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Buyer's Remorse

I have read some interesting posts on the subject of Buyer's Remorse and this is how I deal with the issue:

I come right out and tell all of my Buyers...usually when we are broaching the subject of writing an offer...that there is something they should know. There is a term called "Buyer's Remorse" which can encompass a wide variety of fears and situations that arise during the course of a "normal" real estate transaction.

I ask them if they are familiar with the term and they usually are not. If they are, they've "heard something about it...but aren't really sure what it means."

I tell them that purchasing property, (a home, land, or investment venture), is a big step and that it is an understandable and serious matter when a person decides to purchase a property. (they usually nod or smile or both), then I explain that it is natural for intelligent people to be hit with the realization that they are embarking on a serious endeavor...no matter how smart of and idea or how good of a choice it may be. (they nod and smile again).

Then, I very light heartedly, yet ARTICULATELY explain to them that they are LIKELY to experience some degree of Buyer's Remorse at SOME TIME during their transaction, (weather it is in the offering stage, the inspection stage, during the middle of a sleepless night, or at the closing).

Then, I tell them that it is quite normal to experience this to a lesser or greater degree and that the way to be sure that it is a natural response, is that the feeling will leave as quickly as it came and that their original perspective and reasoning for purchasing the property in the first place will return.

I can't tell you how many of my clients have told me throughout the years that it was a good thing I warned them about Buyer's Remorse. Some have even called me to tell me, "Lania, I'm having that remorse thingy you told me about...are you sure it's going to go away quickly?" And I have said, "I'm sure. I'll call you tomorrow." The next day I have called and they answer the phone, "Hello! You were right. I'm fine now!"

Sometimes when we're on an inspection or a condition comes in from a lender, I can see it on my buyer's face or hear it in their voice and I say, "Uh, oh...you have it don't you? The Buyer's Remorse!" It almost always brings them to the remembrance of my explanation at offer time and smiles break out on their faces. Remembering and relieved that I told them this would happen.

I think it's a great idea to let people know up front about Buyer's Remorse. It's comforting to know up front and remember that the person handling your transaction sees this season of your transaction as "normal".

Posted by Lania DeMers, Broker Rocky Mountain Realty Co. on 06/03/2007 06:57 PM

Comments (21)

buyer, remorse, jitters, closing, fear, indecisive, colorado springs, colorado, psychology, reaction, normal, investment, transaction, deal breaker, upset

21 Comments on Buyer's Remorse

JUN

2007

Never heard of buyers remorse. Interesting post. I have found reluctance and caution until they sign their offer to purchase and then they get excited and friendly.

I think it's a great practice to talk to your buyers about "buyer's remorse" at the beginning of the game. We haven't had any that resulted in a cancelled contract, but we might start this conversation right after signing on the dotted line.

Hi Judi! I'm glad it's interesting to you...some of that reluctance and caution you're talking about is the normal "salesman" guard that most people have up when they buy. Once they sign the offer to purchase, they get "excited and friendly" because it dawns on them that you're their "man" , (so to speak). You are now an extension and representation of them and their wishes...so they HAVE to get to like you at that point! (At least they should).

Sell LOTS of houses!

Lania M. DeMers

Rocky Mountain Realty Company/www.SpringsInvestor.com

Lania, so much in real estate involves issues that no one takes the time to uncover. Buyer's Remorse (caps) is huge. The way that you handle this is perfect- if they trust you as they should, then when it happens, they've been warned, they look at eachother and say, "Lania told us..." instead of, "We shouldn't do this/how can we get out of it/we can make the inspection/loan/difficult, there's got to be a way out..." Inserting yourself into the picture gives them perspective...GREAT POST!

Thanks Jim and Maria:

Let me know how it works out. I haven't had any cancell because of it before, but I noticed a few years back when I started this practice, it slowed down the number of "jitters calls" I'd get!

Keep on Selling! Lania

Thanks Laurie!

I can tell you are thoughtful of your clients needs just by your response. That's most of our job...communication and relationship building. Sales is just a result of being able to work those gifts!

All of those panic escapes you mentioned,( "We shouldn't do this/how can we get out of it/we can make the inspection/loan/difficult, there's go to be a way out...") are REAL things that people say and think.

Not because they are mean, but because they are fearful and want to have a "safety net". Excuses and escape are not a safety net...they are desperate panic measures. You're absolutely right. They need security that they are doing the right thing by following THEIR OWN original plan to buy and we are there to remind them, in part, that they are rational adults who have decided to invest.

I bet you DO sell lots of houses!!! Lania

Lania- it doesn't surprise me a bit that you understand this. Know that Colorado is one of the very best places to enjoy real estate. That you are intuitive is going to make the difference for you- you'll be the very best of the very best. Congratulations on your amazing career- I'm jealous!

