The hyper-competitive housing market and rising rates have made the home-buying process even more chaotic, and according to a recent survey by Zillow, 75 percent of recent homebuyers have at least one regret about their new home. We spoke with an expert at Zillow and several real estate experts to discover the most common home-buying regrets. Take note, prospective buyers, understanding these oft-overlooked factors, and getting clear on your priorities before buying can help you feel more secure about your home purchase later on.
Not seeing the bigger picture
It’s a seller’s market, which means that there are more buyers than housing inventory. And this shortage is causing buyers to feel pressured to grab the first home they can find. “According to our research, 38 percent of buyers surveyed wish they had weighed their options more carefully,” Amanda Pendleton, Zillow’s home trends expert tells us. The pressure to buy quickly is understandable. “Pandemic-era buyers have faced unprecedented conditions: fewer homes to choose from and far more competition for the homes that were listed for sale,” she explains. “Inventory fell to a new low, down more than 40 percent compared to pre-pandemic levels, while home values surged nearly 20 percent in 2021.” But this hyper-competitive market can cause buyers to miss the big picture. “The biggest, and most common regret homebuyers have is making an uneducated purchase—not fully understanding what they’re buying or considering the impact it may have on their day-to-day lives,” says Ryan Serhant, founder and CEO of SERHANT., a licensed real estate broker. He says buyers are also not anticipating the future as they’re buying homes. “You have to think about what you’ll need one year from now, five years from now, and make sure you find a home that fits the lifestyle you foresee,” Serhant explains. For example, if you’re a young couple wanting to have children, he says you might want to consider a home with two or three bedrooms, so you can grow your family in that home without having to think about moving. “Buying a home is not just the purchase price, you have to think about the full picture,” he says.
Failing to consider the importance of location
The home’s location is one of the most important factors that you should consider when purchasing a house. “Homebuyers should always weigh the pros and cons of not only the property itself, but the neighborhood and community as well,” Tracey Williams Barnett, an associate broker at District City Living in Washington, D.C., says. When you’re purchasing a property, Barnett says you’re buying a lifestyle. “The home, neighborhood, and community need to complement the way the prospective homebuyer lives, works, and plays, now and for a period of time in the future,” she explains. That’s why Dorothy Schrager, a broker at Coldwell Banker Warburg in New York, recommends making more than one visit. “Go back at night and on the weekend to make sure you get to see the neighborhood at different times during the day and week,” she says. “Also be sure to check out the schools in the area.” You’ll want to do that for two reasons. First, if you have kids, you want to know what type of school they would be attending. Also, you need to know how school traffic affects the neighborhood. For example, is there bumper-to-bumper traffic that will take you 20 minutes to back out of your garage or driveway each morning? These are all things it’ll pay to consider before you sign on the dotted line.
Not getting a home inspection
In this competitive housing market, buyers are looking for numerous ways to make their offers more attractive. However, some of these strategies can backfire. “We found that 40 percent of buyers wish they wouldn’t have waived so many contingencies, like an inspection,” Pendleton says. In fact, a home inspection should be one of the contingencies that you refuse to waive. “This is the part of the process that lets you know what kind of shape the home is actually in, and how much money you will likely be spending to get it to where you want it to be,” explains Anthony Carrino, VP of Design at Welcome Homes, and also known for his HGTV show Kitchen Cousins. Barnett agrees that it is a mistake to waive a property inspection, but notes that it’s not the end-all solution. “Even when a buyer chooses to have a property inspection, issues can arise after the inspection when the buyer has moved in,” she says. She recommends working with a realtor to prioritize the most critical issues when negotiating with the seller’s agent about repairs. “To avoid any regrets as it relates to property inspections, homebuyers should ensure they have a clear understanding of each and every issue,” Barnett recommends. “And if the report is confusing, hire an electrician, plumber, or roofer to get clarity on the issue before going to settlement, so you can have peace of mind and know what you are truly purchasing.”
Not researching mortgage options and rates
Buyers wanting to speed up the home-buying process should not skim over the financial components of the process either. Failing to research mortgage options and rates is a major regret among homebuyers, Kimberly Jay, a broker at Compass in New York, says. For this reason, Jay advises against using the first loan officer you speak with and instead encourages homebuyers to take a more exhaustive approach. “Contact at least three different loan officers and ask what all of your options are,” she says. “You don’t need to get your mortgage from the same bank that issued your pre-approval.” And when you’re shopping around and comparing costs, she recommends asking about the closing costs associated with your purchase too.
Focusing too much on aesthetics
Who doesn’t love a beautiful home? But aesthetics can sometimes distract from what’s really important. According to the Zillow survey, 32 percent of buyers purchased a home that was smaller than they initially planned to buy. “I often find buyers fall in love with the interior decoration or renovation of a home—particularly buyers who do not have confidence in their own ability to manage a renovation,” says Kate Wollman-Mahan, an agent at Coldwell Banker Warburg in New York. She also warns that aesthetics can cause buyers to overlook more fundamental issues, like a kitchen that’s too small for comfort—even if it has been beautifully renovated. “I encourage buyers to focus on the ‘bones’ of the home—the items that cannot be modified, such as the location, size, views, and ceiling heights,” Wollman-Mahan explains. “Cabinets and wall coverings can be modified and, with a good contractor, it doesn’t have to be a terribly painful process.”
Not knowing how much it will cost to reconfigure the home
Some changes to the home can be relatively inexpensive. However, changing the home’s floor plan can get quite expensive. “I always tell clients: when it comes to construction it’s never ‘Can it be done?’ because it’s always doable; the question is ‘How much money and how much time will it take to accomplish what I want?’” Carino says. For reference, Carino explains, HGTV condenses projects into 30 minutes or an hour, and this has given people the idea that they can reconfigure a home in a weekend or a few weeks at the most. “However, these TV shows don’t show how much preparation, planning, time, effort, and expense it takes to get that open floor plan or move a few walls,” he explains. “I highly recommend talking to a general contractor or an architect before your due diligence period ends—and if you don’t have a due diligence period, that’s a whole other problem.”
Not considering maintenance costs
Even if homebuyers don’t plan to purchase a home that needs major renovations, they may fail to understand the cost of upkeep. “In the [Zillow] survey, 32 percent said they regret that their home needed more work or maintenance than expected,” Pendleton says. “Make sure you are aware of yearly costs, such as HOA fees, and remember that taxes and insurance costs only increase each year,” Jay says. Lawn care is another cost, and depending on your home’s size and location, your utilities may increase as well. “Plus, unexpected costs such as leaks, new plumbing, new boiler, a new roof, etc., can surprise buyers, so have savings as a cushion for these costs,” Jay advises.
FOMO
“Fear of missing out—FOMO—can impel a buyer to act, and then experience buyer’s remorse,” warns Gerard Splendore, a broker at Coldwell Banker Warburg in New York. And even with careful research, he says it’s possible to have regrets regarding everything from price to location, to the condition of the property. “Buyers may wonder if something better might have come along if they’d only waited.” FOMO can certainly cause buyers to spend more than they can afford, which can lead to being “house poor,” which means a significant amount of income is spent on mortgage payments and associated expenses. When considering buying a house, try to drown out the outside noise and pressure, focusing solely on your list of priorities. “Compromise, and a grasp on reality, are the most important skills to bring to a purchase along with a careful eye on the bottom line,” he says.
