Smart Moves by Ellen James Martin

How to Avoid Home Buyer's Remorse

Right after a couple in their late 20s were married, they spent a day searching for a house to buy in a city neighborhood popular with their friends. Excited to find a renovated townhouse, they immediately bought the place.

But a month after the papers were signed, the wife happened upon a website detailing several serious crimes that recently occurred in the immediate area, including several rapes and armed burglaries. Horrified, the wife was adamant she'd never live in the townhouse they'd agreed to buy.

The couple managed eventually to back out of their purchase. But their buyers' remorse proved costly both in legal fees and a lost deposit. As a result, they put their home-buying plans on hold and decided to rent an apartment in an entirely different section of the city.

As this true story illustrates, a poorly thought out home-buying decision can have unhappy consequences. But real estate specialists say much of the angst and expense of buyer's remorse can be avoided with research and planning.

"It's all about doing your homework. ... (and making) sure you have some breathing room written into your sales contract to allow you to back out if problems are found in the immediate aftermath of your purchase," says Sid Davis, a veteran real estate broker.

"If time allows, why not drop by the closest police station and ask for data on recent incidents? As citizens, you're entitled to these statistics," says Davis, the author of "A Survival Guide For Buying a Home" and several other real estate books.

Here are a few pointers for buyers:

-- Try to keep your emotions in check when shaping a bid.

Joan McLellan Tayler, who owned a realty firm for 15 years, says would-be buyers who in the past have lost houses to other bidders are sometimes prone to rush into a deal they might later regret.

Granted, buying a home is currently a competitive activity in many neighborhoods. But as Tayler says, every property should be evaluated on its merits, not on the number of people vying to own it.

Eric Tyson, a personal finance expert and co-author of "Home Buying For Dummies," suggests buyers set a ceiling on how much they're willing to pay for a property before making an opening bid.

-- Seek information from neighbors in an area you've targeted.

Your agent should be helpful in sorting through property listings, making sure you identify the most promising homes available.

But once you have your eye on a particular place, it could be the time to talk to those who know the community best: neighbors.

Before Tyson and his wife bought the colonial-style place they still own, he walked around the community, chatting with residents and picking up a large amount of useful information.

"Believe me, most neighbors will bend your ear about their area," he says.

-- Look at enough properties to make an informed comparison.

Tyson and his wife visited 15 properties before settling on their ultimate choice, a four-bedroom colonial with a circular driveway in front.

Even if the first place you see looks perfect, you'll want to ponder alternatives to make sure you have a basis for comparison, says Tyson, who recommends that home shoppers look at a minimum of six properties before they buy.

"Buyer's remorse is much less likely if you've examined several options, even if you must do so in a single day," he says.

-- Get smart about local property values.

If you're uneasy about the price tag attached to a property you like, have your real estate agent show you several comparable homes that are also on the market, including those under contract, Tyson says.

Resourceful buyers might even go a step further by asking those who've recently bought into the neighborhood whether they'd mind giving them a peek inside.

"Drop a little note in their mailbox telling them you're interested in the neighborhood and leave your contact information in case they'll let you come by," Tyson says.

What's the advantage of evaluating the price and quality of freshly sold homes? In areas where home prices are rising, the latest sales are the most telling, more so than transactions that occurred months ago, he says.

-- Don't surrender your right to a home inspection.

Almost without exception, homebuyers are entitled to an inspection of a property once their offer is accepted by its sellers. But in hot markets, some buyers are now waiving this right, believing their bid will be more appealing to the sellers if they do so.

Tyson says he understands why some buyers voluntarily give up the right to an inspection, particularly if they're trying to purchase a home in a strong sellers' market. Still, he argues that an inspection could expose unseen defects, such as a heating system problem, that may not be apparent until after the move.

"No matter how hot the market, I would never advise buyers to forgo an inspection. If for competitive reasons you don't want to have this right in your contract offer, at least you should ask the owners for the chance to do an inspection before you make a bid," Tyson says.

(To contact Ellen James Martin, email her at ellenjamesmartin@gmail.com.)