It happens to everyone some time. You’ve made your choice in a new home, and now you’re getting second thoughts – and third thoughts and fourth thoughts for that matter. Even with all the careful planning and Ben Franklin-like forethought, you still have a feeling of impending disaster.
Buyer’s remorse or “cold feet” is that unexplainable, sinking feeling in the pit of your stomach that you’ve made a terrible mistake. It can occur during or shortly after you have signed the purchase agreement on a new home. It can come in the form of a series of questions, all of which can be responded to in “Oh, no!” fashion. Questions like,
- “How can I afford the payments?”
- “How much of what I’m use to doing will I have to give up to have this?”
- “Should I have chosen the house down the street with the bigger yard and smaller family room?”
- “Will I ever take another vacation if I buy this house?”Buyer’s remorse in new home purchases is more prevalent when buyers feel they have picked out a home too quickly and perhaps didn’t take the time to check out other homes in the area that may have also been right for them. And it is more common with first time buyers than with move-up types, going from the freedom of a rental to the heavy, adult-like thought of home ownership.
Homebuyers using the services of a real estate agent and buying a home for the first time should think of their agent as the quintessential professional at making sure that they are choosing the right home at the right time. He or she is also the person instrumental in helping them understand the process from beginning to end, so that they feel secure in proceeding. If this has not happened, it seems probable that the agent has not done his or her job, and buyers are left with uncertainty and fear – feelings contributing to eventual cold feet.
The sad truth is, many agents get so caught up in having clients who say they are “thinking” of buying a home, that they sometimes get them “out there” oftentimes touring potential homes on weekends prematurely. As I have said in previous columns, home buying is among the most intensely emotional buying experiences in many people’s lives. Before buyers even realize it, the agent is talking to them about the elementary school nearby, what affordable house payments can look like, and helping them plan where their furniture could be placed in the new home. When, in all innocence, all the buyers were originally planning to do that weekend was drive around and get a feeling for what’s available.
Buyer’s remorse is not a phenomenon exclusively reserved for first time buyers, however. Even seasoned veterans and people in the industry can experience feelings of impending doom once they have finalized a home purchase. Perhaps this time they have the feeling that they have finally bitten off more than they can chew. Or maybe they are the types who continue to “shop”, second-guessing themselves until they are losing sleep at night (real estate professionals sometimes have a “dangerous knowledge” of their own business, making it even more difficult to make a decision for themselves).
If you are indeed trying to “back out” of a new home purchase and are sure that there is no other decision to be made, the experience may not be a pleasant one. The rules usually say that once the seller (builder) has agreed to and accepted the contract, it’s pretty much a “done deal”. Unless your inspector finds something wrong with the home, your loan pre-approval falls apart, or some disaster befalls you, you are pretty much stuck. In the case of a newly constructed home, buyers usually hand over an earnest money deposit at signing time, which has been held in escrow as part of the entire down payment due at closing. Builders who feel that they have been “damaged” in some way, keeping the home site, half-built house, or inventoried home off the market, can oftentimes produce compelling reasons to keep all or most of that earnest money. And when the builder has already begun to install your selection of upgrades (even electrical and plumbing preparations), they can defend themselves by proving that they have begun to “customize” the house just for you, making them feel justified in keeping earnest money dollars as well.
Each builder deals with escrows that “fall out” differently. If the market is hot, they sometimes will eagerly return earnest money to buyers if they plan a price increase to the next buyer, perhaps reaping them even more than the amount of the deposit in the long run. Others may try to do both and succeed. It’s important to note that although new homebuilders don’t take it as “personally” as private homeowners do when a purchase is about to be cancelled, they won’t take it lightly, either.
The cure for buyer’s remorse is information and time. The more information you or your agent can gather to bolster your decision once this feeling sets in, the more reassured you’ll feel about the course you have taken. And the phrase “time heals all wounds” can apply as well. Even if you proceed with the purchase and move all your worldly belongings into the new home still feeling unsure of your investment, you may feel much differently six months down the road, once you have settled in. And if the feeling remains, you can try to sell. It’s likely, however, that once you’re there, cooking in your new kitchen, watching your kids romp in your new backyard, and meeting some great new neighbors, you’ll start to feel a whole lot better about not giving into your trembling toes so long ago.
Written by Dena Kouremetis