The real estate boom of the late 1990s and early 2000s brought on a seemingly unrelenting level of enthusiasm for buying properties. Bidding wars between prospective buyers were common. Sellers and their agents were happy to watch it happen, as the price for their listings went up and up. For the most part, the purchasers had few regrets about going over list price to secure a coveted home. They expected to be able to turn around and sell it to someone else at an even higher price.
Tempering those expectations and educating the seller can help offset any regrets he or she has about a home not bringing in the value that was expected when it was purchased, said Ryan. Sellers need to be realistic about pricing a home properly.
“It’s important to price the home appropriately for the market and the competition so that it will sell within a reasonable amount of time,” Ryan said. “Let them know that often a buyer will bring in a low offer to begin with. This is typical, and they shouldn’t be offended by what is initially a low offer. The great news is that there is a buyer that has selected their home, and now they have started the negotiation process. It’s the job of the listing agent to work with the selling agent to bring both sides together, if at all possible.”
The market crash put an end to those heady days in most markets. However, the end of the recession and the slow but steady recovery of the housing market have created new enthusiasm. Credit has loosened up, the stock of foreclosures has been reduced and people are once again feeling confident enough to consider investing in a home. Bidding wars are again popping up.
A recent survey by Chase Research found that enthusiasm for buying a home is up, with 62 percent of respondents saying that this year is better than last for making a purchase. That excitement comes with some trepidation. About 70 percent worry that they may have missed their chance to get the best price on a home, and 56 percent fear they won’t be able to find a house in a quality neighborhood that is within their budget. About 75 percent worry about being outbid by others.
A bidding war is a fantastic opportunity for a seller, but buyers might get cold feet once the dust settles and they realize how much they’re about to commit to a property. Maybe it isn’t too much over the list price and they stayed within their intended boundaries. They can live with paying over list. But if they’ve gone far above what they feel comfortable spending or past what they think the home is worth, buyer’s remorse sets in and they begin to regret the deal.
“It’s pretty hard to recapture that buyer,” Fay-Hart said. “Usually, you let that buyer go and sell the house again. I do feel like there’s a buyer for every house. As agents, we’re caregivers. We’re constantly trying to take care of people and take care of circumstances. The fact is, some circumstances are not meant to be. A buyer is often better suited to be shown another house that they fall in love with. I don’t ever want to sell a house to anybody that I’m not absolutely sure they’re going to love every single day.”
A 2014 survey conducted by Harris Interactive for Redfin revealed that approximately 25 percent of homeowners regret purchasing their current home. Regionally, 28 percent of homeowners in the Midwest expressed remorse, compared with 27 percent in the Northeast, 25 percent in the South and 20 percent in the West. Demographically, older Americans were less likely to feel buyer’s remorse than younger buyers. Of those individuals age 65 and older, 85 percent said that they would buy the same home again. Among younger homeowners, only 72 percent said that they would make the same purchase.
Income and education also played a role, as 86 percent of people with an annual household income of more than $100,000 said that they were satisfied with their home, compared with 70 percent of those in households that earned less. About 82 percent of those with a college degree or higher said that they were happy with their home, while 72 percent of those with at most a college education had that opinion.
A 2013 survey by Trulia took a deeper look at some of the reasons why some people regretted buying their home. Trulia talked with more than 2,000 homeowners and found that 52 percent have some regret about their home or the process of purchasing it. Of those with regrets, the largest number – about 34 percent – wished that they had bought a bigger home. Twenty-seven percent said they regretted not doing more remodeling after their purchase, 5 percent wished they had done less remodeling and 22 percent wished they had known more about the property before closing the deal. Eleven percent regretted not buying a smaller home.
Financial concerns constituted a substantial portion of the responses, with 18 percent regretting that they hadn’t made a larger down payment and 16 percent wishing they were more financially secure before they bought their home. Fourteen percent would rather have shopped around for a better mortgage, 12 percent would have borrowed less against their home and another 12 percent wished they had understood the costs of homeownership better beforehand. Two percent would have borrowed more against their property. Agents also showed up in the survey, with 14 percent of those surveyed wishing they had worked with another agent.