3 Mistakes that Pandemic Homebuyers Made and How You Can Learn from Them

The pandemic, with its many and far-reaching implications, helped to create one of the most chaotic and stressful real estate markets for buyers on record. The frenzy of competition, historically low inventory, and huge jumps in home prices left many buyers in a state of panic, often having to enter bidding wars and many losing out on multiple properties. Many buyers ultimately panicked and settled on properties or priorities that did not match what they originally were looking for. In the rush to buy, many homeowners wound up with nothing but regret. A recently published Zillow study, in fact, shows that nearly 75% of homebuyers who recently purchased a home have regrets about their choices. Clearly, the chaotic market, marked by intense competition and astronomical prices, forced many buyers into purchasing anything but their dream home. There were several key mistakes that these pandemic-era homebuyers commonly made. Learning what these mistakes were can help you avoid the regret facing millions of Americans.

1. Overpaying or Maxing the Budget: When purchasing real estate, it is imperative to fully work out the numbers to know what you can comfortably afford - and stay within this budget! The colossal home prices that are characterizing this market caused many pandemic buyers to purchase homes that maxed out their budget, or even exceeded their budget. Many buyers saw the unfortunate reality that their realistic budget could not buy them a home that met all of their requirements, and convinced themselves to stretch their budget beyond what they were planning for. Many Americans are now left with mortgages that they either cannot truly afford, or are stretched so thin in other areas that they regret the financial strain they are now under. How can you learn from this? No matter what the market is like, the #1 rule when purchasing real estate is to stick to your budget! A responsible realtor should ensure that you only see properties that are within that budget. As a buyer, it is hard to compare a home with more amenities and finer finishings or more square footage that is outside of your budget, with a more affordable home. Keep your expectations realistic and your budget always at the top of your mind.

2. Buying a Fixer-Upper: Many homebuyers, when faced with the reality of what their budget could get them, found a ‘great’ solution. They bought a fixer-upper. Buying a home that needs a lot of work can enable a buyer to get a much larger home, or a home in a better neighborhood, for a much more affordable price than one that is turnkey. Many buyers last year did just this. Now they are realizing how time-intensive and costly home repairs can often be. Many buyers anticipated a certain price point for renovations, when in reality they are costing much more than they originally thought. As renovation projects go on, more work is often needed as more things are discovered about the integrity of the home. Couple this with the rising costs of labor and construction supplies and many buyers have realized they are in over their heads with their new fixer upper. With the supply chain delays being experienced around the county, “quick projects” are now often taking many months to complete - leaving homebuyers with unfinished projects and a construction site for a home. To avoid this, do not consider purchasing a fixer-upper unless you fully understand the work, time, and money that is required. Do your due diligence to understand the true cost of the required repairs, and always make sure you have room in your budget for unforeseen expenses that will come up during the renovation.

3. Altering Priorities: Many homebuyers went into 2020 and 2021 with a particular goal in mind. Purchase a home with more room to accommodate a new lifestyle. Buy in a neighborhood more amenable to their priorities. Find a home with an extra bedroom for a home office. But in the process of accomplishing one real estate goal, many gave up other important priorities that are now leading to regret. Many buyers who wanted more square footage found that their budgets would not allow for a larger home in their main target location and convinced themselves they would be happy in another, more affordable, city or further out in the country. They may have been able to afford a home there with more square footage, but many are finding themselves unhappy in their new locations. The opposite situation also can be a problem. Some buyers wanted to live in more expensive areas and convinced themselves they would be ok in a smaller residence, and are now regretting that decision. When you make real estate goals, it is absolutely imperative that you establish your key priorities and stick to them. Many buyers got wrapped up in the frenzy of competition and made rushed decisions and ultimately wound up settling. Before you go into your home search, lay out your key priorities - whether the location, size, outdoor area, etc - and stick to it when you see properties! You should never have to talk yourself into a purchase, and if you feel like you are settling - don’t!

Pandemic-homebuying was often panicked homebuying. Learn from the mistakes of the past two years to avoid the regret that many are now feeling.

Thinking of purchasing real estate in the Florida Keys? Let our experienced local Florida Keys realtors find you a home that will never feel like you are settling!