First-Time Buyers Ride Emotional Roller Coaster

By: STEVE KERCH: The Wall Street Journal Online
Buying a first home can be a trying experience, a new study says.

Buying a home can prove to be a trying experience even for the most seasoned homeowners. But for first-time home buyers, the emotional roller coaster is especially gut-tugging, a new study says.

First-time buyers go through a series of emotional highs and lows in the home-buying process, based on 11 key "satisfaction milestones" identified in research from RealEstate.com. Those milestones include everything from the initial dreams of homeownership and what that might entail to the harsh realities of home-inspection reports.

Unlike dizzying amusement-park attractions that return you to level ground when the ride is over, the home-buying transaction ends on the proverbial high note, with new owners saying they feel most satisfied on the first night they spend in their new home.

"What's amazing in many ways is that completing the process is the absolute emotional high. You might have thought it was finding the right house or closing the deal. But that first night in the house, that was the real 'ah ha,'" said Holly Slaughter, senior marketing manager for RealEstate.com, who oversaw the study.

Along the way, though, the road takes some abrupt turns.

When first-time buyers initially begin thinking about becoming homeowners, their satisfaction is relatively high. They may be dreaming about the traditional single-family home with the white picket fence and looking at enticing photos of homes for sale on the Internet.

But the first time reality sets in, what the study identified as the "scaling" stage, the satisfaction meter hits its nadir.

"Once you start looking at what you can afford, specific neighborhoods, and getting preapproved for a mortgage -- things you don't think of when you're in the dreaming phase -- that's when there's a big drop," Slaughter said.

In fact, follow-up interviews with first-time buyers found that the most important lesson learned was that they should have gotten that mortgage approval early in the process, she said.

Once buyers come to grips with reality, emotional satisfaction increases again as they begin viewing properties for sale. Satisfaction sinks again as they "rescale" their expectations based on what they see and then takes off again when they find the house they want to bid on, the surveys show.

Negotiating the deal, however, causes another emotional tumble which is quickly reversed when the bid is accepted. But reality intrudes again during the inspection process, as emotions take another big drop.

The limbo between inspection and closing is also a down time, and the closing itself does nothing to lift the spirits. It's not until that key goes in the lock of the new home that satisfaction peaks.

"Going from renting to first-time homeownership is quite a bit different than going from apartment to apartment, which you can do in a weekend. The home-buying process involves more time, research and patience," Slaughter said.

"We know consumers feel a little anxious and ill-equipped to handle this whole process," she said. "But once they get into it, consumers really understand that that have to be patient with the process, that it's not something you just jump into, like going into Best Buy and buying an MP3 player."

The Internet has helped level that playing field, as 41% of first-time buyers in the RealEstate.com survey reported they used the Web to research home listings, school data, real estate agents, mortgage rates and other housing data.

"The Internet provides consumers, especially first-time home buyers, with a wealth of information that can help set their expectations and prepare for the ups and downs of the entire process," said Jeff Lyons, general manager of RealEstate.com. "Whether they're looking at listings, finding a Realtor or searching for the best mortgage, it's all at their fingertips."

The 11 stages of the home-buying process

These 11 "satisfaction milestones" were derived from a RealEstate.com study that involved hundred of hours of interviews in surveys and focus groups with more than 2,000 first-time home buyers.

    1.  Dreaming
    2.  Scaling
    3.  Viewing
    4.  Rescaling
    5.  Finding
    6.  Negotiating
    7.  Accepting
    8.  Inspecting
    9.  Limbo
    10. Closing
    11. Completing

Even after planning and setting expectations, home buyers still find themselves feeling unsettled during the process, the study found. Thirty percent were ill at ease with the time and effort they spent obtaining a mortgage, followed closely by those who found themselves anxious during the time spent "in limbo" between making the offer and closing on the house (29%).

Sixty-two percent of homeowners cited "being patient with the home buying process" as paramount to staying sane throughout the process, an accomplishment that's easier said than done.

Additional "after the purchase" survey findings:

    •  Forty percent of new homeowners said window coverings were the priority for
       their first night in a new home.
    •  Eight percent said celebratory champagne on the first night is a must.
    •  Repainting walls is the first home improvement 38% of new homeowners make.
    •  Although 15% say they're too broke after buying to make any changes, 14%
       start right in with renovating the bathroom or kitchen.
    •  Most homeowners say they moved across town (44%), while 9% relocated to
       another state.