My morning routine usually starts with a zombie walk to the espresso machine, then staring at the thing while I silently wait for the morning's first shot of caffeine, followed by an hour of waking up, watching the morning news, and reading articles from the morning's financial headlines. A few weeks ago, with Flora burrowed under a throw blanket next to me, I came across U.S. News and World Report's New Homebuyers Worries Survey from 2022. This survey was conducted a year and a half ago; some of the worries may have changed since then. But most of these worries are still very much relevant today. As I read the market stats, I couldn't help but think these worries are preventable for the most part. In today's blog, I will cover some of these worries and discuss how to prevent falling into the same rut when buying a home. After all, purchasing a new home should be an exciting time!

I'll focus on the survey portion related to new home buyer worries, but before we do, let's talk about home inspections quickly. Get one, period. Bluntly stated, you can't afford to skip the inspections if you can afford to buy a home. Yes, inspectors miss things; they are human. But even the bad inspectors find more than they miss. According to the survey, 10% of homebuyers chose to skip the inspections. That means 10% decided to walk into their new home on day one, not knowing if any surprises were lurking under the surface; I'm sure I would be worried as well. The only exception to my home inspection advice is if you're purchasing new construction with a warranty from a builder with a quality reputation. And even then, I would still want an independent set of eyes looking at things.

Moving on, let's talk about the metrics provided by new home buyers. 69% of those surveyed admitted to having Buyer's remorse; 33% of that demographic stated that their remorse was frequent. This isn't cool! I'm very open with my customers; my goal is to prevent them from experiencing Buyer's remorse. In my Navy Recruiting days, I learned that Buyer's remorse is attributed to cognitive dissonance. This psychological discomfort occurs when a person makes a purchase but feels dissatisfied because the product doesn't meet their expectations. My experience has taught me that this is usually due to the customer needing to understand things. How do I reduce Buyer's remorse? I explain things in detail to my customers; I hate to say it, but I sometimes over-explain things, but that's okay with me. As a buyer, you can reduce remorse by asking questions. That's hard sometimes because we tend to be quiet if we don't know something; we don't want other people to think we aren't smart (gotta love that pesky ego). But to prevent Buyer's remorse, you may need to buck that natural fear and ask questions. If you don't feel comfortable with the answers you're receiving, get a second or third opinion. Only move forward once you are satisfied. Most people are locking themselves into a 30-year payment plan worth hundreds of thousands of dollars; understanding the process in a bit of detail is imperative to preventing Buyer's remorse. 69%, that blows my mind.

59% of new homeowners expressed concern about home break-ins. This seems high to me, over half of those surveyed, but okay, it is what it is. This is a relatively simple anxiety to prevent. Understand the crime statistics for the area you're shopping in. Don't listen to your friend at work who tells you they live in a great location; think about it: who will admit to living in a bad area? This means you need to check out the stats yourself. Understand the crime in the area, and decide if it's at a level that you're willing to accept. Where do you get these stats? Yep, on my website. I designed it with your research in mind.

45% of those surveyed stated that they worried about the value of their home decreasing, and 36% said they worried about being unable to resell it. These, too, are relatively easy worries to address. We look at the historical real estate stats. Yes, some people experience a loss when selling their home, but that's a low percentage, which is usually the result of lousy market timing and property that needs to be appropriately maintained. As per the St. Louis Federal Reserve, going back to 1975, there has been one period in the last 48 years that lasted roughly nine years, depending on when the property was purchased, during which a home buyer may have bought and sold a property at a loss. Other than this period, real estate values have made positive gains. But let's peel the onion back and think about the macro. If a person purchased a home for $176,000(the median price for Duval County) in 2010 and, four years later, sold it for $140,000, that would be a 10% loss, a tough pill to swallow. However, most people purchase a home to stop paying rent and invest in their own property. In my example, we took a 10% hit, but how much would this homeowner have spent on rent over the same time? In 2010, the average rent for a three-bedroom home in Duval County was $1,133 monthly. Multiplying $1,133 times 48 months, we get $54,385. No one wants to take a loss, but which would you instead take? A 36,000 dollar loss in home equity or a $54,000 loss in total rent paid. Right, a loss is a loss, but I'll take a $36k hit over a $54k hit any day. In this scenario, the property buyer took a loss, but the property owner still made out better than the renter.

The final buyer worry we will address is the fear of natural disasters. 74% of the surveyed listed this as a concern: 54% fire, 37% earthquake, and 49% flooding. Losing my property to fire or an earthquake is out of my control; it's hard to predict if/when the loss would happen. But we can handle this worry with good insurance and an understanding of the coverage. Not all insurance is the same; expensive doesn't always mean better. Here's a list of who Forbes thinks is the best. Think of it like this: if you're standing across the street watching your house burn down, do you also want to be worried about a fight with your insurance, the insurance you chose because they were the cheapest? Or do you want an insurance company that will worry about you and ensure you are taken care of ASAP? This exact scenario happened in my neighborhood. I came home one day about 18 months ago. My neighbor's house was on fire; it was crazy. They stood across the street, watching in horror and crying as the fire department fought the fire; this was bad enough, but they stood there with multiple neighbors, taking pictures for social media fodder. Life wasn't exactly giving them a dozen roses that day, I can only imagine. Eighteen months later, the house is still boarded up and hasn't been repaired or rebuilt; my understanding is that my neighbor is suing the insurance company for compensation and is still litigating. Choosing quality insurance is paramount to reducing anxiety in a ridiculously stressful time.

What about flooding? How do we handle this worry? The same way we dealt with the crime worry was by researching. Of course, I made this easy for you. On my website, you'll find the Federal Emergency Management Agency's(FEMA) flood maps. If flooding is a concern, all you need to do is search the address in question and find out if it's in a FEMA Flood Zone or how close it is to one. If the property is in a flood zone and is mortgaged, it would be required to purchase Federal Flood Insurance. The mortgage company isn't worried about flooding; the homeowner insures them. If you are concerned about it and insurance doesn't relieve the anxiety, look for a home out of danger using the flood map.

It's understandable that home buyers experience worry when purchasing a home. Most of this worry can be put behind them by finding a trusted Realtor® and doing some research. Are you entering the market and having anxiety about the unknown? Email me; I'm an advisor at heart. I'm not happy unless you understand the pros and cons of the real estate decisions that you're making. On closing day, you and your family must be excited about your new home without Buyer's remorse.