After a wild year long buying spree the majority of millennial homeowners now regret their property purchases. Real estate taxes are likely to be one of the big factors in this buyer’s remorse.
Buyers Gone Wild
Homebuying went viral over the past year. It has been like a national epidemic of its own. New record numbers of homes have been sold, and at new record high prices. According to Redfin, some properties in Nassau County, on Long Island have received half a dozen to over 25 competing offers from buyers. Many have paid far more than even the most optimistic sellers have been asking for.
Now that the reality of those decisions are kicking in and the other bills are rolling in, many seem to be regretting buying a home.
Buyer Remorse
According to a new Bankrate survey almost half of Gen X buyers regret buying the home they are in. Almost 65% of millennials are experiencing buyer remorse.
Across all age groups the number one cause of their regret and frustration is the other costs of owning a home. Many don’t factor in property taxes, insurance and maintenance, repairs and replacements on top of their mortgage payment. They certainly don’t budget for the inflation of these expenses every year either.
Then the storms come. Then the annual property tax bills come in that can be thousands, tens of thousands of dollars or a lot more.
The next biggest regret is location. You can change the carpet and paint the walls, but you can’t change the location.
Next, is that they bought a home that was too big or too small. Followed by realizing they have overpaid for the home, and that their interest rate and mortgage payments are too high.
Avoiding & Managing Home Buyer Remorse
If you’ve been thinking about buying a home, then make sure you do your homework and all of the math first. Account for all of the taxes and other costs, and still leave yourself plenty of room in your monthly budget to save and have a life too. Even if another pandemic comes along.
Before even peeking at homes for sale online or in your neighborhood, take some time to really think about what you need and is most important. Make a list to keep you objective instead of letting your emotions carry you away in a bidding war.
Be patient. House prices go up, and then they come down hard. You could get a much better deal by waiting for the next dip.
If you are already in this situation, then start by challenging your annual property tax bills and getting them lowered. You may find big savings just with this one hack.
If you hope to resell and get out before the market tanks on you and takes your savings and credit with it, then make sure you know how much the taxes will be on selling your home, and appeal your property taxes now to make the home more appealing to the next buyer.