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Raising A Millionaire: Article of the Week
Home Buying: On Second Thought
Most people have experienced buyer's remorse in some form, whether it's feeling guilty over the price paid for a new pair of shoes or a jab of regret after splurging on some unneeded tech gizmo.

But when it comes to one of the most expensive purchases in a consumer's life, a home, feelings of remorse can be a lot more intense, easily rattling otherwise confident home buyers and causing them to second-guess what they liked about a house in the first place.

Luckily, many local real estate markets today are buyer's markets; there's lots of inventory to look at and often ample time to negotiate on price. Those factors greatly decrease the chances of buyers completely changing their minds -- and wishing they'd gone for a different house -- after the fact.

That said, buyer's remorse often pops up regardless of what the real-estate market is like, especially for first-time buyers. Unless someone is "particularly unemotional" or has gone through the process of buying a home many times, it's very normal to second guess a home-purchase decision.

In fact, a buyer's market can introduce additional feelings of remorse when an interested buyer shops extensively, finds a home of interest but waits too long to make an offer, said psychologist David W. Stewart, a professor of marketing at the University of Southern California. Stewart's area of focus is consumer psychology.

"You might think that buyer's remorse could be prevented if people spent more time shopping ... but there's also a nonbuyer's remorse as well," he said.

Also playing in the background of a home buyer's mind is the news they hear about the health of local housing markets. When they hear that prices are falling and there's an oversupply, that tends to paralyze some people. The news could also cause them to second-guess their recent purchase, fearing that they could have bought for less.

But there are ways to beat buyer's remorse before it sets in, as well as knock down those pangs of regret if they do happen to invade a buyer's psyche. Here are five of them:
  1. Do all the homework
    It's essential for buyers to know what they want -- both in terms of housing needs and the neighborhood. That means being satisfied with such factors as the distance from work and the quality of the schools before settling on a home. The more work they do on that up front, the less likely they are to make a mistake.

    The more buyers shop around, the more educated they will be on a particular market so look around and learn about how far a real estate dollar will stretch in the area. Prospective buyers often pay attention to news stories about the real estate market, but it's important to also be aware of the longer-term trends in the local area.

  2. Get preapproved for a mortgage
    Getting preapproved for a mortgage before house hunting will remove another fear that buyers commonly have before or after committing to a particular property -- that they won't be able to afford the monthly payments.

  3. Call for reinforcements
    If fears start to creep up after the paperwork is finalized, enlist the ears of friends, parents or peers who can reinforce the decision to buy. A realty agent can also help out by reminding a client of why the home was originally a favorite or reassuring the buyer that a good price was secured for the property.

  4. Personalize your new space
    To feel more connected to the new home, make it your own. Paint the walls or change the carpets. Decorate the walls. The changes don't have to be expensive, but if it reflects you and your attitudes, the home will start to feel more like your own.

    The process of individualizing the home will help create a sense of ownership. "You're less likely to feel remorse because it's yours," he said.

  5. Don't dwell on it
    Finally, those who fear they've bought the wrong home need to remember that they made an educated, thoughtful decision when they signed the paperwork. There's also not much they can legally do to get out of it if they change their mind after the contract is finalized.

    Remember, when many markets were peaking, it may have made sense for buyers to worry they were paying too much. Now, that concern has lessened in many places as prices have come down and have begun to stabilize. However, trying to time the market doesn't always make a lot of sense.

    Regret may also dissipate somewhat when an unhappy buyer realizes the alternative -- buying and selling all over again.

Raising A Millionaire: Other Articles

Why Real Estate? - There are so many reasons to own real estate. Here's help to get you going on the road to financial well-being.

Stacking the Odds for Real Estate Success - Why not take advantage of all that real estate has to offer you? Learn how to "stack" the odds of real estate success in your favor.


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