13 Reasons First-Time Homebuyers May Regret Their Big Purchase

Compared to previous generations, millennials are delaying many life milestones, including buying a home. Those who have taken the plunge are already feeling the pangs of buyer’s remorse: A survey by Bank of the West found that nearly 70% of millennial homeowners regret their purchase.

Survey respondents cited overspending on the down payment, underestimating ongoing costs and settling for a home that wasn’t quite right as the major reasons for this regret. The experts at Forbes Real Estate Council agree that these mistakes, among others, are common among first-time homebuyers, and often lead to dissatisfaction with their purchase. According to 13 members, here’s why some homebuyers wind up in such regretful situations.

1. They Focused On Investing, Not Living

Too many people look at their home as an investment and make their purchase decision on that basis. If they instead focused on finding a place they would truly love to live for the next 10 years or more, they’d be far happier, and still enjoy the two best benefits of home ownership: not worrying about being asked to leave, and using a 30-year fixed mortgage to never have a rent increase. – Sean O’ToolePropertyRadar

2. They’d Rather Have Experiences Over Mortgages

Millennials have different priorities than their parents and grandparents. Home ownership was once the ultimate symbol of achievement, but now that people are getting married later and delaying having children, putting down roots is not as much a priority. Younger generations would rather spend extra cash on experiences, not mortgages. The key is finding a situation that allows for both. – Elizabeth Ann Stribling-KivlanStribling & Associates

3. They Didn’t Know How The Process Works

I think most people buy a house without knowing what they are doing. They don’t know how the loan works, what values are or the expenses they will have. They trust the agent, the lender and the title company. If someone learns what is involved in buying a house, they can get a good deal and make a great investment, instead of just going with the flow. – Mark FergusonInvestFourMore

4. They Bought Out Of FOMO

I believe millennials are experiencing FOMO (fear of missing out) and reacting to that when spending their money on a mortgage payment. Adjusting to a new budget, especially after draining your bank account of the savings used for your down payment, doesn’t feel like fun. In the end, investing in property will pay off, so I believe the FOMO is only a temporary buyer’s remorse. – Beatrice de JongOpen Listings (YC W15)

5. They Didn’t Run The Numbers Before They Bought

Purchasing and maintaining a home can be more expensive than expected. Many first-time buyers don’t take into account all of the expenses involved in maintaining a home once it’s purchased. Prospective buyers should estimate all costs on a monthly basis prior to moving in, and then practice living with that budget to make sure that you can afford the property you want to purchase. – Lisa FettnerReferralExchange

6. They Were Looking For Instant Results

In this day and age, some buyers expect instant returns on their home purchase. They check their home’s Zestimate on a daily basis and continue to scan the MLS for comparable homes for sale or recently sold to help justify their purchase. The key is to stop looking at your home like a short-term stock, but something tangible that you can enjoy and reap the long-term benefits of. – Brad LeClimb Real Estate

7. They Underestimated The Work Involved

Home ownership is not easy; it requires work. Maintenance, upkeep, taxes and cost of ownership all are important factors. Millennials, who are used to a fast-paced, always-plugged-in lifestyle will likely have a better experience buying something that is new and turnkey, and less likely to need repairs and constant attention that older homes may require. Less work equates to more enjoyment. – Ridaa MuradBREAKFORM | RE

8. They Didn’t Do Their Homework

I advise first-time buyers to carefully choose their property online to select a few choices and write a pros and cons list to determine the best possible purchase candidate. Buyers shouldn’t borrow money for a down payment, and should budget monthly carrying costs and select the best possible property. Use a property inspector and do the punch list inspection with an additional walkthrough before closing. – Elliot BogodBroadway Realty

9. They Felt Tied Down To One Location After Buying

Millennials move often. We live in a world that is open to many opportunities and I’d assume that millennials feel very tied down when owning a property. I’m on my third property at 28 years old, and I wish I would have understood my finances better when applying for the first mortgage. Secondly, I would have studied homebuying education courses before buying. – Joshua FraserData Nerds

10. The Home Didn’t Fit Their Lifestyle

Buyer’s remorse can be the result of a bad fit. Some regret buying too small for their lifestyle or too far away from their work, friends and family. Still, others say too much home, financially speaking, forced them to give up dining out or travel to pay for it. It’s important to understand your wants and needs as well as what you can afford, then look with an agent who understands your needs. – Blake PlumleyCapital Pursuits LLC

