Buyer’s Remorse

“Buyer’s Remorse” is an emotional phenomenon that affects a large number of people who are in the midst of making major purchasing decisions.  These particular decisions can be quite unsettling, and will often formulate anxiety for the person involved.  Most people purchasing “big ticket” items will question their decision at least once during the transaction process.  It is safe to assume that you are not the first person (and conceivably will not be the last) ever to debate if the right decision was made.  Feelings of regret and trepidation are perfectly normal and should not be dismissed.  There can be many concerns running through your head after a purchase, as “buyer’s remorse” grasps at you. Did I pay too much? Can I afford the payments?  Did I move to quickly? Did I choose the right home? Am I making a mistake?  These questions are all perfectly legitimate and need to be answered; however, you will not find the right answers unless you learn to remove the emotions from your decision-making abilities. 

As your mortgage broker, the first thing we do when addressing “buyer’s remorse” is to acknowledge its presence.   We understand that this will be one of the most important decisions of your life.  Our job is to put in the extra effort needed to ensure you have the information you need to feel secure in your decision. 

An exemplary broker will realize that there is more value in a single client than in any single transaction.  My professional relationship with you is far more important than any immediate transaction we set forth for you.  Some people may question such mentality; but if our relationship is nourished to the extent that I am your only trusted mortgage broker, I believe you will have confidence in me and will allow me into your inner circle.  This will open the door for future business opportunities, generated by your friends and family, which will far exceed the earning power of any current transaction. 

How does this affect you? Simply put, we will do whatever is needed, including help with relieving you of a contractual obligation, or cancelling a refinance when you are not ready for it, 100%.  Therefore, the feeling of pressure and obligation that someone might have to close on their transaction vanishes.  Remember: you can terminate your relationship with us at will; you are the boss, and thus it is your right to move this process in any direction you choose. 

Now let us address some of the major concerns you might have, before “buyer’s remorse” begins to sneak its way in.

“Did I pay too much?”  Having confidence that you have made a wise payment amount for a home is easier said than done.  To have confidence in your decision, you should ask yourself if you feel the home is worth the amount you offered.  It may seem strange to ask yourself this, but it is essential that you review your options: you don’t necessarily have to buy a home today, as you can choose to rent.  If you feel that the home is worth the amount you are paying, then chances are it is worth it. 

Value will also be determined by an independent appraiser.  An appraiser will value the home at fair market value, which will give you an opinion of value from an expert.  You can then compare that value to the price being offered to gauge if you are paying more than the actual value. 

If you need additional reassurance, you can compare any and all homes that have sold in that particular area during the last 90 days.  The transaction price from these homes will give you an adequate assessment of what is the price demand for the area.  The price demand will determine the value of the home, which can also be compared to what you offered.

“Can I afford to make these payments?” If you think that purchasing a home will create financial hardships for you or your family, then it is best to reconsider the matter.  As for determining what your payments will be, it is not difficult.  If we focus your search on the right price range, to assure that your payments fall within your established budget, then payment concerns are no longer an issue. 

You may also want to review the tax benefit you earn for paying interest on a home loan.  The tax benefit you receive for paying interest on a home can be substantial enough to alleviate the payment shock felt when buying a home.  I normally ask my clients this question: “if we kept the payments where they are right now, but had the ability to increase your monthly income, would the payment still be an issue?”  In most cases, the answer is “no”. 

You should also compile a budget worksheet, for the benefit of comparing what your income is to what you are paying out.  Examine the impact of adding a house payment to your current budget. If you don’t feel that this will be manageable with your budget, then simply walk away.  You can’t put a price on peace of mind, but I will let you in on a little secret: it is worth more than you think.   

“Did I move too quickly?”  This concern does not turn up often, but when it does it can be a little arduous to overcome.  The first thing you should always remember is that you are in charge.  We will move at a pace that suits you best. Most brokers are quite accomplished at making sure you feel comfortable in your decisions, and will not push you any quicker then you want.  If anything, we have witnessed how the mortgage lending industry moves more slowly than clients would prefer.  Regardless of the market standards, the pace a transaction will move is dependent on you and what your expectations are. 

