Here’s a quick quiz for you: What percentage of millennials regret buying a house?
a. 30%
b. 49%
c. 54%
d. 68%
The answer is d. Astoundingly, more than two-thirds of millennials have home buyer’s remorse.
You might be thinking, why would a real estate company write about people wishing they hadn’t bought a house? It’s because we don’t want anyone buying a house they’ll regret. We’re writing on this issue because you can absolutely prevent home buyer’s remorse — here’s how.
Think long-term.
Many people want to buy a house for one of the following reasons:
- A house is a crucial step in adulthood.
- Buying a house is a good investment.
- I don’t want to rent anymore.
- When having a family, it’s important to have extra space.
- I want my own property, my own space.
Most of these reasons are great reasons to buy a house. However, most of these reasons don’t remind us that a house is a massive investment.
Home buyer’s remorse is the same as regular remorse: we regret how our past decisions have impacted our future. It’s critical to think of a house in the long-term — it’s better to wait on buying a house than to rush into an investment you’re not ready for.
Think big picture.
Owning a home means affording a down payment and monthly mortgage, right?
Not at all. A lack of planning ahead leads to a lot of home buyer’s remorse. You should put at least 1% of your home’s value into savings each year, solely for repairs and annual maintenance. You probably should wait on buying if this feels like a stretch.
If you don’t burn through all that money in a year, consider yourself lucky, and keep saving. Having to suddenly replace your home’s heating or deal with a burst pipe is a lot less intimidating when you’ve put the money away ahead of time.
Don’t put too much down on a down payment.
CNBC reported that about 40% of millennials feel like they didn’t make good financial decisions when buying a house. That’s almost half of all millennial homebuyers.
A big source of home buyer’s remorse came from spending too much on the down payment. Reports showed that one-third of millennials were dipping into their retirement funds to pay for their house. This should be avoided at all costs — and if it can’t, nine times out of 10 you should wait on buying.
While a 20% down payment might seem traditional and best for paying off your house, it’s not the only way to go. FHA loans allow you to put down 10% or less. Conventional loans can be as low as 3% down. Research your options until you feel confident in how you’ll afford your home.
Do what’s right for you.
Are you more interested in traveling and moving around? Do you want to switch jobs or careers in the next year or two? Do you see yourself settling down into a different area than where you are now? Are you worried about managing a property? Would paying for a house feel more sacrificial than rewarding?
Just because your parents, grandparents, or even friends have bought houses does not mean you have to. There’s no timeline to home ownership — you can (and should) wait if you don’t feel ready. And even if you never want to buy a house, that’s OK!
Listen to your gut.
We’ve all been there — you want to buy something, it doesn’t feel *quite* right, but we’re already committed to the idea and don’t want to back down. In the event of a house, you should absolutely back down if something feels off.
Twenty percent of millennials felt home buyer’s remorse when they discovered damages and expensive issues after closing. Order a thorough home inspection, read up on contingencies, hire an attorney or real estate agent to help you through closing, and remember — if this house doesn’t work out, there will be another one.
At RealtyHive, we will always work to help you find the best real estate situation. Whether that means selling your house through a time-limited event, buying your first home, or even getting cash back in both the buying and selling process, we’ve got you covered. See what’s currently on the market, and work with RealtyHive to truly avoid home buyer’s remorse.