Saturday, January 22, 2011

Buyer’s Remorse - How do I prevent making a bad decision when making anoffer?

How can I help prevent making a bad decision when making an offer on a home to purchase?

Buyer's remorse is an occurrence that happens all too frequently when a home buyer overlooks something when shopping for a home and realizes after the fact what a big difference it can make to their decision. Considering the size of the financial investment that most buyers make when purchasing a home, it is incredibly important to make sure that you overlook nothing and ensure that your dream home truly is a dream before you sign the purchase agreement.

A home buyer needs to completely understand the difference between want and need when it comes to features of your new home. While you may want something in a home that does not necessarily mean you can have it within the budget set for your home purchase. It is important to carefully shop around to prioritize what you want in a home and determine what you actually need.

Focus on the neighborhoods you would prefer to live in. Consider the characteristics you would like to have in the ideal neighborhood. Take it a step further and spend some time driving around in the neighborhood, both during the day and at night, to get an idea of what that neighborhood is really like. Shop the stores, visit the schools and notice what the traffic flow is like during the busiest times of the day.

Determine how much you can comfortably and realistically afford to spend on a home purchase. You must have a realistic idea of what you can afford before you start to search for a home.  In other words, you will not be out looking at mansions if you can only afford a small townhome.  And it is not always a matter of what you can afford.  It may be a matter of what you want to pay for your monthly mortgage payment.  You may be qualified for $1,400 per month for a payment and you do not feel comfortable with a payment of more than $1,000.  You should also allow for other expenses such as maintenance and upkeep. Once you have calculated all of those costs be certain that you will still have enough income left over each month to be comfortable.

When you have found the right home, consult with your Realtor and do your homework prior to making your purchase offer. Consider how much other homes in that neighborhood have sold for recently and then prepare an offer that will allow both you and the seller to gain something you want. Be prepared to negotiate. Almost everything is negotiable when buying a home today, but remember that negotiation is about give and take, so you may need to compromise.

Once your offer is accepted, understand that this is a critical time during which you will need to remain focused. Go ahead and start packing, make arrangements with the movers and schedule utility accounts at the new home while also scheduling shut-off of utilities at your existing residence for the day of your move. Stay in contact with your Realtor and mortgage lender for any last minute changes or issues so they can be handled promptly before they turn into big problems.