Parting with a big chunk of money isn’t easy. What is easy is giving in to the tendency to want to beat yourself up after spending it. It’s classic buyer’s remorse, and, while it’s not common, we have seen a few cases of it during our time in real estate.
Buyer’s remorse is more common in buyer’s markets. When there are lots of homes that fit the bill, it’s easy to wonder if you made the right choice. There is actually a name for this phenomenon, “the paradox of choice.” Psychologists claim that as the number of choices increase, so does the chooser’s stress level.
How to Guard Against Buyer’s Remorse
Psychologists at Harvard University conducted a study in 2002 and found that people who are offered a 30-day, money-back-guarantee are less likely to experience buyer’s remorse. “People prefer to make changeable decisions rather than unchangeable decisions,” they write.
Unfortunately, houses don’t come with a money-back guarantee, which makes the decision to purchase one rather unchangeable. The process is full of exit points, however, which may ease your mind when you’re starting to feel remorseful.
These exits are in the contract’s contingencies. You’ll have a chance to bail on the deal if the home doesn’t appraise appropriately, if the home inspection results are unpalatable and at several other points along the way.
Another way to guard against regret is in your negotiations with the seller. Don’t be aggressive or greedy, claims the results of a University College of London study. People that negotiate reasonably tend to feel less remorse than aggressive or greedy negotiators.
Share how you’re feeling with your agent. It often helps just to have someone with whom you can share your ideas, your emotions and your fears.
If all else fails, remember the words of basketball great LeBron James: “I always say, decisions I make, I live with them. There's always ways you can correct them or ways you can do them better. At the end of the day, I live with them.”