A recent Bankrate survey found that the majority of millennial home buyers have regrets following the purchase of their home. A full 64 percent of millennial buyers reported disappointment about some aspect of the home after closing.
Millennials’ buyers’ remorse is fairly unique to their generation. While 64 percent of millennials experience home-buying regrets, only 45 percent of Gen X buyers felt the same. An even smaller portion, only 33 percent of baby boomers reported feeling home-buying regrets. So why are millennials having so much more regret than their older counterparts?
Unexpected Home Repairs
One of the largest sources of regret for millennial buyers is the financial stress of homeownership. The cost of maintenance is one financial burden that millennials are especially frustrated with.
The cost of home projects can be surprising, especially to first-time homeowners. Last year, homeowners spent an average of $13,138 on household projects. Although most buyers get an inspection before purchasing, young homeowners often don’t have experience estimating the cost or urgency of repairs and updates, and budgets aren’t always made with money for home improvement in mind.
Some updates are necessary, like new roofing when the old one is leaking and causing damage to the interior of the home. This project sets homeowners back by an average of $9,000, although the cost can be much higher if the home is bigger. Homebuyers have to plan for this expense if they buy a home with a worn-out roof because it’s not an update that can be delayed for years.
Other updates are simply aesthetic, but still quite costly. Many buyers purchase homes they don’t love, with plans to update the look. They may not realize, however, how much the updates will cost. A bathroom remodel can cost up to $20,000 or more. Even a seemingly simple task like repainting the interiors can set you back thousands of dollars. When homeowners who didn’t plan for these costs realize the price tag, they either have to come up with the money or live with the aspects of the home they don’t love.
Frustration with Finances
Home improvement and maintenance costs aren’t the only expense causing millennial homeowners frustration about their finances. The Bankrate survey also showed that 12 percent of millennials said their mortgage rate was too high, and 13 percent said they agreed to a sale price that was more than it should’ve been.
It’s the Wrong Home
Not all reported regrets from millennial homeowners are related to finances, however. Sometimes the remorse comes from simply not loving the new home. For example, 15 percent of millennials are unhappy with the location of their new home, and 30 percent felt the home was either too big or too small.
Are millennials just too picky? What’s causing so many of them to feel unhappy with their recent home purchases?
A Competitive Market
It’s likely related to the extreme competitiveness of today’s market. Homes sell so quickly that prospective buyers often feel they have to make a decision with very little time to consider.
In many regions, the median number of days spent on the market has dropped by as much as 21 days from this same time last year. In some of the fastest moving markets in the U.S, like Salt Lake City, the median days spent on the market is as low as five days, and many homes are selling faster than that.
Young homebuyers are especially affected by the extreme speed at which homes are selling because they are forced to make quick decisions without proper time to evaluate each home. Since they have little experience with homeownership, it’s unlikely that they will be able to fully consider what each home offers in a short amount of time.
The One-third without Regret
Although the number of dissatisfied millennial home buyers is high, there’s still around one-third who stated that they had no regrets. Why are 36 percent of millennial homebuyers so much more satisfied than their peers? Are they simply lucky? Are they able to make decisions quicker and compete more effectively in this rapid market?
It’s likely that the satisfied millennial buyers had help. The key to avoiding regrets could be as simple as finding the right agent. Many millennials are first-time buyers, so they may have a limited understanding of the buying process. A skilled agent is especially helpful in these circumstances.
When asked what buyers needed help with, 52 percent said they wanted help finding the right home, 13 percent said they wanted help negotiating the terms of sale, and 11 percent said they wanted help with price negotiations.
So if it’s just a matter of finding the right agent, why were the majority of millennials still unhappy with their purchase decision?
Finding the Right Person to Help
According to NAR statistics, 73 percent of buyers only interviewed one agent during their home search. The right agent makes a huge difference in negotiating the right price, finding the right home before other people, and actually being able to close on the deal. The right agent can also help you understand the level of expense the home will be to repair and maintain.
Maybe millennials are just picky when it comes to homes. But on the other hand, even the pickiest person would benefit from an expert agent. Hopefully next time these unsatisfied buyers will find the help they need and avoid that dreaded buyer’s remorse.