“Making the biggest financial decision of your life under duress is rarely the recipe for a good outcome.” So says Greg McBride, chief financial analyst at Bankrate.com, summoning up the “buyer’s remorse” impacting over 75% of pandemic home buyers.
Here are some specifics:
• Almost 73% of pandemic home buyers regret some aspect of their purchase, and 60% have experienced some form of buyer’s remorse. Here’s a breakdown:
Too much maintenance | 40% |
Too small/lacks features | 32% |
Uprepared for hidden costs | 30% |
Mortgage is too high | 28% |
Interest rate is too high | 26% |
Bad location | 25% |
Value depreciation | 24% |
Didn't do enough research before buying | 23% |
How Do These Figures Play Out?
Buying a home during a public health crisis, social unrest, and political turmoil, whether to protect your family or get more square footage to accommodate a work-from-home area and kids’ online classes, may have offered a sense of control, but doing so usually came without the thoughtful planning that characterizes purchase decisions in less stressful times.
Peer pressure compelled some buyers to sign on the dotted line as they saw their friends and neighbors buying larger homes or moving out of the cities, according to Washington DC-based clinical psychologist Jelena Kecmanovic.
Many people snapped up property at the height of a voltaic market, often waiving inspections and contingencies to make their offers more competitive. Now they realize that repairs and needed improvements are more extensive and costly than thought.
Once the novelty of a new home has worn off, the sometimes steep mortgage payments become unnerving. Many homebuyers did not lock in interest rates and missed out on the historically low rates that others were able to secure.
Needing to follow employment opportunities, many buyers had to purchase homes sight-unseen in unknown markets, only to find significant flaws that would cost a lot to fix, the location meant interminable commutes, or the house is in a less than desirable neighborhood.
What Is A Pandemic Home Buyer To Do?
Many suffering from buyer’s remorse may be stuck—at least for a while. Selling a home is expensive, and while still hot, the market is less competitive than it was a few months ago. Someone who bid well over the asking price could be out tens of thousands of dollars if they turn put the home back on the market too quickly.
“If you made a modest down payment, you might not have the equity to get out of that place,” says McBride. It is a tough decision whether to absorb the loss or wait and endure the inconveniences such as a long commute or bath in need of renovation in the interim.
Kecmanovic thinks unhappy homeowners should wait until daily life gets closer to normal before deciding whether to sell or stay in place. She encourages them to test out the commutes and discover things they love about their homes. Acting too quickly could result in even more disappointment.
Sources: grow.com, realtor.com, timeinc.com, zillow.com, clever.com