After the pandemic, NPR conducted a survey that showed that 66% of millennial homebuyers in 2021 expressed buyer’s remorse.
This was a nationwide survey, and thankfully we’re unaware of an MAJ client that has regret, but nevertheless it’s a striking data point. This little article stuck with us and we want to talk about buyers remorse in today’s newsletter.
What leads to buyer’s remorse? And what can sellers and buyers do to prevent it?
We find that education and expectation-setting are two of the fundamental elements to happy buyers.
Both sellers and buyers play a role in crafting a successful outcome. Our goal is that each sale and purchase leads to pleased sellers and thrilled buyers. But we know that in the worst cases, a regretful buyer can get litigious.
A buyer will have regret when they feel that they bought a house without the sufficient information they needed to feel confident in their purchase. Seller disclosures, general market awareness, a base education about how homes function can all support buyers. In a competitive market where the overwhelming trend is to waive the inspection contingency, it’s incumbent on the seller to provide complete and thorough disclosures and inspections to enable the buyer to feel confident in their decision to purchase. Legally, a seller must disclose any material items that may impact future ownership.*
It’s also up to the buyer to pursue any and all due diligence that they need to satisfy their curiosity and concerns, because seller disclosures can only answer so much. To illustrate:
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If a home is bought in summer, the buyer won’t truly know how that home looks in the fall! How much maintenance is that deciduous tree? What does the light look like in the living room as the sun lowers in the sky? How do traffic patterns shift when kids are back in school?
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If the buyer is unfamiliar with the neighborhood, it’s important to spend time on that block to try to get a full picture of what it’s like to live there. Drive through at night. Take your dog on a walk. Talk to neighbors and grab a cup of coffee at the local coffee shop. Spend more time there than what’s allotted at the open houses.
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Understand that the market is unpredictable. If a buyer purchases a home with the intent to move again in a short timeframe, a correction in the market can make this plan untenable or unwise. Be clear about your goals in home purchasing and outline a contingency plan in case the world shifts and compels you to also shift your plans.
But here’s the truth - even with the most thorough disclosures and inspections, a buyer still won’t know every little thing about a house. And this is when expectation-setting plays a role.
We like to say that if a buyer confidently understands about 90% of a home before making an offer, that’s a pretty good threshold. 100% would be amazing, but the reality of it is that the only person who truly knows 100% is a homeowner. If a prospective buyer expects to know 100%, they will certainly be disappointed once they buy the home, move in, and discover items that were poorly disclosed* or new.
Moreover, homes are not static! They are aging, systems wear over the seasons, and the elements can sneak in over time. As time goes on, homes need maintenance and a buyer that doesn’t anticipate the long-term care of a home can experience regret and frustration when something wears out.
Our top recommendations for battling buyer remorse are to educate yourself to the best of your ability before committing, and understand that even the most thorough disclosures will leave a little to the imagination. It’s all about expecting the unexpected (to a certain degree!). Each buyer will have their own tolerance for the unexpected, so know thyself before committing.
When we work with buyers, we take time to review disclosures together. When there are outstanding questions, we slow down and find the resources our buyers need to find their way. And if the due diligence process leads to a decision to walk away from writing an offer, that is a valid choice if it’s an informed choice.
There is a house for everyone, and a way to be confident and happy with your home purchase.
*Poor disclosures can be a significant liability, but it’s not uncommon for a seller disclosure to be well-intended but incomplete. For instance, a November seller might disclose BART noise but fail to remember 4th of July fireworks…it’s an oversight we do see in the market at times.