On average, buyers are less concerned with the swiftness a decision was made and are more concerned with whether or not the decision made was right.  The question that always pops up in these situations is “if I had waited a little longer would I have found something better?”  The answer is yes.  Surprised? Allow me to put it into perspective.  Occasionally, a transaction will not go through and a buyer is required to look for a new home.  When the buyer returns to the market to look it is common that they will find a home they believe is better than their original selection.  If, under unforeseen circumstances, they are forced back into the market, it is inevitable that they will find something even better.  The reason why buyers find something better every time they look is because of the perceived value of the new property.  

When a home loan fails and a buyer is required to look for a new home, the value coupled with the first home will be prominent.  Every time that buyer looks at another home the value from the previous home will be compared to the new home.  A buyer will not likely offer on another home unless the perceived value on the new home is better than that of the first home.  Consider this: would you offer the same price on another home that you thought carried a lesser value than the original home you considered?  Rather than making an offer, you would decide to continue your search.  You would continue to look until you found a home that you believed had either the same or slightly better value than the original home. 

It is imperative you know that when you return to the market to find a new home, you will not stop until you are assured you have found something better.  You should recognize that the reason you have found something better is because you are contrasting it with something that you walked away from, either by choice or requirement.  In any event, when the original home no longer becomes a viable option, you will continue to look until you perceive that something better exists; once this happens, you will offer on that home.  However, if you are confident that the home you choose--no matter how quickly it was decided--is the best choice, then you would be right.  You will not find anything better and you will remain undaunted in your decision. The reason is unambiguous: when you are not looking for something better, you won’t find anything better, period.J 

“Did I make a mistake?”  The answer to this question factors down to researching and understanding your needs.  Most clients, who challenge the wisdom in their decision to buy or not buy, are not even positive they want to buy.  It is much easier to help clients eliminate “buyer’s remorse” when their desire to buy exists, and the client merely lacks the confidence in a specific element of the buying decision.  However, if it is just the overall decision to buy or not that hinders the client, then it is up to the client to rectify it.  I can help you identify what might be the cause of your “remorse”, but the fact remains that there could be some unresolved issues with the decision to buy.  In a black and white world, your only options in this matter would be, “yes, I want to buy” or “no, I will wait to buy another time.”  When someone buys and then questions the purchase decision itself, more than likely they have launched into the buying process before they were prepared. This is an example of how proper research, from the start, is indispensable. You should document all of the questions you have, pertaining to whether or not buying a home is the right decision for you. Once you have completed the task, put it aside and review it on a later date.  When you return to the list, contemplate and list supplementary questions you have now or questions you may have ignored.  Once you have compiled all your questions onto a list, begin research on the answers.  While some answers will come directly from you, most answers will come from professionals in the real estate industry.  The majority of mortgage and real estate brokers work on a commission basis, which means that the initial consultation is free of charge.  Consulting with these professionals will prove advantageous for you as you find answers to your real estate questions. 

Note: just because your questions have been answered it does guarantee you will understand everything you need to know.  Therefore, seek to have unresolved issues resolved.  Once you have completed the research, and obtained a complete understanding of the issues that are subject to making the decision, you will no longer doubt whether buying is a mistake or not.  It will be definite, absolute, black or white, yes or no, plain and simple. If you decide to buy you will proceed to buy; if not, you will postpone it for another day. 

Most people feel some form or element of anxiety and nervousness when having to speak in public.  The level of anxiety and nervousness can correlate to the amount of preparation a speaker requires to achieve a level of comfort for such a responsibility.  Regardless of how much preparation you believe you need, the more you prepare the less nervous you will be.  Then again, you might believe that in spite of your explicit preparation you are still going to be nervous, since you are still facing a nerve-wracking assignment. To remedy the situation, you can choose not to speak, and your anxiety and nervousness will soon pass.  On the other hand, if you decide to speak and have done enough preparation, you will feel comfortable enough to move forward with your speech.   

“Buyer’s remorse” can befall you at any time, but please remember you have people that can help you manage and conquer these feelings.  The buying process should be a pleasurable experience for you and your family.  We will do everything within our power and resources to secure this.  We pride ourselves on complete satisfaction, and if we do not comply with that expectation, then we have forsaken our jobs.