HOME BUYERS REMORSE
A Harris online poll commissioned by Redfin concluded that 32% of American homeowners suffer from Buyer’s Remorse. The survey included 2027 adult home buyers over age 18, who said they would not buy their home again if they had a “do over.” It revealed some interesting data:
89% of Americans who bought or sold a home in the past 10 years have used a real estate agent.
There were regional differences in those regretting the purchase. In the Midwest the percentage was 28%, the West 20%, the Northeast 27% and in the South 25%
The least remorseful age demographic was in the age 65+ group, of which 85% would purchase the house again.
Remorseful women came in at 27%, and people with children at 28% (not about the children).
Income and Education demographics found that people with household incomes exceeding $100,000 were happy with their purchase 86% of the time, while those under that found only 70% were satisfied. College educated people were satisfied 82% of the time, but those with only some college were only pleased 72% of the time
There is nothing shocking about these numbers when in recent years so many were underwater with their mortgages. Many were unable to sell without bringing money to the closing table. They would not have had this problem had they continued to rent or live in a parent’s basement. Nor is it surprising that many buyers projected their dissatisfaction on their agents. Less than 50% enjoyed working with their agent, particularly among first time buyers from age 18 to 34. The National Association of Realtors in the NAR 2013 Member Profile describes the typical member as a 57 year old, white female, who attended college and is a homeowner. It is speculated that the generational gap may explain the inability to form a good relationship, from the perspective of both. Texting and Facebook communication with an agent who might be proficient in email, and differences in lifestyle could derail working together. Some buyers might suggest that the agent pushed them into the deal. That is dangerous for the agent and the brokerage in terms of lawsuits, damaged reputation, and the loss of future business from that client, as well as all of their friends, family and co-workers. “I didn’t put a gun to your head” as a defense will probably not play well with the jury. Agents and brokerages are just as vulnerable to the negative internet comment, review or blog as any business and the whole thing can go viral in a hurry and it can stay on the internet for a very long time if it is not detected and somehow removed.
If a buyer is going to walk away from closing and their earnest money, they are more probably playing the “what if” game. What if I acted too quickly and a better house shows up on the hot sheet next week? What if I paid too much? What if something happens to my job? Doubt creeps in like a dark fog. It is a big decision and indecision is not uncommon. Buyer’s remorse can be avoided by asking these questions.
THE WANTS AND NEEDS LIST
What are the most important items on the list?
What qualities and features in this house distinguish it from the others?
Were there several houses on your short list, or is this a rare find?
If you default on the contract, do you really think a better one will be found?
Since the date you decided this was the place, what has changed about the house?
Is it really a poor choice, or would you feel the same way about any house purchase?
Have you gotten an inspection that backs up your concerns?
THE ETIOLOGY OF BUYERS REMORSE
The first cause of buyer’s remorse would have to be talking with others, especially parents of young buyers who want to bring their experience to the discussion. After all, they are seasoned homebuyers. They mean well, but they also feel it incumbent upon them to play the devil’s advocate, so it's not uncommon for family and friends to question the choice and what was paid for it, especially if it is a first home purchase. But like any information, it needs to be weighed. Do they know the market and current prices since their last purchase of a ranch style house from the 60s that your Dad grudgingly remodeled 14 years ago. Do they live in the same area? Home prices vary from Fort Wayne to Columbia.
Continuing to look at other houses is a large mistake unless there is a good possibility of the contract failing due to the home not appraising or defects found during an inspection or other issues. These are valid reasons for doubt about proceeding to closing. But, what about the earnest money? The conditions of the contract should provide that the earnest money be refunded if:
The buyer cannot get financing.
The house does not appraise at or above the contract sales price.
Home inspections reveal more repair issues than are acceptable.
The property boundary lines are in dispute.
A title search comes back with problems.
The best advice to be offered to the remorseful buyer is ask yourself all of the questions and to talk about it with a well trained and experienced agent. We are here to help.
Walt Smith, Broker
Coldwell Banker Residential Brokerage
803 622 5210