As you embark upon your home search, the pressure of a competitive market can move you from, “hmm, I like this house, but it is way too pricey,” to “I HAVE TO HAVE THIS HOUSE!” You may think, “So what if paying for this house will put me way over my monthly budget? I can always cut back somewhere else, right?” However, this way of thinking can get you into trouble.
Regardless of whether you are in the middle of a home bidding war or if you are set on a specific list of must-haves, it is important to not lose sight of your budget and the potential risks. This way, you can own your home without experiencing home buyer’s remorse. When setting your monthly budget, you will want to have enough wiggle room to enjoy things like new furniture, entertainment, and just plain family fun! Michele Harmon Team has the experience and negotiating skills you need to feel happy and comfortable with your next Real Estate purchase.
Who Experiences Home Buyer’s Remorse and Why?
A competitive Real Estate market can cause buyers to purchase a home that is either beyond their budgets or does not meet their needs, according to a 2021 survey by Bankrate and YouGov. The survey found that 64% of millennials and a significant amount of other recent home buyers, had regrets about their home purchase. The number one reason? They were not prepared to pay for maintenance and other homeownership-related costs. In addition, 13% of millennials said they think they paid a higher sales prices than they should have.
When you become a homeowner, it can be helpful to put aside a budget to prepare for the worst. The last thing you want is your air conditioner to break down in the middle of a hot, Texas summer, with no funds to repair it. Chief Economist at the National Association of REALTORS® says, “a good rule of thumb is to anticipate 1% to 2% of the home price for potential maintenance. So, for a $300,000 home, that means setting aside $3,000.”
According to a National Association of Realtors (NAR) report on home staging, many of today’s home buyers are tempted to go over budget because they have been influenced by the beautiful homes featured on popular Real Estate TV shows. “The shows can create unrealistic expectations for the home buying process and how homes should look,” said Brandi Snowden, NAR Director of Member and Consumer Survey Research. These expectations cause buyers to view features previously considered luxuries as necessities. They believe everyone has these luxuries, and they should, too.
The solution is to work with Michele Harmon Team as early as possible in the home buying process. If you communicate your budget with us, we can help you set expectations and stick to them.
The Not So Secret Secrets to Preventing Buyer’s Remorse
- Ensure Your Best Interests are Kept in Mind
Every Real Estate Agent is expected to perform five fiduciary duties to their clients. These duties include:
- Reasonable Care
In today’s tough market, many Real Estate Agents are recommending buyers to waive contingencies in order to help them win bidding wars. However, they are not practicing reasonable care by explaining the potential risks involved with waiving these contingencies.
For example, an appraisal contingency gives you choices as a buyer.
- Choice #1:
A low appraisal gives you the opportunity to try to renegotiate with the seller. This is when you can rely on Michele Harmon Team – and our excellent negotiating skills-to go to bat for you.
- Choice #2
If you are financing, lenders will not loan more than the appraised value. However, you can choose if you want to bring in cash to make up the difference
- Choice #3:
You can choose to terminate the contract and have your earnest money returned.
Some buyers are also being encouraged to waive contingencies related to home inspections. A home inspection allows a home inspector to view the home and report potential structural or hazardous issues. The home inspector’s findings can serve as a valuable bargaining tool.
Eliminating your protections can end up costing you money and you may end up regretting your home purchase. As you navigate a competitive market, you may experience a few losing offers and find yourself more tolerant of risks. Michele Harmon Team is here to help guide you through today’s bidding wars and we will always provide you with excellent service that goes above and beyond the five fiduciary duties. We will strongly negotiate on your behalf and ensure you are aware of the potential risks of removing your buyer protections.
- Act Fast and Take Notes
Because of how hot the market is, Real Estate Agents are scheduling showings within minutes of a property being listed. Michele Harmon Team is composed of five full-time Sales Partners who are 100% dedicated to finding and securing the home of your dreams. Once you provide us with your home wants and requirements, we can help you find a home that matches your specific criteria the moment it hits the market.
Once we schedule a day of showings, it can be difficult to keep track of what you like and don’t like with each house. It can be helpful to take notes and rank the home based on your priority list immediately after touring a home.
- Be Open to Meeting in the Middle
Once you begin home shopping, you will quickly realize today’s market is tough, but do not be discouraged! In a situation where listings are receiving multiple offers, and homes are selling for above list price, be open to homes that fit below your maximum price range. If your goal is to purchase a house before a significant spike in mortgage rates, meeting somewhere in the middle may help. For example, if $300,000 is your upper limit, consider looking at homes priced between $250,000-$275,000 to avoid being outbid from the gate every time. Michele Harmon Team has completed multiple Real Estate transactions throughout the Northwest Houston area. We can help you calculate the average over-listing price similar homes are being sold for and factor that into your offer price.
- Learn from Experiences
Having access to information and guidance can help you make an offer in a competitive market. Today’s buyers are writing offers on many properties before they get their offer accepted. Consider each offer a learning opportunity about what information you may need to move more quickly. When you act on advice from Michele Harmon Team and recent buyers, you can stay well informed and get good results despite the tough market, and that is the BEST way to prevent home buyer’s remorse.
For questions or more information about the buying process, call Michele Harmon Team at 713-818-1330. We look forward to hearing from you and helping you reach your Real Estate goals!