Understanding the Psychology and Emotions When Buying or Investing in Real Estate
When it comes to buying property, you need to check your emotions at the door. However, this is almost always much easier said than done.
For most people, some level of emotion will be involved in all their buying decisions. In fact, some believe that up to 95% of purchases are emotionally driven. With this in mind, it is only natural that your feelings will affect the biggest investment decisions you will ever make.
However, you cannot be ruled by your emotions when buying property. While you should listen to your heart, being led by it could result in you overspending or overlooking important details. You need to understand how you are likely to feel throughout the process and make sure you are fully prepared.
Here are some of the most common emotions people deal with when buying property.
The connection with the owner’s story
Each seller tells their own story with the way they present their property.
Many try to create a fantasy, using staging to highlight all the best features and show off the potential lifestyle. Others strip things right back and allow potential buyers to imagine how they would like to live in the space. And then there are those that make minimal changes, believing it shows how comfortable and liveable their home can be.
As a buyer, you are looking for a property that “speaks to you”. This usually means that you are after a place that feels like your version of home, whatever that may be. Such a property will just feel “right” and you will probably be willing to pay a premium for it.
While there is nothing wrong with buying into the owner’s story, you should always focus on the features that matter. Generally, the property will be sold unfurnished, so a tastefully decorated living area is not a good reason to buy. Also, repainting is neither hard nor expensive, so you should not let the property’s color palette put you off.
The fear of missing out
FOMO (Fear Of Missing Out) is a real thing and it drives many people’s buying habits. Once you have emotionally invested in something, FOMO can cause you to spend much more than you planned
Your Real Estate Agent will play on this, repeatedly highlighting the property’s best features to reinforce your interest. They will also try to create a sense of competition to increase your anxiety about not getting the place. Together, these tactics can significantly drive up the price.
FOMO can be exacerbated by the hype around the market. Hype can be created with clever publicity campaigns, via word of mouth or on social media. Getting advice from a trusted expert can be worthwhile. Engaging with a buyers agent can help to look past the hype and keep you focused on what the property is really worth.
The frustration of just missing out
Consistently missing out on properties can be demoralising. This is particularly true if you keep getting quite close and are being priced out of the places you like.
If this happens, it might be tempting to stretch yourself further to secure a place. However, the last thing you want is to overcommit and be left struggling to make your repayments. This will invariably lead to resentment and the place you loved will quickly come to feel like a burden.
Instead, you may need to adjust your expectations.
If you are not able to afford the “perfect” place, consider your willingness to do minor renovations. Many buyers cannot look past poor paint choices and peeling wallpaper, but these things are fairly cheap to fix. Besides, you will probably want to do some redecorating when you move in anyway!
Maybe you could also do without that en suite bathroom, 4th bedroom, or separate dining room you have been looking for. Scaling back your wish list may mean compromising on some things, but could have you in your new place sooner.
Also, remember it takes many buyers upwards of 6 months to secure a property. During this time, there are bound to be false starts and disappointment. It is all part of the process and will ultimately make the final purchase that much sweeter!
The excitement of the purchase
After all the stress, disappointment, and effort you have gone through finding somewhere, you have finally got a place! It is surely a time of mixed emotions, from relief and hope to nervousness and uncertainty.
There are a few practicalities that will need to be dealt with once you have had your offer accepted. You should also make sure you take a moment to celebrate. Buying property is a big deal and a major life event.
The anxiety about the deal
No matter how much you love the place, and how well you did your research, a little anxiety is natural. These feelings will usually kick in as soon as the high from sealing the deal has worn off.
This phase will usually involve a myriad of questions. Did you pay too much? Are there issues with the property that you missed? Is it going to be the right place for you and your family for years to come?
The actual process of settlement can also be quite anxiety inducing. There are a lot of legalities to work through and paperwork to sign. And repeatedly seeing how much money you have agreed to spend does not make the process any easier.
As exciting as a new home may be, the actual move can be quite complicated and difficult to manage. There is a reason many consider it the most stressful thing they have been through. Also, on a purely emotional level, moving represents significant upheaval and is always a time of significant change.
However, you should not let the anxiety take the sheen off your amazing achievement. Focus on everything you love about the place and how much you are going to enjoy living there. And do not be afraid to take another look over the sales photos to help picture your life there.