A Stressful Experience
What’s the most stressful event you’ve had in your life? Applying for college? Going on a job interview? Hosting Thanksgiving dinner for your entire family?
According to a recent survey by Homes.com, buying a home tops all of those events as “the most stressful event in modern life.” One-third of respondents said they were driven to shedding tears at some point during the process. One in ten homebuyers claimed to have buyer’s remorse after their home purchase.
Home buying can be a prolonged and confusing process – but you can reduce the stress with research and realistic expectations at every step.
Know What You Want
It’s easy to fall in love with a home at first sight, but you must look at your purchase with a practical eye.
According to the survey, the average family viewed six homes before making their choice. However, the high rate of buyer’s remorse suggests that many families either made emotional decisions or hadn’t fully thought through what they needed or wanted in a home before buying.
What are your current and near-future requirements for a home? Everything from the number of bedrooms to the morning commute to work should be considered and separated into needs and wants. Also, consider deal-killers – what aspects would make a home unacceptable regardless of the other benefits?
Rank all the features you want in a home in order, so you can objectively compare different homes and determine compromise points. If you find a home with advantages you hadn’t thought of, it’s fine to re-assess – but at least you’ll have a framework for comparison and won’t make an overly emotional decision.
Around 28% of survey respondents were heartbroken when they submitted a contract for a home and didn’t get it. That’s disappointing in any case, but you can reduce the pain if you know other homes exist that meet your criteria.
Know What You Can Afford
Once you’re ready to shop, look for the homes that meet your basic needs. Are they within your price range? Consider that after purchasing their home, 13% of survey respondents thought they overpaid.
Use online mortgage calculators to determine your monthly payments given the down payment you can afford. Run scenarios at different home values and interest rates to find your limits.
The calculators will take into account your current debt-to-income ratio (DTI) – the ratio of your combined monthly debt obligations divided by your gross monthly income. If you haven’t created a budget yet, make one verify that you’ve accounted for all your monthly expenses.
If you don’t know your credit score, check it and review your full credit report for any errors that could be dragging down your score. Keep your credit score as high as possible by always paying bills on time and keeping your overall debt in check relative to your credit limits. A low credit score can potentially disqualify you for a mortgage loan or cause you to pay high-interest rates – severely limiting the number of homes that you can afford.
Know What to Expect
Fear of the unknown increases homebuying stress. Approximately 38% of homebuyers in the survey said the overall home buying process took much longer than expected.
Again, research is the answer. Multiple websites can walk you through the process step-by-step. Online checklists are available for both ends of the process – applying for a mortgage loan and preparing for the closing meeting.
Start by reviewing the basic step-by-step procedures and checklists. Jot down any points you don’t understand and go back for a second run – or discuss the gaps with your chosen lender and real estate agent.
Research local options to find experienced and trustworthy real estate agents. They can help you navigate through the process and calm any fears. Your upfront research will help you understand the jargon and weed out anyone trying to confuse you for his or her own benefit.
Home buying will always induce some stress – but you can minimize the stress by understanding the process and knowing what you will and won’t accept in a home. Do your research before you shop and keep your finances in the best shape possible to expand the number of homes that you can afford.
Only one in five of the Homes.com survey respondents felt confident in searching for their home. With more options to choose from, the knowledge of what you want and can afford, and the proper understanding of the process, you’ll have the confidence to make your home buying experience as smooth as possible.
Avoid buyer’s remorse by sticking to your plan. Don’t be afraid to delay a purchase if the homes you’ve seen don’t meet your baseline needs, or you have to stretch your finances too thinly to afford the home. If necessary, drop back and create a plan for a future home purchase.
It’s hard to limit your emotions regarding the most expensive purchase you’ll likely ever make – but it’s important to do so. Increased stress rarely leads to good decisions.
This article was provided by our partners at MoneyTips.com.
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