Buyers Remorse usually means that the buyer hasnt prepared a budget, they think they can make that 120o dollar payment, but they havent even thought about the taxes and insuarance and repairs. Hopefully they are comfortable enough with you to admit they need to back down to say 900 and not be "house poor". It is awesome that you can relate to your clients and help them "re-think"

Thanks for an insightful post!

Great post! What an intuitive way to help your buyers stay comfortable with the process and allow them to voice their doubts without fear of how you may view them. I will keep this in mind with the next buyer I'm working with.

Thanks!

Heather

Hopefully, Joe, they hit, "spell check"...

couldn't resist- sorry, Lania.

I am an office manager of a small agency in Maryland and in the last couple weeks we've had 3 buyer's have buyer's remorse. My agents, who had the listings, advised their clients and the buyer's agents advised their clients. Two of the sellers will be persuing specific performance opportunities and all three will lose their deposits. It is a shame when agents and buyer's feel they can just walk away from a legally binding contract without any repercussions. Do we need to have higher earnest money deposits? Will that even deter this?

Interesting post.

It is very common, I usually send out a letter explaining it to them right after the contract is negotiated, then they know it is normal when it occurs.

JUN

2007

GREAT reminder, Lania! It IS A huge purchase and buyer's remorse IS real -- and I bet if you didn't tell them about it they wouldn't realize how normal it is to feel that way, they'd just think they made a big mistake. Nice to know you're there for your clients!

Buyers remorse is real and is not uncommon. I think it is a good idea to bring the subject of buyer's remorse up within the first or second meetin with a client. You can always spin it into a conversation while sorting through homes to show them.

SEP

2007

Great post. I can see how this has helped you overcome if not avoid the buyer's remorse issue while helping the buyers feel comfortable dealing with it openly. In this era of "Dr. Phil", etc. people are likely to try to understand their feelings while trodding through the dark of their real estate transaction and by letting them know to expect this, they should be better able to stay the course. I would add that by thoroughly understanding their financial situation and housing needs, you are going to be in great position to help them through this so they close!!

Sam Thompson, PHH Mortgage Advisor

SEP

2007

It's been my experience that you can almost tell upfront whose going to have it and who isn't. There are some folks out there that are confident and others that will always feel as though they can't make a wise decision.

MAR

2008

I will definitely add a conversation about buyers remorse with future buyer clients. I am in the midst of helping a buyer through some very serious buyers remorse and it has been incredibly difficult to all parties involved. As I continue to field concerns and objections it is becoming obvious that such a conversation at the beginning of our relationship would have proved to be very helpful. From now on, once we get through hellos and our agency discussion, buyers remorse will be the next topic to discuss. Thank you for an interesting post!

MAY

I had never experienced it with clients in my years of real estate until now. I used the predictive technique Lania talks about because I spotted the potential right from the beginning. Yesterday she called with a serious case and we talked for an hour. I kept trying to draw her back to her original vision, but she was pretty adamant about using the inspection to back out of the contract. I advised her that she stood a good chance of losing her earnest money, but that didn't seem to make a dent. She won't be available for the next three days and our deadline is in three days. So I prepared a Notice of Inspection asking for items to be repaired/replaced, but I also prepared a Notice of Inspection terminating the contract. I told her to sit with it, to talk with her colleagues at work about it, and I would talk to her again in three days at which time she could decide to sign either one. We'll see how successful that technique is.

What do you do if the remorse is for legitimate reasons? I told her she should have thought of all these things before we made the offer. She said she only made the offer because when I was explaining the contract to her I said there were opportunities in the contract for her to terminate it. I give up!!

Hi Judith!

I'm so sorry to hear about your buyer. Unfortunately, there are people out there who are just downright flaky. You did tell her that she should have thought about all of those reasons before she offered. People do need to know that they are entering into a legally binding contract. (See the comment above from June Piper-Brandon, CRIS).

Once in a while, we lose one...it can be from anything from a bad inspection to buyer's remorse. Hopefully, you do have a Buyer Agency Agreement in place by now. If I were you, I'd remind her that although she may not be buying THIS house, you do still have a binding contract in force between the two of YOU. That being said, I'd reassure her that you are there for her, but also let her know that she should not enter into a contract with the mindset that she can get out of it. That would be like saying, "Ok, I guess I'll marry this guy because I can always get a divorce if I don't like him later!"

You may be so discouraged that you no longer wish to work with this client. If that is the case, I encourage you to do a referal agreement to another agent instead of ending up with no compensation at all after what you have been through.

Shake it off...there are plenty of great clients out there and busy season is here.

AUG

buying a home is the worst mistake that a person could ever make. we moved into our new home and were robbed within a week. now sleepless nights and surely a divorce will be soon to follow.

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