3 Last-Minute Real Estate Regrets - and How to Combat Them

Any time you make a major commitment, financial decision or move to the next step in your life, there’s a chance you’ll have regrets at the last minute. Just as brides and grooms commonly experience cold feet before they walk down the aisle, many a home buyer has found themselves sitting at the closing table, pen paralyzed over paper, mentally cataloging their last-minute regrets.

The first step in dealing with last-minute regrets is to understand that they are totally normal - even rational. The fact that you're fixated on your deal, or that you're scared you've made the wrong decision is a sign that you are treating this transaction with the gravitas it deserves.

If you are buying or selling a home, here are three last minute regrets you might encounter, and some ways to rethink and counteract them.

1. I left money on the table - could have gotten more (or paid less) for it. This regret showcases a classic case of buyer’s - and seller’s - remorse. The day an offer is signed, sometimes within moments after acceptance, sellers second guess whether they might have been able to get more cash if they’d negotiated harder, and buyers beat themselves up over not going in lower or holding out against the seller’s counteroffers.

Conquer real estate remorse by understanding that the universe in which you pay or receive anything other than what you and the other side actually DID agree to is a hypothetical fantasyland. It doesn’t exist. Your decision made sense when you made it, and did actually result in a deal - unless you realize that the home does not actually suit your needs or you receive new information that changes your understanding of the home’s value (i.e., later disclosures or inspection reports reveal significant problems) within the time frame you have for resolving such issues, a deal is a deal.  

So stop torturing yourself and let it go. Be content with the fact that you bought a home at or near the bottom of the market, or that you got your home sold at a very tough time to do so, and turn your attention to the next phase.

2.  I’m overwhelmed by the 30-year mortgage commitment.  Thirty years seems like a long, long time. But here’s the rethink: you need to live somewhere forever, and I hope that your forever will last 30 years times three!  So, unless you have access to free housing somewhere, here are your options:

• You can rent a home and pay rent to a landlord every month for the rest of your life, or
• You can buy a home with cash, or
• You can use mortgage financing to buy a home, and make payments on it over time.

So, in fact, the commitment you make to paying on a 30-year mortgage, which you have the power to pay off entirely over time, is less onerous and lengthy than the alternative: paying monthly rent ad infinitum. While it’s true that your mortgage binds you to a particular property unless and until you can sell it or otherwise move on, if you select your home wisely you will (a) relish that stability and/or (b) select a home with good prospects for resale in the long-term.  (If you think you’ll want or need to move in less than a 7- to 10-year time frame, you might be well-advised to continue renting rather than buying a home.)

The fact that you take out a 30-year mortgage (or a 15-year one, for that matter) does not bind you to that time frame; many homeowners elect to pay their mortgages off early. Putting a plan in place to shave off five or 10 years from your mortgage commitment by paying extra toward your mortgage principal on a regular schedule is one way to control your regret and put it to good use.

3. I can’t believe I went through all of my cash cushion!  In this relatively new mortgage era, lenders are requiring buyers to put some of their own skin in the game, by requiring down payments in a way they once did not. Beyond that, the vast majority of the down payment assistance programs that once helped buyers meet these requirements are now gone (state, local and employer-funded programs are the last bastions of down payment help). As a result, today’s buyers frequently spend a couple of years saving up their cash, and optimizing their credit creating strong financial habits and getting used to having a fluffy cash cushion along the way, then end up writing a couple of checks - earnest money deposit, increased deposit and cash to close - that wipe nearly the whole thing out in 45 days or less.

And that can be traumatic. But if your spirits are feeling as deflated as your savings account when you write those checks, keep in mind that you are investing that money in a home that your family will be able to live and flourish in, and eventually either pay off or have equity in, if you continue your responsible financial trajectory.  Additionally, this is precisely the reason you saved the cash in the first place. 

Finally, due to your timing vis-a-vis home prices and interest rates, you are getting the most home-buying bang your hard-earned bucks could have bought anytime in the last decade or so.  And that’sreally something to be proud of - not to regret.