When you are house hunting, the pressure of competition can move you from "Hmm, I like that, but it's too pricey," to "I have to have that!" You think, so what if paying for this house will put me way over budget? I can cut back somewhere else, right? But that kind of thinking can get you into trouble. Trouble that's totally avoidable.
Whether you're in the middle of a home bidding war or facing down a list of must-haves, don't lose sight of your budget and the risks. That way, you can own a house without home buyer's remorse. And you'll have money left to enjoy things like new furniture, entertainment, and just plain having fun.
Who Has Home Buyer's Remorse and Why?
A competitive real estate market can set buyers up to purchase a home that's either beyond their budgets —sometimes hugely beyond — or doesn't meet their needs. In some reports it has been found that recent home buyers, including 64% of millennials, had regrets about their home purchase. The top reason? They were unprepared for maintenance and other home ownership-related costs. On top of that, 13% percent of millennials said they think they paid a higher sales price than they should have.
The reality is that things in homes always break down, so people should put aside a budget for anything that will need fixing. A rule of thumb is to anticipate 1% or 2% of the home price for potential maintenance. So, for example a 300,000 home, that means setting aside 3,000.
We have noticed that today with more and more Property Shows coming to our TV screens, it has influenced a home buyers' unrealistic expectations for the home buying process and how homes should look. In time, buyers can view features that used to be luxuries as necessities. They believe everyone has them and they should too. One solution: Work with a professional Real Estate agent as early as possible in the process. Make sure your agent knows your budget, so they can help you set expectations and stick to them.