Millennials aren’t really glad after procuring their home. Want to know why? It is because almost 70% of millennials regret buying their homes after moving in. That’s weird, right?
But it’s so true…
According to a recent survey of over 600 millennials (age 21-34) conducted by Bank of the West, about four in 10 millennials are already homeowners. However, it turns out that about 68-70 percent of them experience the buyer’s remorse- almost double the amount used in buying their homes (such big feeling of regret).
You are probably thinking: “They got the house of their choice, what’s the regret in that? Read on to find out. In fact we are going to reveal to you results from the new studies that reveal why almost 70% of millennials regret buying their homes.
Here are some of the biggest areas of remorse felt by millennials:
- Overspending on the down payment
Approximately, (4) four in ten (10) felt they made poor financial choices when it came to buying their home. The biggest problem seems to revolve around the down payment. The survey showed that one in three millennials ripped open their retirement accounts to pay for their homes-Bailey calls this wildfire trend “alarming”.
“Borrowing from your retirement may make sense in special circumstances, but it’s definitely not a recommendation,” Bailey tells CNBC Make It.
To avoid making the mistake of “overspending” and “dipping your hands into your retirement account”, think about what you can afford as a monthly payment, and don’t forget to include insurance and taxes in your calculations. A chief economist from Realtor.com named Daniel said so to CNBC Make it.
I advise that you use price alerts and filters on home search sites to make sure you’re not shopping for a home above your budget. In fact, Hale says “Don’t fall in love with something that’s already out of your price range”
- Underestimating ongoing costs
A lot of young people do not know that when you buy a new home, the expenses don’t stop once you move in.
Globally, millennials understand basic costs, such as electric and heating bills, but Bailey chipped in that you must also consider how much money and time it could take to deal with leaky faucet, mow the lawn or clean the house.
Hale stressed on this point when she said ““When you’re a homeowner, you can’t call your landlord to fix things, so you want to make sure you have a little extra cash in the bank,”
The transition from RENTER to HOMEOWNER is a big one and shouldn’t’ be rushed, so make sure you find some time to learn about costs especially the maintenance cost associated with potential homes- you don’t want to go bankrupt now, do you? I guess not!
- Settling for something that’s not quite right
Finding and buying the right fit (home) is as important as having the right budget when it comes to owning a home. The recent survey found that about half of millennials who participated in the research at some point had regrets about the home itself.
What could have caused this? You bought the home now, didn’t you?
So, why the cause for regrets?
Well, one in five said they were frustrated by the varieties of damages they found after moving in, while others said they discovered the house didn’t end up working well for them and their family.
Experts have seen this as a major challenge to lots of new home owners and in their race to proffer a solution advised that you should perform a home inspection before finalizing the sale. “Especially if you’re a first-time buyer or new to home ownership, you may not even know what to look for, so you definitely want to have the expert on your side,” Hale says.
Doing this also helps nail down what you really need in a home. Make a list of your must-haves (like a to-do-list but this time, it’s a must-have-list) before you start looking for a house to purchase and know what you’re willing to compromise on. The housing market is a very competitive one, so chances are; you’re going to have to make compromises at certain points.
A survey conducted by the National Association of Realtors has shown that about two-thirds of home buyers reported compromising on some sort of home characteristic.
“The more targeted your search is, the more chance you won’t waste your time or get distracted by homes that ultimately aren’t a good fit for you.” Hale says. So, follow this advice, and you can avoid purchasing a home that you regret.
Now that you are armed with this information, do you still intend to buy a house? Are you a first timer? Or a person looking to avoid nurturing regrets?
Remember the three lessons we talked about: Avoid Overspending on the down payment, never underestimate ongoing costs. Flee the temptation of settling for something that’s not quite right and you just escaped the problem of why almost 70% of millennials regret buying their homes.