We’ve all been guilty of an impulse purchase at some point. Like that tennis racket we were convinced would inspire us to get lessons, or those towering stilettos we swore we could walk in; and all those clothes that looked great in the changerooms but are yet to make it out of the wardrobe into daylight. Reality creeps in once the shopping buzz subsides and buyers remorse can be easily dismissed, when it’s only a few hundred dollars at stake. But what if the thing you impulse bought was your house? Or maybe it wasn’t an impulse – maybe it was well researched and planned and seemed like the right thing to do at the time, but now you’re consumed by debt and regret because… HINDSIGHT PEOPLE! You can hardly take a house back for a refund and it’s possible the things that are the source of your regret, may be the things that deter other buyers from taking it off your hands.
So how do you know when it’s right? When is the right time for you to buy, what is the ‘right’ house for you? How do you avoid regretting the next home you purchase? Well, the first thing to do is learn from the mistakes of others. You can do all the research and preparation in the world, but hindsight will never be a part of your decision – so borrow some from people you know and trust. Talk to friends and family and find out how they feel about their home purchase. Ask them questions to get a sense of their process and factor that in to what your process might be. How long ago did they buy? How did they decide to buy that house specifically? Why did they choose to buy at that time?
There are a few common regrets you will probably come across, that many homeowners have experienced over time. Factor these in and maybe they will help inform your choices next time.
Buying with your heart and not your head
This is difficult to prevent in advance as we all know the power a rush of emotion has. Approaching a picture-perfect cottage, on a perfect sunny Saturday, after a great sleep, is an entirely different experience to battling with parking to see the same place on a busy, rainy, Wednesday afternoon. That’s just about timing, so avoid the rose-coloured glasses by seeing a property a few times, at different times of day. Making a pros list based on things you love, rather than things that are assets, is an easy mistake to make. Double glazed windows should be on the list rather than gorgeous afternoon sunlight for example. Look at the paint job rather than colour, drive around the neighbourhood and see what is happening in the local area – who’s loitering about? Is there graffiti? Are there many families? Rather than just admiring the streetscape and the leafy glory.
Not doing environmental research
It’s incredible how many people buy homes without doing any research about the local area and immediate environment, with regard to development plans, toxicology and so on. It’s crucial to know if there is risk of exposure to harmful or life-threatening toxins (if you don’t know why, go watch Erin Brockovich again). It might turn out there are only harmless levels of residues, or in fact there may be unsafe levels to the extent that the house becomes a total investment nightmare. You might be surprised to learn that 100,000 homes are contaminated with methamphetamine residue each year. As part of your due diligence you should always get a meth inspection. Not to mention traces of mould, lead, asbestos, or high pesticide levels in soil, the list of things that can make you very sick or even kill you is long and frightening.
If you are serious about a property, then knowing what developments have been approved and what is planned for the land surrounding your property is really important. New facilities such as public transport and shopping centres can add considerable value to your home, while having a safe injecting room, or a wind farm nearby, may do the opposite. Don’t buy because of the wonderful view across the lush parklands, without digging further to see if a factory is planned for that site.
There are also things in the direct environment that you may not notice until you move in, but that can make your life unbearable once you have. Buying an apartment close to a live music venue for example, or at a major intersection with street lights or CCTV cameras, that point right into your bedroom. Maybe the property is across the road from a school that has terrible parking, pick up and drop off options, making your driveway impassable during school hours. Scope out the neighbourhood before you make offers. Chat to neighbours if you see them nearby and even look up local crime statistics to make sure you know what you’re in for before you commit. It’s always important to ‘do your research’ before you buy a property, but this kind of stuff is next level research and too often falls into the ‘she’ll be right mate’ zone.
Buying beyond your means
There are many times in life where our excitement about one part of a situation is misdirected, so we put a lot of time and money into closing the deal, without truly digesting the long-term implications. The wedding over the marriage is a great example. Or ‘hang the expense, let’s put it on the credit card’, over the debt that we buy into with that choice. Financing a brand new car with all the bells and whistles, rather than buying a perfectly functional second hand option with cash.
With property the same can happen. You start out looking for a sweet cottage for two and end up with a two-storey family home ‘for the future’. Or you plan to buy a simple, budget friendly investment unit and end up bidding for something you never planned for at an auction that you were strolling past. Remember you are investing in a property and a secure financial future, NOT just buying yourself a dreamy lifestyle.
Having a clear vision of what your budget is – both for the initial purchase and the ongoing costs and expenses – will tether you to a specific search range and help deter you from straying from your goal. You should also have a realistic picture of what your expenses will be related to the property over the long term. Ideally your mortgage payments are around (or less than) a third of your before-tax income and you have a good idea of your annual expenses around rates, insurances, taxes, fees and so on.
Not doing your due diligence
The impulse purchase is often to blame for people finding out too late they have white ants, or a leaking roof, or internal water damage, or faulty wiring. No buyer worth their salt should be committing to a property without having made sure all of the necessary building and pest inspections have been done. Both minor and major faults can be detected here, which not only tell you all you need to know about the house, they also reveal just how frank the agent and or vendors may or may not have been with you. It only takes one oversight to destroy all faith and trust in someone’s word after all. Before you know it you’re entirely rethinking buying a house that you had almost signed the contracts for.
Along with functional aspects of the property, you should also check that you are making the right choice with regard to the investment. Sometimes regrets come later when people realise they paid too much, but did so because they were so sick of looking. Do some research around other similar properties in the area and see if the purchase price is in line with current market conditions. If they are asking for more than others, find out why – and if the answer is not because it’s the best house on the block, then move on. There will inevitably be something else that provides more value for money and that allows you to stick to your original goals and budget, investing for the future with no regrets.