It’s next to impossible to get through the home-buying experience completely unscathed. Maybe you accidentally buy a house with mold in the basement (like I did) or you snag a condo across the street from what will soon be a multiyear redevelopment project.
Been through a bad experience? Don’t beat yourself up. No matter how much you prepare, buying real estate can be an intense and messy experience.
But the right preparation can also save you time, money and heartache.
According to a nationwide survey by the real estate firm Redfin, as many as a quarter of homeowners wish they had never purchased their place at all. And you certainly don’t want to number among that number!
Curious about what real buyers now regret, LearnVest caught up with five brave people willing to share the biggest mistake they made when buying a home—to hopefully save you big when you decide to take the plunge.
Buying Instead of Renting
Who: Jay Stevens*, 34, a blogger/entrepreneur, and his wife, 32, a Ph.D. student
In the summer of 2007, Stevens and his then fiancée (now wife) were looking to put down roots. They had hoped to find a two-bedroom apartment to rent, but wound up buying a $360,000 three-level townhouse 48 hours after first seeing it.
What went wrong?
“We were super excited, and everyone we knew were buying homes, and we thought that was ‘just what you were supposed to do’ at our age,” says Stevens.
After falling in love with the “dream house” and the surrounding community, the couple approached a lender and found out they were approved for a $500,000 loan. That sealed the deal—but Stevens says they should have given the decision more thought. “Just because a bank will give you a large amount of money, it doesn’t mean you should accept it,” he says, now knowing this in retrospect.
While they both had full-time jobs and enough in savings to handle the financial commitment of home ownership, Stevens still thinks they could have made better choices with their money.
After factoring in approximately what they would have been paying in rent, Stevens says buying the townhouse—which was significantly more space than the couple really needed—probably ended up costing them an additional $1,500 a month. Moreover, the house ended up losing $60,000 in value in a matter of two years. Stevens says he and his wife felt “stuck” and down on themselves for making an impulse move with such a large amount of money.
Because they bought at the peak of the market, the couple isn’t currently able to sell the house. But the silver lining is that Stevens and his wife ended up becoming landlords, and they’re currently renting out the house while they wait for a better time to sell it.