11. They Didn’t Have Sufficient Education From An Agent

The millennial generation is able to more easily access information, but it can often be bad information. They see people “do it themselves” all over TV and the internet. The reality of those TV homebuying experiences is not brought to light in 30 minutes or less. The job of an agent is to educate people about real estate transactions and then help them gather information to make their best decisions. – Michelle AmesHorsePower Team Texas/Independent Realty

12. They Made One Or More Common Homebuying Mistakes

After the tax benefits, think twice if you can rent for less than the cost of buying. Buy where you want to live, and do not bank on appreciation. Put down at least 20% to have a cushion in case the market goes down, and don’t be “house poor.” Buy what you feel comfortable paying for. Make sure to budget for renovations and get your own appraisal. – Holly WilliamsMQ Ventures, LLC 

13. It Didn’t “Feel Like Home”

A common reason for regret when buying a first home is not finding the desired “feeling of home.” Making a house a home can take a lot of physical work, but more than that. It’s about your neighborhood and the community created within it. There should be a sense of pride in where they live. That intangible offers great value to a house — or anywhere you choose to live — and helps make it a home. – Benjamin PleatDoorbell Communities

Source

13 Evergreen Real Estate Tips That Hold True In Any Market

Anyone who’s ever purchased or sold property knows the real estate industry is a fickle one. Changing demographic makeups, economic conditions, interest rates and other factors play a role in how “good” the market is for a buyer or seller, and in a few short years, prices in any given area can dramatically shift.

Despite the ebbs and flows of local and national real estate markets, there are certain things about the homebuying and selling process that remain constant. We asked a panel of Forbes Real Estate Council members to share their evergreen tips for prospective buyers and sellers that hold true regardless of market conditions. Here is what they had to say:

1. Always Conduct Thorough Research On The Current Market 

Although real estate values fluctuate due to local supply/demand dynamics and broader national economic considerations, it’s important to remember that properties always sell for no more or less than what the market will bear at that time. Whether buying or selling, do your research, plot your data points, use a variety of resources so that you’re confident in your list or offer price. – Garratt HasenstabThe Mountain Life Companies™

2. Don’t Reject Low-Priced Offers Without Negotiating

Selling your home can feel like giving up something you love, so a low-priced offer can leave sellers feeling insulted. Homebuyers base their offer price largely on their own affordability, but will consider raising it if the location is just right or if there is value in renovations already done. Stay open to negotiations and working with the buyer rather than turning down a low-priced offer. – Beatrice de JongOpen Listings (YC W15)

3. Buy Whenever You Can

There’s never a wrong time to buy. There is only a wrong time to sell. If you look at real estate trends over the last century, prices go up and down and we have booms and busts. The buyers who win are the ones willing to ride the wave, see a purchase through the cycle. Buy when you can, and hold till the sale is profitable. – Courtney PoulosACME Real Estate

4. Get Into The Rental Market Where It Makes Sense 

People will need shelter for the rest of their lives. With the life expectancy what it is here in the in the U.S., that’s a lot of rent to be paid. Buy what you need now and do it in an area where the population is on a rising and sustainable course. – Michael J. PolkPolk Properties

5. Factor In The Fees

In real estate, there are middlemen and a lot of them — the escrow company, the title company, the brokers, the lender, etc. Each one of them is taking a drop from the well. While these fees will all likely go down, they aren’t ever going away and buyers and sellers need to accept that. – Ridaa MuradBREAKFORM | RE

6. Buy A Home To Secure Personal Rent Control

Although the real estate market fluctuates over time, there’s one thing would-be first-time homeowners often overlook. Yes, there are tax advantages. Yes, you paint the walls any color you want. Yes, you build financial equity. But you also have a built-in rent control. With a fixed-rate mortgage, you’ll know what your house payment will be for the next 30 years — not so when you’re a renter. – Eileen LacerteHawaii Beach and Golf Properties

7. Always Invest Based On Location

Regardless of the interest rate or transaction environment, good locations with strong demand and access to transportation infrastructure will continue to outperform in the long run. Location is certainly the evergreen factor telling you where to invest. Interest rates and transaction volumes are better indicators of when to invest. – Marc RutzenEnodo Inc

8. Find Trustworthy Partners In The Real Estate Process

In an industry that is heavily commission-based, it is very important to find and work with trustworthy and genuine individuals who will have your best interest at heart over their own pocket. – Engelo RumoraList’n Sell Realty

