Combat Buyer's Remorse
So you did your research, you looked at model homes, you investigated neighborhoods and school districts, you made an offer, and—voila!—you’re a homeowner! This should be one of the happiest days of your life…so why do you feel like driving off a cliff ala Thelma and Louise?
Well, it’s called buyer’s remorse, and it’s as universal as the common cold. Statistics are on your side: 74 percent of first-time buyers say they like their new home better than their previous residence, and 67 percent of repeat buyers like theirs better.
And anyway, you legally have three days to change your mind and cancel the contract. Right?
Wrong! No such law exists. The only way you can cancel the contract is if cancellation rights are written in the contract. Generally, a buyer can cancel only for failure to qualify for mortgage financing after a diligent and good-faith effort, or based on the reasonable disapproval of some aspect of the home. What constitutes “reasonable disapproval of some aspect of the home”? Read on and find out.
- Notice of violations of building, zoning, fire or health laws.
- Flood hazard designation (resulting in the cost of flood hazard insurance).
- The title commitment report from the title company (which may indicate liens, unpaid taxes and easements restricting the use of the property).
- The Seller's Property Disclosure Statement.
- Homeowners association disclosures (such as the restrictions contained in your community's covenants, conditions and restrictions or other governing documents).
- Cost to repair any septic or other waste-disposal system.
- Swimming-pool-barrier law compliance.
- Lead-based paint information (for homes constructed prior to 1978).
- Termite- or wood-infestation reports.
- Damage to the home exceeding 10 percent of the purchase price (by fire, flood, earthquake or act of God).
- Information obtained from the home inspection and investigation (which may reveal adverse property conditions).
The best way to prevent (or at least mitigate) buyer’s remorse is to prepare yourself in advance, long before you ever sign on the dotted line. When buyer’s remorse hits, as it surely will, remind yourself why you wanted to buy a house in the first place. Now pop open the bubbly and congratulate yourself.