How to Help Home Buyers Avoid Regrets

On the whole, home buyers tend to be a satisfied group.  

Even after they cut back on entertainment and other expenses to buy their homes, after they revise their list of must-haves and move somewhere other than their preferred neighborhood, the overwhelming majority of people who bought homes in the past year say they love their new homes.

Still, even in good times, the home buying process can lead to buyer regrets. According to the Zillow Group Consumer Housing Trends Report 2019, 61% of home buyers say they wish they did something differently in the process of searching for their home.

With COVID-19 upending norms around everything from touring to timelines and communications, home buyers are facing new challenges that call for agents to be even more attuned to and proactive about addressing pain points for buyers.

Timing, compromises are a pain point for buyers

In the pre-COVID-19 world, buyer regrets focused on timing, money and the choice of home and community. Among buyers who indicated at least one area where they would like a redo:

• 21% say they would start searching earlier or have more time to search
• 16% wish they could have moved into their home more quickly
• 13% would choose a different home
• 12% would choose a different community
• 11% would pick a different method of financing or paying for their home
• 10% would choose a different mortgage provider

Overwhelmingly, though, buyers were satisfied with their agents. Only 9% say they wish they had chosen a different agent or broker.  

First-time buyers have a higher share of second-thoughts

As you might expect, the percentage of first-time buyers who cite at least one thing they would do differently is higher than that for buyers who have previously purchased a home (66% versus 57%).

Experience, however, doesn’t seem to matter much when it comes to buyer sentiments about their choice of home: 15% of first-timers and 12% of repeat buyers say they would choose a different home if they had an opportunity to do things differently, a reflection, perhaps of the persistent problem of tight inventory of for-sale homes. 

Most are buying under a tight time frame

Limited inventory of for-sale homes can force decisions under tight deadlines, which might explain why younger buyers — who tend to gravitate toward competitive urban markets — have more issues with the process than older buyers.

Among all buyers, a whopping 82% of Generation Z, 70% of Millennials, 63% of Gen X, 45% of Baby Boomers and 39% of Silent Generation* buyers wish they had done at least one thing differently.

Those numbers follow the same track when it comes to the amount of time buyers spend finding their home: 64% of Gen Z, 53% of Millennial and 47% of both Boomer and Silent Gen buyers take less than three months finding their homes.

On average, all buyers spend 4.5 months searching for their home. For younger buyers, the time frame shrinks by about a month.

Given that the majority of those younger buyers are coming from the ranks of renters, and that most are shopping for the first time and in competitive urban markets, their feelings about buying a home they would not choose again makes sense.

Takeaways:

• Paint a realistic picture. Younger buyers, who tend to be first-timers, need perspective. It’s one thing to read a how-to. It’s another to experience a process with so many moving parts — finances and financing, timing, dreams and practical realities — to fully appreciate how much reality can butt up against dreams, especially when inventory is low and reflects the tastes of older generations. Given that 45% of buyers are doing so for the first time, perspective is a key to satisfaction. 
• Show potential. Despite the prevalence of home improvement shows on TV, people might not see beyond what’s in front of them. Introduce them to design tools and before-and-after transformations to help them reimagine their living space.
• Help connect people to their communities. By showing them where people in the area like to gather both offline (when possible) and online, they can get to know their prospective neighbors better before making a decision. 
• Learn what motivates them. Like most people considering a large, complex purchase, buyers don’t always verbalize everything on their minds. In your initial call with them, make sure you’re asking questions to get a better sense of their needs around timing, neighborhoods and what they consider non-negotiable when deciding on a home.
• Be proactive. Buyers are in a more challenging place right now because they can't simply visit a property. That can ratchet up the angst, sharpening what have historically been pain points for buyers. Proactively addressing concerns and fears during the search process will help you head off regrets down the line.

*Ages for the generations in 2019: Generation Z (18-24), Millennials (25-39), Generation X (40-54), Baby Boomers (55-74) and the Silent Generation (75+).