9. Keep Your Home’s Condition Pristine If You’re Looking To Sell

Well-maintained houses always sell faster, even in a slow real estate market. Buyers appreciate houses that look move-in ready and are updated versus those that need a lot of work. In a hot real estate market, most houses sell quickly. But during a cooler market period, buyers can get very picky, so it will be the nicer ones that continue to sell. – Jeremy BrandtWe Buy Houses®

10. Be Selective And Don’t Be Afraid To Walk Away

The old real estate adage is true: You make your money when you buy, not when you sell. By being selective about your real estate purchases and using larger amounts of cash in the transactions, you insulate yourself from the ebbs and flows of the market. Deals don’t always work, so do not be afraid to step away. Sometimes the best investment to protect principal is no investment at all. – Blake PlumleyCapital Pursuits LLC

11. Approach Negotiations From A Collaborative, Not Competitive, Standpoint

It’s a mistake to go into real estate negotiations thinking that the other side is your adversary and to be fixated on a specific price. The goal should always be working together to come to an agreement that satisfies both parties. Digging in your heals can sabotage a negotiation. Take a step back and put yourself in their shoes. What’s a win-win for everyone? – Brad LeClimb Real Estate

12. Find An Experienced Local Real Estate Agent

The internet has changed real estate forever. Home sellers and buyers can get more information about real estate than ever. But what they can’t get online and can only get from a local real estate agent, is that insider knowledge. That local “go-to” agent who is a neighborhood expert knows things about the homes and the community you just can’t Google. Their value will never change. – Lane Hornungzavvie

13. Remember That A Home’s True Value Is Determined By The Buyer

No matter what the market conditions are, one aspect always remains the same — the true market value of a home is only equal to what a buyer is willing to pay. Just because a seller believes their home is worth a certain amount of money, it does not mean that the ask will be equal to what a buyer believes to be an appropriate “bid” price. – Matt PettinelliCapGrow Partners LLC

Source

15 Dos And Don’ts Of Property Maintenance Homeowners Should Be Aware Of

Post written by

Forbes Real Estate Council

Many homeowners take great efforts and spend time to renovate their homes to provide that personal touch. While there is nothing wrong with making upgrades to enhance the appearance of a property, the next buyer may not appreciate them as much as you do. You may think that when it’s time to sell you’ll get back every penny you stuck into your remodel, whereas a new buyer just sees the improvements they will have to make in order to make a home their own.

Fifteen members of Forbes Real Estate Council share some of the most common dos and don’ts of property maintenance that homeowners should be aware of to make sure they get a good deal when they decide to sell.

1. Don’t Overcustomize

I painted the walls of my first condo tangerine orange. When I put it on the market, I didn’t understand why it didn’t sell quickly! Now, as a real estate pro, I understand that overcustomization is a deal-killer for resale. Buyers want the experience of enjoying a home’s potential — you must remove crazy wallpaper, overly artistic bathroom tiles and odd/unusual fixtures you’ve installed over time. –Courtney Poulos, ACME Real Estate

2. Always Consider The Costs

Most homeowners fail to consider the cost when making repairs or keeping up their house. The main one I’ve seen recently is the maintenance of the landscaping. The drought in southern California has encouraged people to not water their yard. Less water is good, but over time the landscaping can die. If the property has no landscaping it discourages buyers who see it as a lot of work or expense. – Jeff Maas, National Realty Group

3. Think Like The Next Buyer

Preventative maintenance ignored throughout the years can create costly issues and challenges for homeowners when the time comes to sell their home. Make sure to keep up on HVAC, plumbing and roofing maintenance, especially. Also, updating with a different style in every room can create a very disjointed feel in the home and turn away buyers. Keep any light upgrades tasteful and cohesive. –Tracy Royce, Royce of Real Estate

4. Concentrate On The “Bones” Of The Property

When the time comes to sell and the buyer performs an inspection, your big ticket items are the bones (plumbing, roof, structural, etc.), not the cosmetics. They’ll probably want to choose their own paint and carpet anyway, and high-ticket repairs could scare them off. Keep up the maintenance on the structural part of the home before the cosmetics. – Alex Hemani, ALNA Companies

5. Use Neutral, Classic Designs

Upgrades should be for the purpose you are creating for the property. If you are going to sell it, keep it to neutral, classic designs rather than trendy designs. Trends typically last two to four years. Keep that time frame in mind when making upgrades. – Susan Leger Ferraro, Peace, Love, Happiness Real Estate

6. Document All Improvements

We’re great at keeping every maintenance slip for our cars knowing that when we sell it or trade it in, those records are gold for firming up its resale price and reducing buyer haggling. Yet for our homes, we fall short. When did we replace the washer and dryer? The stainless steel appliances? Five years ago or longer? The hot water heater is how old? Bad data can cost a seller a lot of dough. – Kevin Hawkins, WAV Group, Inc.

