Toronto Star article
When buyer’s remorse extends to your home
October 12, 2010
SPECIAL TO YOURHOME.CA
When Pamela Herring bought her first home she didn’t open a bottle of wine to celebrate.
“I regretted [the purchase] the day after I moved in,” she said. “I had a meltdown and hated my home for a few months.”
According to the Toronto Real Estate Board, 13,000 homes were sold in 2009. Bob Pichut, a real estate agent for more than 20 years, says that in his experience, less than 10 per cent of home buyers sell in less than a year after purchase.
“It’s very rare,” said Pichut. “You can get cold feet. There’s a big fear factor when buying a home. The majority are ready, they’ve been saving and budgeting for this.”
If you do decided to sell your home, breaking your mortgage agreement can lead to serious penalties. Your mortgage agreement will explain how the penalty is calculated and is linked to your interest rate, but you may have to pay thousands of dollars.
“Penalties used to be three months of mortgage payments plus the cost of paperwork,” says Pichut. “Now I’ve seen owners losing $12,000 to $15,000 in penalties.”
People get caught up in the excitement of looking at and buying a home. Pichut has seen this more than once. He said, “I’ve said to people, ‘You should really be renting’ but people don’t listen. They want to be proud owners and it’s considered a step down in society to be renting. It feels like they’re looked down upon by friends.”
Herring agrees that hype and excitement can play a role. She said, “I felt ambivalent toward it at first. I wasn’t sure I wanted one yet, but society was telling me I needed to get one. During the actual searching process, I became more excited because it was fun going to houses and looking at them. My realtor made it fun.”
Despite regretting her purchase, Herring didn’t sell – a fairly common response.
“It’s pride,” says Pichut. “I have a friend who bought a house with a lot of problems but he won’t sell it. I think it’s ‘we bought it so we have to stick with it’ attitude.” That and the hope that prices will go up and the house can be sold for a profit.
So how to prevent homebuyer’s remorse? Pichut has a few suggestions, “See if you are emotionally ready to buy and then surround yourself with a strong team that you can trust. Be realistic with your expectations; a lot of people have champagne tastes on a beer budget.”
His other suggestions include having more than one location in mind, sticking to your guns about your budget and getting an agent you can trust.
But if you have bought a home and don’t want to pay penalties, there are ways to learn to like your home.
Herring found support with her family and friends. “My family and friends helped a great deal. My sister told me I could come visit her any time. My parents told me I could stay with them any time I wanted. Everyone invited me over for dinner a lot, knowing how miserable I was. My friends were supportive and told me of their own home buying woes. I didn’t spend much time there if I could help it. I told myself I could always rent it out and move in with my parents again if it got too bad. My dad supported this.”
And in the end, sometimes the situation improves.
Herring said, “I still have relapses. It’s been a year and I like it much better now. I tell myself I can find a roommate if I get too lonely or if I’m mad about the house itself, I tell myself I can renovate or find another in a few years. It’s all negotiating with myself, but the feelings come and go now. It’s getting better … or I’m getting used to it.”