When you buy your first house, you want to spend your mornings waking up in your new bedroom feeling happy about your decision — not opening your eyes and wondering immediately how much longer you have to live here. Even if you ticked everything on your list in your new home, it’s common for buyers to have second thoughts about the purchase.
According to Jerrold Thompson, an agent in New York, about “a week before the closing or at the final walkthrough, the buyer has basic anxiety about such a big economic decision.” He points out that few buyers have much experience, buying and selling only a few times in their life, and this leads to more anxiety.
Buyer’s remorse is all too common with human beings, whether it’s a splurge on a new purse or a night out. But with something like a house, where you’ll be stuck for a few years, you need to figure out your next steps. Here’s how to handle buyer’s remorse if you just bought a house.
Defining buyer’s remorse
Psychologists define buyer’s remorse as a type of cognitive dissonance. As humans, sometimes we want things that are in direct opposition to each other — for example, we want to buy a house, and we also want to travel and eat out and have a nice lifestyle. The moment we commit to one path (buying a house), we worry that the other choice might have made us happier.
Thompson thinks that it’s easy for doubt to creep in, “especially if buyers haven’t gone through the ebbs and flows and highs and lows of the emotional part of those transactions.” If one of Thompson’s clients struggles with buyer’s remorse, he’ll sit down, listen to their concerns, and walk them through all the reasons they decided to buy. Often, this reassures them that they made the right decision.
Humans deal with buyer’s remorse by making “post-purchase rationalizations,” which sometimes can stave off buyer’s remorse if they’re easy to uphold. For example, we rationalize that buying a home was the right financial move, or that we now have a shorter commute with this house — whatever rationalization relates to things we value. When it’s not so easy, though, we start to have problems.
Why do people feel buyer’s remorse?
Most of the underlying causes of buyer’s remorse relate to the big change that owning a home brings into your life. Knowing what to expect can help you manage your emotions as you adjust to this change.
Maintenance is overwhelming and expensive
The moment you realize you can’t pick up the phone and call the landlord about the broken toilet, the reality of being a homeowner sinks in. When you own a home, maintenance responsibilities fall on your shoulders. In one survey, 18% of homeowners who indicated that they felt buyer’s remorse attributed it to unexpected maintenance and hidden costs.
How to handle it? Make a home-maintenance plan to maintain major systems. Preventative maintenance helps prevent emergencies, too. You can learn how to do many tasks (caulking windows, for example) from YouTube videos or through free classes at your local home improvement store. Once you have a plan, you’ll likely feel more in control and less panicked.
Also, consider outsourcing tasks like lawn maintenance or snow removal. Get recommendations from neighbors and quotes for services. Thompson has seen that if a buyer feels remorse because of the upkeep involved, once they “start to collect the data, it usually supports that it’s not as large a task as they thought it would be.”
You don’t like the location
What if you didn’t realize when you bought that the nearby train ran all night and you can’t sleep from the noise pollution? Or your neighbor hosts loud parties in their backyard during the summer. Location issues are tough to fix — but you have some options.
You can wait it out two years to avoid capital gains taxes. In the meantime, buy earplugs or install a fence, and then sell.
If you can afford to move again, buy a different home in another neighborhood and turn this home into an investment property. While becoming a landlord brings its own issues, renting the house might be your best choice.
If you truly can’t stand the location, you can talk to an agent today and see if there’s any way for you to get out of there sooner, or if they have any other ideas.
It’s a bad investment
Sometimes you bought at the top of the market, and you realize you won’t make money if you sell. You might even worry about recouping your initial investment. This is why most financial experts advise buying a house you intend to live in as a home for at least five years, rather than as an investment.
It can also be tough to see your savings account shrink after making the down payment. After all, now you don’t have that cash available for emergencies. But instead of viewing the money as “gone,” shift to thinking of it as reinvested in your home. It’s still there, just less liquid than before.
When you’re buying as a homeowner, not an investor, price appreciation is a bonus. You can hold the home for longer, and you’re also getting the benefit of living there until it’s time to sell.
The mortgage payment is too high
Maybe your mortgage payment is higher than you expected. Or, perhaps you underestimated the difficulty of sticking to a budget. Whatever the reason, you’re dreading paying your mortgage each month.
To handle buyer’s remorse related to your payment, Thompson advises looking at your overall financial picture. “Talk to a good accountant. The payment might be a little tight initially, but you might get money back in your income taxes because your stated deductions could be increased,” he says. Use a larger tax refund to offset mortgage payments or other costs of owning a home.
It’s possible to generate some income with your house and rent out a room, or the whole place on weekends as a vacation rental (in certain markets). This is also a solution if you’re feeling overwhelmed by your new home’s size.
In larger cities such as Boston or New York, you could rent a garage or parking spaces, or a home office. If you bought an old Victorian, think about hosting a bed and breakfast to help cover your mortgage.
Eventually, you’ll be able to refinance once you have more equity in the home and likely lower your payment.
The mortgage rate could be lower
Did the Federal Reserve drop rates a month after you closed on your new home? Wishing you’d snagged a lower interest rate could definitely contribute to buyer’s remorse, but it’s a pretty easy fix. Hang out for a few months, and you may get an offer to refinance.
Keep working on your credit, too — you can always refinance when you have more equity and get a better deal.
The house is too big
If you lived in apartments for years, a home might feel too big. The thought of furnishing and cleaning it can be intimidating. While you could downsize, it’s not something you can do overnight.
Instead, break the large task into manageable chunks. Tackle buying furniture room by room, a bit at a time, and don’t feel pressured to do it all at once. You might start to enjoy gradually decorating and filling the space.
Buyer’s remorse is normal
Unfortunately, there’s no return policy on a house. You will have to learn to live with your decision (at least for the time being).
It may help to remember that Thompson thinks that “buyer’s remorse is a normal part of every purchase transaction. Real estate being so large, it’s something that every buyer goes through.”
Remember — this, too, shall pass. And then you’ll be living in a place that’s all your own!
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