3/23/2009

Homebuyer's Remorse and Does It Go Away?

I'll get straight to the answer: Yes, if you work at it, in about 6 months (for many people). It starts going away after you begin to get used to your new monthly payment, fall out of love with the property and see it through normal clear lenses, and realize that in fact you did look at other houses, but you chose the one you're in. The operatives words here are: "you chose the one you're in", because after all, in California in particular, there are many contingencies, many opportunities to review disclosures and reports and ask questions, review the seller's disclosures and approve or disapprove them, plus have a full contingent 17-day period in which to cancel without losing more than the cost of your physical inspection. (You did get one, right?)

Yet people like to play a little game, and somehow minimize, or even erase, their part in the decision-making, or worse yet, lie to themselves: "The self-interested devil made me do it." Well, we all do a little of that at one time or another, it takes the pain away, but if you're really grown up about yourself, you finally and quickly wake up and stop kidding yourself.

Webster's dictionary defines remorse as: "A gnawing distress arising from a sense of guilt for past wrongs." So how can you minimize this period (because it's bound to happen to one degree or another)?
  • Did you buy this property after you thoughtfully considered your needs and desires, or did you buy it to please someone else?
  • Did you take the time during escrow to really review your documents and ask questions.
  • Did you drive the neighborhood or talk to neighbors?
  • Did you try to get married, throw a debutante party, go abroad for at least two weeks and then come back and work 100 hours a week?
  • At the close of escrow, did you still feel this was the right property for you?
  • Did you review your loan documents and ask your lender questions?
  • Have you ever handled a monthly payment in your current amount, and did you review that amount carefully prior to close?
  • Did you feel that you did enough homework about your purchase, or could you have done more?
  • Did you work out a budget for yourself taking into account your new purchase, i.e., property taxes, homeowner insurance, monthly maintenance and bills.
  • Did you consult with your tax accountant so that you can realize the full benefit of all your federal and state tax deductions, including mortgage interest and property taxes?

So you bought this for yourself, you knew what your monthly payments would be and you believe you did all your homework? One more important thing: It's important to be emotionally ready to own a home, because there is a responsibility that you don't have as a renter. Otherwise, what you have is the common phenomenon known as buyer's remorse--refer back to Webster's definition and the involvement of guilt.

This remorse goes away, usually after you get through your first year and learn about the financial plusses of having bought a property where you may build equity over time, having numerous tax advantages, and knowing you cannot be evicted by a landlord. For a little more perspective, read this New York Times article on homebuyer's remorse.

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