What to Do When Buyer’s Remorse Hits You in Escrow? This isn’t just for first-time homebuyers.
Buying a home is a big deal — probably one of the biggest financial decisions you’ll ever make. So, it’s normal for those “what if” thoughts to start swirling around in your head, even after you have a signed purchase contract and are in escrow. Buyer’s Remorse is a common reaction whether it’s your first home or your tenth.
That nagging feeling of doubt and regret? If you’re feeling it, you’re not alone.
Understanding Escrow and Contingencies
Contingencies: Your Escape Hatch (But Only for a Time)
When you’re “in escrow,” this means that all parties have signed the purchase agreement. The next step is for the real estate agent to open escrow, and your escrow officer will handle all the necessary paperwork as well as the movement of funds between the buyer, seller, and lender. They take instruction from the real estate agents and your lender and perform the tasks in accordance with the law.
Early on in escrow, you have a few “get out of jail free” cards, also known as contingencies. You will have a due date for each contingency to be accepted. These usually include:
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- Loan contingency: This lets you back out if you can’t get financing.
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- Appraisal contingency: This lets you back out if the home doesn’t appraise for the purchase price.
- Inspection contingency: This lets you negotiate repairs or back out if major problems are found.
- Take a Breath and Reflect
It’s easy to panic when you start second-guessing yourself, but before making any decisions, take a moment to breathe. Think about why you wanted the home in the first place. Consider whether your doubts are about the property itself or if they’re just part of the natural anxiety that comes with such a big purchase. - Revisit Your Contingencies
If your worries are significant—like you’re unsure about the neighborhood, the price, or the condition of the home—revisit your contingencies. If you haven’t signed off on them yet, you might still have a way out. For instance, you can renegotiate or walk away if the appraisal comes in lower than the purchase price. If your loan falls through, the deal is typically off the table. - Talk to Your Real Estate Agent
Your real estate agent and your lender are your allies in this process. They’ve seen it all before and can offer perspective. Share your concerns with them. Your agent can help you navigate your options, whether it’s asking for repairs, requesting an extension to think things over, or even backing out of the deal. - Consider the Long-Term Picture
Ask yourself if your doubts are temporary or part of a larger concern. If it’s something minor, like fear of commitment, remember that it’s natural. But if it’s something major, like the home not fitting your long-term needs, it’s worth taking seriously. - Consult a Financial Advisor
If your remorse is financially driven—like concerns about affording the home or its future value—consider talking to a financial advisor. They can help you see if this purchase fits into your overall financial plan or if you’re stretching yourself too thin.
Once you sign off on these contingencies, though, you’re pretty much locked in.
If you’re experiencing buyer’s remorse during escrow, the first thing to do is check the date your contingencies expire. If you haven’t signed off yet, you may have options to back out of the deal without losing your deposit.
What to Do If Buyer’s Remorse Hits
When It’s Too Late to Back Out
If you’ve already signed off on all your contingencies, backing out becomes more complicated. At this point, walking away might mean losing your deposit and facing legal repercussions. This is why it’s crucial to voice any doubts before you sign off on those contingencies.
However, even if you’re locked in, it’s not the end of the world. Sometimes, buyer’s remorse fades as you settle into the home and start to see its potential. Give yourself time to adjust. But if the remorse sticks, you can always consider selling the home later, though this comes with its own set of challenges.
Buyer’s remorse is a common part of the home-buying process, especially during escrow. Trust your gut, but also trust the process. Lean on your agent, and your lender, review your contingencies carefully, and make sure any decision you make is well-informed. Remember, it’s your home and your money—don’t be afraid to advocate for what’s best for you.
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