you understand prior to purchasing the home.
If you have a mortgage, your property taxes will be escrowed. Your mortgage lender will take a small amount every month to pay your taxes and homeowners insurance on your behalf once a year. If this is the case you don’t have to budget for these, they will be included in your mortgage.
When you’re shopping for homeowners insurance you should do your homework. The #1 mistake I see homebuyers make is that they don’t talk to a professional insurance agent right from the start. Right when your offer is accepted you should begin talking to homeowners insurance representatives. This will give you time to make sure there are no historical losses or claims that have never been fixed. You’ll also have more time to obtain a better idea of what type of insurance is best for you to cover those emergencies. This is very important in case anything happens, you’ll have the right insurance to cover it.
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If you’re new to the area or thinking about moving here, were happy to show you what makes it home.
5. I wish the layout of the home was more conducive to my lifestyle.
You finally get into your new house, get settled in, and a couple months later you realize that something’s just not right. The home just doesn’t have the space you need to accommodate your lifestyle. This can easily be a home buyers worst nightmare. How do you prevent this from happening?
When first meeting with our clients we take much more time up front to help our clients identify what’s truly important to them in a home. We always recommend our client take time to complete a needs vs. wants exercise. This helps them put whats most important into perspective.
Needs vs. Wants exercise:
So what’s the needs vs. wants exercise? Its very simple! You take a white sheet of paper; at the very top of the left side you write “Needs,” and at the very top of the right side you write “Wants.” I always recommend each spouse completes this exercise separately. Once complete you can come back together and compare notes. This will help get both peoples opinions and discover whats most important.
So, what are wants and what are needs?
Needs are MUST have’s. These items that, if not present, you won’t even look at the home. For example, if you have to have a 4 bedroom due to a certain # of children or you work from home and you need a home office. If this is the case, share this with your agent and tell them to not show you anything with less than 4 bedrooms.
Or, if you need a primary on the main level due to health concerns then you can eliminate any home that doesn’t have a primary on the main level.
The needs list should be pretty short, the wants list can be longer.
Wants are fun! This can be used as your wish list. Wants are items that you don’t absolutely need, but if it was in a home it would be a plus!
Many times we have clients say they want a primary on the main level. Then we start looking at homes and find that, in their price range, we’re not finding any home that they like with a primary on the main level. If this is in the wants column, we know we can start looking at other homes with a primary bedroom upstairs.
You can have as long of a wants as you’d like!
Spending a little bit more time upfront and doing your homework will give you a MUCH better idea on what you absolutely have to have in a home to make you happy. It will also help you identify items you’d like to have in a home. Once you have completed your needs vs. wants list, make sure to share this list with your realtor!
It’s disturbing to me that over 70% of people over the last 2 years have regrets on their home purchase. Everyone on our team’s #1 goal is to make sure that when you purchase your home there’s absolutely no regrets. We make sure that when you move in you guys are extremely happy with your home! Our team is dedicated to making this happen, so feel free to reach out to us. We would love to give you a consultation on the overall process.
If you’re one of those 70% of home buyers who regret their home purchase in the past couple of years, feel free to also reach out. We would be happy to discuss your options and how to put you and your family in a better, happier, position. Feel free to call, text, or email us today:
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