Dealing With Buyer's Remorse in the Purchase of a Home
More people than you might imagine feel buyer's remorse during the home buying process.
It is not unusual for buyers to have second thoughts after the contract to purchase
has been signed. Many buyers are concerned that the purchase price was too high, or
the neighborhood is not a good one, or just that they will be unable to make the mortgage
It is certainly understandable that these feelings of regret would begin to creep in
after the home is put under contract. After all, a home is probably the most expensive
purchase you will ever make, and it makes sense to have doubts about whether or not a
particular property is the right decision.
There are a number of things that bring on buyer's remorse, including well meaning but
misguided comments from family members and friends, looking at more houses after you
have signed your contract, unhelpful real estate agents and your own doubts.
Determining when these doubts are valid, and when they just represent nervousness, can
be difficult. One way to tell if you should back out of the contract is to review the
list of needs and wants you prepared when you first started house hunting. Take that list of
"must haves" and "nice to haves" out of the drawer and look it over.
Ask yourself if the property you have agreed to buy satisfies all of your "must haves"
and the most important of your "nice to haves". If it does not, your remorse
may be for good reason.
Also think about the difficulty of finding a better home if you do back out of the
contract on your current one. Be sure to consider the state of the market when making
this decision. Likewise, consider what made the home you purchased stand out in the
first place. Analyzing the original buying decision can give you good insight into the
wisdom of your decision.
There are a number of times when backing out of a real estate deal is a very valid decision.
Some of these good reasons for turning back on the deal include:
A failure to obtain financing
The home appraising at below the contracted selling price.
A home inspection that reveals more needed repairs than you are
willing to make.
Inaccurate property boundary lines.
Undisclosed easements which give other people the right to use
A title search reveals undisclosed liens that will not be satisfied
by the closing date.
Problems with the deed.
Any of these issues are serious concerns, and they must be fully resolved prior to closing
on the property.
It is important to check all state and local laws to find out what your rights are if you
decide to cancel the purchase of the property after the contract has been signed. When it
comes to the purchase of new timeshare units or condos, some states give buyers a right
to cancel their contract if they change their minds after signing a purchase agreement with
the original developer. These laws typically do not apply to resale units.
In addition, some contracts have cancellation clauses, so be sure to ask your agent if
they apply in your case. While it is certainly true that contracts are easier to get
into than out of, it is possible to back out if you change your mind for a valid reason.
When considering backing out on a real estate transition, be sure to consult an attorney
or real estate broker to look for any loopholes in the sales contract, such as documents
that still need to be approved or home inspections that still need to be done. Be sure
to write a letter (or have your attorney prepare a letter) that formally lets the seller
know of any unacceptable conditions in the contract.
If lack of financing is the reason for backing out of the deal, obtain a letter from the
lender stating that upon further inspection of your financial documents you are not qualified
for the purchase. Be prepared to show proof of this disqualification. If the reason is a
low appraisal, be sure to provide documentation of that low appraisal.
When negotiating to get out of the contract, it pays to be as open and upfront with the
seller as possible. Leaving the seller in the dark is always a bad idea. The best
strategy is to discuss the situation honestly and see if the seller is willing to let
you out of the contract. The law says you cannot be forced to purchase the house, but
in many cases the seller is entitled to keep any deposit you have made if you cancel