Buyers Remorse: Are you making the right decision?

So you’re about to or have just wrote an offer on a home and now you’re having second thoughts… you’re not alone. In fact, almost half of Americans have buyer’s remorse about their current home or the process they went through when choosing it (Trulia Survey 2017). So what is buyers remorse and what causes it?

Several researchers have studied decision-making, and in the field of psychology describe this phenomena the feeling of discomfort after making a decision in Cognitive Dissonance Theory. Cognitive dissonance is defined as the tendency for individuals to seek consistency among their cognition (beliefs/opinions) (Simply Psychology 2018). Therefore if you have beliefs about what makes a “perfect home”, and the home meets some but not all of these criteria – this produce a feeling of discomfort (or buyer’s remorse).

Additionally, dissonance theory states that the degree of regret will depend on two factors 1) the proprotion of dissonant and consonant cognitions (the proportion of criteria that is unmet, and 2) the importance of the cognitions (Simply Psychology 2018). So how can you reduce the inevitable cognitive dissoannce associated with purchasing a home?

Transparency is key! As you go through the process of viewing homes with your realtor, be transparent about what you can/cannot afford, what features are important, and what you like and dislike about the homes and process. Giving your realtor insight into your decision process will help them determine find, evaluate and select homes that best match your criteria. Ever heard the saying 4 eyes are better than two? This is true for purchasing a home as well! Having additional eyes looking for want can help increase your odds of finding what you want. Additionally, be honest with how you’re feeling throughout the process – let them know if you are uncertain and they may have additional information or resources that can help guide your decision.

Additionally, while it’s important to have an idea of what you want, and make them transparent, also remember that expectations are not always reality! That’s why it’s a good idea to learn more about what your neighborhood market offers, and the process of buying a home. This will also help you have more realistic expectations to form your criteria and feel more comfortable in making your decision. In fact, in a survey on Cognitive Dissonance and Consumer Behavior, found that respondents experienced less dissonance when they were personally involved with making the final purchase decision and actively garnering first hand information about the product (Journal of Business and Management 2012).

In addition, this research also found that respondents that avoided consulting with others on their purchase also had reduced cognitive dissonance. So while you love your great aunt, and mother-in-law – research and make your decision based on facts and your desired criteria, not others opinions. Now this doesn’t mean you have to know it all, utilize your resources (like your Realtor, Inspector, Loan Officer) to help educate you throughout the process.

When making a big decision, it’s easy to go back and forth between the options, “Well this one has X, but that one has Y and Z.” By being systematic in narrowing and making your decision, you can simplify the process for determing the right choice. Particularly if the the two options are similar (similar level of unmet criteria), and if there is high-cost for these items (high-level of importance). If you are it can help you be more objective in your decision, and help to make you more confident about your decision. To help you do this, download the helpful Decision Maker Helper, which will help you prioritize criteria and narrow your list.

1. See what’s out there: go to showings and work to narrow your list to 3-5 homes.

2. Determine 10-15 criteria that will help you make your decision. (Too many criteria will reduce your focus on the most important criteria).

3. After determining which criteria make sense for your situation, weight each of these criteria with a weight of 1 – 3, 1 being that it’s low priority and 3 being that it’s a must. Then share this criteria with your Realtor. (Not all criteria is created equal, weighting your criteria will help to simplify what’s really important)

4. Now, evaluate your short list using your criteria by giving it a score of 1 – 25 with 1 being terrible, and 25 being the best. (By having the scale between 1 and 25 rather than 1 – 10, or 1-5 – it will quickly make weaker homes more apparent)

5. Now you have your home score – which should help you determine which home met the most of your most important criteria. The home with the highest score will theoretically be the one that most closely resembles your desired criteria.