Going from renting to buying your own house is a huge change.
Becoming a homeowner will afford you the freedom to do whatever you want with your property without fear that your landlord will come and kick you out. Although you still have to pay a monthly due, there is an end to it. Eventually, you will be able to give your home loan back to the lender and never have to worry about it again. With renting, you always have to pay your rent lest you want to be homeless.
That is why buying a house is a dream for many Americans.
Millennials Buying Houses
Millennials are making their dreams of becoming a homeowner a reality.
As of 2018, one in three adults under the age of 35 owns a house. Now that consumers are seeing the best mortgage rates in decades because of the pandemic, more will likely jump the gun and acquire a real estate property of their own in the next couple of months.
A house is a huge investment. Often, the process of applying for a home loan, viewing different listings, negotiating prices, and closing a sale is stressful and tiring. Many first-time buyers are also surprised to find out that they would need more money to buy a house.
Millennial Homeowners Having Buyer’s Regret
It turns out, some are not ready to become a homeowner.
A poll conducted by Bankrate in 2019 found that nearly two-thirds of Millennials, or 63% of respondents between the ages of 23 and 28, regret buying their current home. In comparison, only 25% of Baby Boomers and 35% of Gen Xers experience remorse because of the purchase.
The primary reasons why Millennials regret the decision to buy a house are hidden costs and unexpected maintenance expenses. About a quarter of them were shocked to find out that, in addition to the down payment, there are other fees that had to be paid.
Overall, 18% of respondents said that maintenance and other costs being more expensive than they expected as the reason for their remorse. Around 12% realized too late that the house they purchased was too small for their family or for their lifestyle. Meanwhile, 8% did not like the neighborhood where the house was located.
More than half (56%) of all respondents, ranging from ages 18 and above, do not regret their purchase at all.
Are You Really Ready?
A house is not a purchase that one can return just because they changed their mind or, it turned out, they could not afford after all. Hundreds of thousands of dollars are spent on it and the buyer has no choice but to live in it for years to come.
The buyer should do their due diligence and learn about the entire process, from shopping for mortgages to the potential cost of maintenance, so that they are fully aware of what they will get into. It would be better to back out before contracts are signed and money has been exchanged.
Prepare for Maintenance Costs
The spending does not stop after the sale of a house. The homeowner will have to shell out more money, amounting to hundreds to over a thousand dollars a year, on maintenance alone.
Homeowners who are buying an old home should set aside about 1% to 3% of the purchase price every year to pay for any repairs needed to keep the property in good condition, said HGTV. Homeowners should also learn how to do basic maintenance work to cut the money spent on hiring professionals to do simple tasks.
Other Factors to Consider
Buyers are encouraged to visit the property multiple times before closing a sale. They should view the house, look at pictures, review the floor plan, and inspect every nook and cranny.
They should be aware of any damages that need to be fixed and how much it would cost them to avoid being surprised by unexpected major expenses once they move in.
Buyers should also get to know the neighbors and the entire neighborhood. These factors will affect their enjoyment of the property and overall quality of life.
If the neighbors are rowdy and the walls of the house are thin, or if there are suspicious men roaming around at night, they would not feel comfortable nor safe in their new house. They would not want to stay put for a long time.
Buyer’s remorse is common, but it becomes a huge problem when the purchase that they regret is as expensive as a house. Although there are major perks to becoming a homeowner and many dream of owning a real estate property, it should be a decision considered for months, if not years.