When you’re in the market for a new home, you need to move quickly—especially in competitive markets—so that you don’t miss out on your dream home. But, you don’t want to move so fast that you overlook potential money pits or other problems that could trigger buyer’s remorse.
After all, buying a new home is likely the biggest purchase of your lifetime. A new study from Bankrate found that nearly two-thirds (63%) of millennial homebuyers have some regrets in regard to their home purchases.
While millennials tend to have the largest share of buyer’s remorse, overall, 44% of homebuyers have some regrets.
We’re zoning in on some of the common regrets that homebuyers have and dishing out some tips to help you avoid the same missteps. Here’s what you need to know:
Regret #1: Maintenance and other costs more expensive than expected
(Accounted for 18% of buyer regrets)
Home inspections aren’t typically required by lenders, but they can help you save money in the future by identifying potential problems that will eat up your maintenance budget.
A home inspector, for example, will be able to assess the condition of the home’s roof and HVAC systems, which can be costly to repair. Also, if an inspection uncovers problems with the home, it’s possible the seller will agree to pay for the repairs before you move in.
Understand that when it comes to budgeting for a home, there are many costs that can pop up and surprise you. For example, here are nine unexpected mortgage closing costs that can come up. The best thing you can do to prepare yourself? Do your research!
Pro tip: When you’re considering a home, it’s a good idea to ask about homeowner association fees, and whether there are any upcoming homeowner assessments.
In addition, you’ll want to look into how much you’ll be paying in local property taxes and how much money you’ll need to set aside for homeowners insurance.
It’s also a good idea to come up with a maintenance budget to cover costs such as yard care, snow removal, gutter cleaning, pressure washing and HVAC maintenance.
Regret #2: House size
When you’re touring a home, it’s important to remember that careful thought likely went into how the home was staged. Well-staged homes tend to be clutter-free, and, while that’s aspirational, it may not be realistic and it can make a home appear more spacious.
On the other hand, if you’re concerned with buying too large of a home, do some research into what your energy bills will be.
Could some eco-friendly appliances or renovations help you save money in the long run? Could you rent out part of the home? Will you eventually need space to grow into? These are all considerations to take into account before making that offer.
Regret #3: It’s in a bad location
(Accounted for 8% of buyer regrets)
Be ready to pepper your real estate agent with questions during your next home tour. What school district does the neighborhood feed into? What’s the morning commute like? Are there any noise issues from nearby streets? If you love the outdoors, how close are you to biking and hiking trails?
Also, take a look at the local city council minutes: What issues are people raising with elected officials during public comment?
Regret #4: Not a good investment
(Accounted for 7% of buyer regrets)
Home buying has great financial advantages, from appreciation in value to tax write-offs. Instead of paying rent, you’re building equity with your monthly mortgage payments.
But there may be some reasons why home buying may not be ideal for you at this stage in life. Perhaps because you move frequently for work, or are planning a career change.
To get an unbiased opinion, you could weigh the pros and cons with a certified financial planner or a wealth management and planning expert.
Regret #5: Mortgage payment is too high
(Accounted for 7% of buyer regrets)
You do need to go through the qualification and application process before you get a clear figure on what your mortgage will be. Prior to purchasing your new home, you can work with your lender to find a property that best fits your budget.
When you’re renting, rental rates can fluctuate based on supply and demand and property improvements. When you buy, you can enjoy more stability in knowing what your mortgage will be each month. But, understand that HOA fees, taxes and insurance may fluctuate.
Regret #6: Didn’t get the best mortgage rate
(Accounted for 6% of buyer regrets)
A great rate can save you thousands over the life of your loan. Working with a lender you trust can help you secure the best rates.
Because your credit score is so important in helping you get a competitive interest rate, here are some tips for boosting your score prior to buying.
One final tip: One of the most important things you can do to avoid home buyer’s remorse? Work with an experienced real estate agent with lots of localized knowledge. You’ll want to find someone who has your best interests in mind. A great real estate agent can help make sure you’re bidding on homes that work for you and your family. We’ve got some easy tips for how to choose one here.
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