I think most of us who work (or have worked) in real estate know how very easy it is to fall in love with a house, especially for first time home buyers. It happened to me frequently – oh, how I remember that amazing rancher with the wraparound porch on 5 acres in the heart of Northern California’s wine country.
And raise your hand if you’ve never had a client who fell equally in love with a home that lacked all those features he insisted he had to have.
If they buy the home on a whim, or out of lust, what are the chances that when reality hits, these clients won’t blame you for how they’re feeling? Slim to none, most likely.
Help your clients (especially those new to the process) avoid buyers’ remorse by counseling them well during the buyers’ consultation.
Why are you buying a home?
Seems a simple enough question, right? But the reality is that many first time home buyers haven’t a clue why they’re buying, other than that they want to own a home.
What do they hope to achieve with home ownership? Is it a financial goal or something less tangible, such as permanence for their kids or a place to live out retirement? Ensure that they come up with a clear reason for why they are buying.
Make it a homework assignment by giving them a worksheet to fill out as they mull over their reasons. If, in the end, they’re buying because all of their friends are, you’ve got a problem.
Once you know their “why,” you can use it to help keep them on track during the house hunting process.
What, exactly, do you want/need in a home?
The wish list is so important to a buyers’ agent. Without one, you’re guessing about which homes suit their needs. That’s why we often see people complaining about their agent who showed them homes that didn’t fit what they wanted.
Ask for a list from each member of the buyers’ family whose wishes will impact the buying decision.
Sit with them as they prioritize the list – you’d be surprised what you’ll learn during this session. As they haggle among one another about the priorities, listen carefully. The more you can help them sort this part of the process, the quicker (hopefully) the rest of it will go.
Suggest that they focus on their lifestyle when compiling their lists. If they don’t like spending time gardening, they don’t need a home with a lawn, despite how pretty it might be.
Caution them that they’ll not likely find a home that includes all of the must-haves, but you’ll do your best to get them close.
First time home buyers need to know exactly how much they can comfortably pay every month
When you get to the mortgage part of the home buying process, caution them that they don’t have to buy a home priced at the lender’s max loan pre-approval.
Financial experts are sticking by the old “don’t spend more than 30 percent of your monthly income on housing” rule, so that’s a good place to start.
If they have future goals, such as starting a family or traveling, buying at the top of the approval range, with the costs of home ownership tossed in, may make them too “house poor” to meet them.
How’s the market?
As your tenure grows in the real estate industry, you’ll find that typically the first question someone asks you after “And what do you do for a living?” is “How’s the market?”
Most don’t really care, they’re just being polite. But your first time home buyers better care because if they fall in love with a home in a hot market, they’ll have lots of other suitors to compete with.
A buyers’ market brings perils for first time home buyers with house lust as well. The temptation to “get that house” at any cost is very real, and inexperienced buyers are perfectly willing to go soft on demands in a market that favors them.
Counseling your first-time buyers about the current market, the economics of the housing market and how quickly it can change, are tasks that can be accomplished during the consultation.
It’s the little things
Even experienced buyers allow the fog of lust for a home blind them to the little details that may, in the end, cause them to regret the purchase.
One of the details they frequently overlook during the rush to win a particular home is the HOA. Sure, you can caution them to read every word on every page of the documents or to hire an attorney to explain it all.
But the reality is that, at this point, they’re too excited to worry about it.
True story: Sue volunteers as a foster for a local pet rescue. At any given time, she has a minimum of five dogs and two or three cats wandering around her home.
She fell in love with a house because of the backyard – it was the perfect size to erect a kennel so her charges could get out of the house and take in some fresh air.
It wasn’t until one of the neighbors complained about the barking that the HOA stepped in to remind her that the CC&Rs limit homeowners to keeping only two pets on the property.
The heat of the market at the time panicked her and when she found THE house, she threw common sense to the wind, demanded her agent submit an offer on the spot and signed away her due diligence.
She could blame her agent for this, but she won’t if the agent cautioned her along the way.
Many first time home buyers wear blinders during the purchase process. By not considering if the home will cost way more than is comfortable or that it has lousy neighbors, an overbearing HOA or an inconvenient location (all things that can’t be changed), is a prescription for remorse.