How to avoid buyer’s remorse
Interest rates are at record highs, and once the threat of COVID-19 has passed, it’s reasonable to believe more homes will hit the market. If you’re hoping to buy a home in the near future, here are some ways you can make one of the most important financial decisions of your life without blaming yourself later.
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Do not rush
Rushing to buy a home is never a good idea. If you’ve just moved to a new city and can’t wait to move there, consider corporate housing or other short-term living so you have plenty of time to find the right home. Decide how long you want your commute to last, and create a radius in which to look for a home. Get to know the neighborhoods and schools in this radius.
Ultimately, the surest way to avoid buyer’s remorse is to take their time before committing to a transaction. mortgage. If you’re buying in an area of the country with a scorching housing market and feel compelled to get into a bidding war, you have even more reason to know an area well before you fight for a home.
Conduct a self-assessment
Before you start looking for accommodation, think about the life you want to live. You are going to shell out a large amount of money to pay for your new home, so make sure the investment fits your lifestyle. For example, if you want to walk to your favorite restaurants or be near concert halls and museums, you will probably want to shop in town. If you fancy some quiet and sitting around a patio fireplace, suburban living may be a better choice. The point is: you want your new home to be right for you. Trying to turn yourself into someone you’re not by moving to the wrong part of town is a sure way to regret your purchase.
Focus on the details
If you shop online, try to do it when you are relaxed. Once you come across a home you like, write down how long it’s been on the market, when it last sold (and for how much), how much property taxes are, and how much are the houses that surround it worth. Realtor.com and Zillow.com are among the many websites that offer this information. Some facts, like property taxes and the price of the last sale of a house, are reliable. Property values are an estimate, which means you will need to rely on your real estate agent to verify the information.
If you are a parent, leave the children with someone you trust while you visit the homes. While this is also their home, it’s hard to stay focused on the property when you’re worried they might be disturbing something they shouldn’t.
Imagine it five years later
“Flash” sells. House swimmers know it, home stagers know it and savvy salespeople know it. Flash refers to the decor of the moment. But, like the high pile carpet and avocado green appliances of yesteryear, trends come and go. If you’re buying a house because it’s decorated like a house you saw in a magazine last week, think about what you’ll see in five years. At that time, much of the decor will be outdated and magazines will advertise new styles.
The same goes for features that may impress you at first glance, like hot tubs and theater seating in the basement. While you may still be able to enjoy these things five years from now, are you willing to pay top dollar for something that may lose its appeal and needs to be taken down?
Instead, look at the “bones” of the house – the architectural style and the quality of its construction. While decorating choices come and go, architectural attributes will remain.
Go over it with a fine comb
While lenders – including conventional, VA, and FHA – strongly recommend that buyers have their homes inspected, it is not mandatory. However, saving money by skipping a home inspection can be one of the biggest financial regrets in your life. A good home inspector will check:
- Indoor plumbing
- Electrical system
- Heating and cooling systems
- Roof (if they are certified for roofs), attic and exposed insulation
- Walls and ceilings
- Windows and doors
Home inspectors are generalists, which means they check for obvious problems. If you want to cover all your bases, hire specialized inspectors once the general inspection has been carried out. These inspectors specialize in areas such as radon, structural engineering, asbestos, swimming pools, septic tanks and oil tanks. It’s worth asking the Inspectors General who they would call for a specialist inspection if they bought the home.
If any issues arise during the home inspection, you can ask the seller to fix them before closing or negotiate a lower sale price.
Shop carefully for a loan
When you’re looking to borrow money for something as big as a mortgage or a car loan, creditors expect you to shop. Rather than ringing your credit score every time you apply to a new mortgage company, they give you a window of time during which all mortgage lender credit checks count as one check. Depending on the credit score model used by each lender, you have 14 to 45 days to shop. Just in case, aim to do your mortgage research in 14 days.
The mortgage lender you go with is important. Look at the 0.5% difference on a 30-year mortgage with a loan amount of $ 300,000:
Lender A Lender B
Data source: author’s calculations.
In this case, take the time to shop best interest rate would save you $ 31,611 over the life of the loan. It’s more money to invest for something important, like retirement.
The better you consider your needs and get to know a property before you buy it, the less likely you are to regret the purchase. The extra time and effort required can just save you a bundle.