7. Renovate To Fit The Neighborhood

When renovating a property, you need to keep in mind what fits in the neighborhood. You might love your 2,000-square-foot addition, but if your home is overbuilt, it might be hard to sell. Appliances, paint color and landscaping can all impact resale value. If you do want to build to your specific tastes, just recognize that you might have to “remodel your remodel” prior to listing it. – Lisa Fettner,ReferralExchange

8. Know Your Audience

Often, homeowners make upgrades that are too idiosyncratic to themselves and don’t resonate with the buying audience. My recommendation has been to look at home improvement and interior design-centered publications to see what is most popular. Buyers like unique homes, but striking the balance between market forces and individual character is essential when it comes time to sell. – Ari Afshar,Compass

9. Don’t Overimprove Your Home

Some homeowners move into their new home and believe they are decorators or architects. The weekend warrior of home improvement can make terrible mistakes to their homes by not going to trusted sources and getting good advice. A great source is the agent they purchased through. Getting an outside opinion is regularly free and very important prior to upgrading or adding to your property investment. – Rita Santamaria, Champions School of Real Estate

10. Do Regular Inspections

I’m a bit surprised this isn’t a more common practice, but I always encourage my clients to do a property inspection every three to five years, depending on the age of the home. In our area, it’s common to do inspections before selling your home. But by doing inspections every few years, you can stay on top of ongoing maintenance of your home and any potential repairs needed. – Brad Le, Climb Real Estate

11. Stay Within The 10% Margin

Unless you plan on living in your current house until you pass to the other side, stop upgrading immediately if you have exceeded 10% of your original purchase price in upgrades. Maintenance is mandatory and having a home warranty plan in place to cover repairs will pay for itself over time. Choose upgrades that are less expensive. Following this plan will almost guarantee a profit when you do finally decide to sell. – Angela Yaun, Day Realty Group

12. Leave Yourself A Buffer

The biggest problem that a lot of landlords and homeowners have is they fail to leave themselves a buffer. In other words, all the income the property generates is immediately spent on personal expenses instead of setting aside a portion for regular general upkeep of the property. Instead of spending that money, you need to put money toward fixing the property every month and getting it ready to sell. – Engelo Rumora, List’n Sell Realty

13. Clean House

At the end of the day, the largest turn-off to buyers is a dirty, cluttered home. Remove everything from your home that’s not needed daily, and clean from top to bottom. Buyers stop looking at a home the second they are distracted by dirt and clutter. Cleaning, organizing and decluttering are all free ways to improve a home’s marketability and increase the odds buyers will overlook the need for updates. – Coni Dean, Venture Realty & Investments

14. Invest In Visible Improvements

Don’t put your money into branded expansive decorations and furniture. Don’t wire your property with boomboxes and subwoofers. Investors should put money into visible improvements and those that make a property appraise well. Kitchen, flooring, new windows, new bathrooms, tile, marble and staging of the residence are good ways to improve value. – Elliot Bogod, Broadway Realty

15. Do It Now

Many homeowners take a “we’ll get around to it later” stance on exterior maintenance, and that is one of the most costly mistakes I regularly see — either coming up when it is time to sell and prep the house or on an inspection. Also, regularly servicing your HVAC system can save tons of money down the line. – Megan Jumago-Simpson, Keller Williams Realty Portland Premiere

Source

13 Ways Buyers Can Step Up Their Game When Buying A House

Post written by

Forbes Real Estate Council

Successful executives in the real estate industry from Forbes Real Estate Council share firsthand tips & insights.

The homebuying process can be scary for a lot of people. After all, it’s a big purchase and there is a lot of information floating around about what to do, when and why. Few first-time homebuyers are truly prepared for the process, but it doesn’t have to be that way. We asked 13 real estate experts from the Forbes Real Estate Council to fill us in on the common pitfalls of homebuying and how buyers can strengthen their position and seal the deal on their future home.

