It’s an age old curse of the sales profession—Buyer’s remorse! It is defined as a “deep and painful regret for a wrongdoing” or a “feeling of uneasiness or anxiety of the conscience caused by regret for doing something wrong”.
Sound familiar? Every time I fall for the latest webinar on how to increase leads 100% by only paying a small “monthly licensing fee” I have regret! Buyer’s remorse sets in. But with real estate Buyer’s it concerns probably the single largest investment they’ll ever make. When I bought my first house I owed the bank close to $40,000. Imagine that! This was back in 1976 and I couldn’t believe I’d put my wife and I in such a horrible mess with this massive debt. We actually owed someone $40,000! And the interest rate was 8.5%! “What was I thinking!?” But today the numbers are a tad higher. And they are relative to the area you work in. We are a “high-cost” area out here on the west coast. Our “Wine-Country” county of Sonoma has a medium home price of $592,000. We are considered a “bargain” for the San Francisco Bay area.
So what are some of your techniques when dealing with Buyer’s remorse? I feel much of it has to do with the Realtor/Agent and perhaps Lender not doing their part in fully educating the consumer. Click Here for a great article on buyer's remorse. They have you recall your list of home wants and desires in order to stave off remorse in the purchase.
Recently an article appeared in our local daily newspaper. It stated teachers making $63,000 per year could only afford a home at $250,000 or below for our “high-cost” area. They used a single teacher who purchased a home NOT for $250,000 but for $425,000. She had a great local from Wells Fargo and was represented by super Realtor-namely me. The reporter never bothered to call me or the Wells loan rep. She had her premise—teachers can only afford a $250,000 home and that was it. She didn’t explain HOW my client managed to get into a $425,000 home. I had 5 Realtors tell me of their buyers, who where buying homes, freak out at the article and change their minds about looking or going through with an escrow just opened.
Did the Realtors/Agents and Lender not do their job or was the Buyer simply looking for a way out? Buyer’s remorse was stirred up by the article or simply gave credence to their regrets as to the purchase. The 5 buyers eventually calmed down as the lender and their Realtors/Agents once again reiterated the tax benefits of home ownership, the super low interest rate available and the promise of home ownership. All 5 were renters and our rents here in Sonoma County have gone up as quickly and as much as the appreciation rate for homes. Reminding a renter what it was like to be at the mercy of a landlord who felt increases every six months was warranted regardless of their income also solidified their belief in home ownership.
So tell us all your tips for warding off the dreaded “Buyer’s Remorse”? Is it massive education as to the costs associated with the purchase? Do you explain the long term view of homeownership from a financial perspective? So share your thoughts with the AR community-- You’ll regret not doing it tomorrow!