Property Talk

Buyer's Remorse

Having been at the coal-face of property transactions for the past 25 years, I have witnessed, on occasion, transactions fall apart after the agreement has been signed, because a buyer simply got cold feet. They experienced what is often referred to as buyer's remorse.

This is such a common emotion or state of mind that it is likely that in each transaction a buyer experiences some level of doubt after the finalization of a transaction. A recent article by John Giffen published on Inman provided some useful insights into this phenomena and how best to deal with it.

Non-performing buyers have become a relatively common occurrence in the world of real estate and new strategies have been developed to deal with this profile. In some instances the reason for non-performance remains a mystery to the agent and contracting party and in these circumstances it is advisable to terminate the transaction quickly and move on - being sure of-course to blacklist the buyer to ensure he does not waste another seller or agent's precious time.

However in many situations where a buyer is experiencing remorse it can be easy enough to identify the source and actively manage the circumstances. Herewith are a few of the most common factors that cause buyers remorse and how the deal with them.

1. Family and friends are quick to offer their advise on the transaction and can lobby a buyer to withdraw from the transaction. I personally have experienced the reverse happening as well where the children of a seller provided sufficient pressure to cancel the sale, which ended up being the case even after the buyer had secured the full purchase price. The frustrating thing under these circumstances is that the defaulting party will often not be truthful about their reasons and motivations and through that create great confusion for the other party and agent to the transaction.

2. Buyers sometimes develop FOMO - fear of missing out on something bigger and better. These buyers permanently live in a world where the grass always seems greener on the other side. In these circumstances the agent can actively keep the excitement of the home purchase in front of them as they move towards the registration date.

3. Buyers may sometimes feel pressured to make a decision when there is immediate and real competition from other prospective buyers for the same property. In a seller's market the buyers may miss out on several opportunities before having success and this pressure can lead to regret. Seller's may also experience this if they conclude at a price they perceive as being below their expectations despite it reflecting the current market price point.

4. Property Inspections have a role to play in real estate transactions, but over-zealous inspectors determined to unearth shortcomings may create confusion and uncertainty in the mind of a buyer. These inspection reports should be accompanied with independent third party quotes to remedy any serious problems to provide perspective for the buyer.

5. Mental or emotional issues come into play and a large decision such as a purchase of a home can be stressful. One lesson I have learnt is to never permit a husband to contract on a property without his wife first inspecting and confirming her consent. Such negligence can be disastrous to the transaction.