1. Homebuying Is Not What You See On Television

In a hot market, buyers are frequently not prepared to do what it takes to win: act quickly and decisively and present a strong offer at the beginning. Too many buyers are watching too much HGTV and think they “know better.” It generally requires that they lose out on a few houses before they understand that they are not in control. The sting of losing a house they love is sometimes the best teacher. – Thomas McCormackResources Real Estate

2. Stop Looking for Perfection

Homebuyers need to be aware that the perfect property does not exist. As long as the property comes with more pros than cons, and they can make those cons better by turning the property into their own version of perfection, then everything should go seamlessly. – Engelo RumoraList’n Sell Realty

3. Be Prepared To Make Compromises

You may not be able to get everything you want in a home. Maybe you can get a home for the price you want in the location you want, but it needs repairs. Or maybe you find the perfect move-in ready home in the ideal location, but it’s more than you wanted to spend. You need to be ready to make compromises. Make a list of things you absolutely must have, and make a list of “would be nice” items. – Will FeatherstoneFeatherstone & Co.

4. Mind Your Budget, Not Everyone Else’s

What your friends, family and colleagues can “afford” is not your barometer. Your comfort level should reflect items including loans and debt. Whatever your number, remember: Owning a home is more than just your monthly payment. Consider utilities, tax and deferred maintenance items. Buy a home you can truly afford. The bottom line: Know your expenses. – Brian LawtonProperty Revival Realty

5. Evaluate Your Needs Vs. Wants

Homebuyers should separate their needs from wants. You might need bedrooms for each person, but want a game room. There is no “perfect” house, so understanding what you really need and communicating that clearly to your agent is very important.  Agents will do a better job for you — and the process will move much more quickly — when they understand the things that you really need in a new home. – Jeremy BrandtWe Buy Houses®

6. Become Financially Literate In The Process

Understanding the financing process of a home purchase can be really intimidating. After all, for most of us, this will be the largest purchase ever made in life! Don’t let the fear of unknown paralyze you. Find a real estate agent and lender who will educate you through the process and take the time to answer your questions. – Katie BrownThe Paramount Group at Windermere

The Real Estate Surprises Every Home Seller Should Be Aware Of

Post written by

Forbes Real Estate Council

Successful executives in the real estate industry from Forbes Real Estate Council share firsthand tips & insights.

There are many misconceptions when it comes to real estate. Some of the basic myths and fables can sway buyers and sellers without any valid cause. A real estate agent’s job is to inform clients and help them understand what is typical of a home transaction and what is simply untrue. Many homeowners are still unaware of things they can do that would help the process run more smoothly, from updating a property to accommodating showings for potential buyers and more.

That’s why nine members of Forbes Real Estate Council share below some of the things that home sellers are constantly surprised by, that they wish there were more common knowledge. Here is what they had to say:

1. Home Update Costs

Home renovation has become almost a byproduct of the of the home purchase process. Most folks are intimidated by the whole concept of remodeling, given the lack of visibility to costs, the pain of hiring the right people and the time and disruption it will cause. That issue can be a deal breaker for many buyers, and I think having more transparency to that process can help. – Raf Howery, Kukun and PropenCity

2. Everyone Has The Cutest Baby

A homeowner’s perception of their home’s value is almost always skewed. This is no shock — after all, everyone’s baby is the cutest, and per Facebook, everyone has the Perfect Life. So why shouldn’t their home be worth more than every other home that’s just like it? Actual value is based on market forces: supply and demand. What you spent, how you decorated or what you need to net has nothing to do with it. – Thomas McCormack, Resources Real Estate

3. That Sentimental Feeling

Sellers who have lived in the home for many years develop a sentimental attachment. As a result, they often underestimate the need for, and cost of, repairs. This can lead them to have a price expectation that is far higher than the actual value of the home. Sellers often have to learn that it is the market that determines the best price for the property — not opinion or sentimental feelings. – Jeremy Brandt, We Buy Houses®

4. County Appraisal District’s Value

Most sellers seem to be amazed when I pull up their house on the county appraisal district’s website, and see a different square footage than what the seller remembered when purchasing their home. A sales price is determined by multiplying the area sold by the price per square foot, so having an accurate square footage just may put more money in a seller’s pocket! – Angela Yaun, Day Realty Group