The Psychology Behind Real Estate and Why it Matters to Homebuyers

Buying a home is a big deal and the decision making process is even more complex than you may think. We all know the logical questions to ask ourselves, is it the right price? Is this the right location? What we may not realize is the element of psychology that is present when deciding to buy a home. After months of research and deliberation the average homebuyer is confident that they are about to make a completely rational buying decision; however, the opposite is often true. Educating yourself on the psychology behind buying a residential home and absorbing these hidden details will empower you to make a more informed decision.
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Ask the Right Questions

Anna Ward, vice president of Canter Brokerage, knows the importance of psychology in real estate as she boasts a master’s in psychology from Texas A&M University. Getting ahead of the subtle details that can influence our decisions is important, and asking the right questions at the right time will help. According to Anna, one of the first questions buyers should ask their agent is if they will lower their commission fee.

Here’s the psychology behind that- agents selling residential properties who are unwilling to entertain the idea of lowering a commission upfront may be more focused on closing the sale rather than providing a great home buying experience. Customer service can be sacrificed for commissions. As an example, an agent going through a multi-month sales drought could be incentivized to show a buyer limited options that offer higher commissions.

Some other great questions to hold real estate agents accountable include: inquiring how they decided on the asking price, asking the minimum price the seller will accept and how many offers are the sellers currently entertaining. These questions may seem trivial but the answers can save time and thousands of dollars. It is always in the agent’s best interest to make the sale, even if it’s at a lower price. High or low, a good agent will be able to explain how they arrived at the final price.

Don’t Find Common Ground

According to a Journal of Advertising Research study, emotions can be twice as important as knowledge whenever we make a purchase decision. Although many people have a trusted agent that they consider part of the family, buyers must remember that at the end of the day their agent is making a sale. As salespeople, agents will often try to find things you have in common to help close the sale. Whether it is children, sports or hobbies, resist the urge to connect on a personal level. This isn’t to say buyers can’t trust their real estate agent, but they should remain clear-headed throughout the buying process.

Fall in Love with the Lifestyle

Residential home buyers need to understand that they are buying more than just a house. They are purchasing a lifestyle and this concept should remain top of mind throughout the entire process. This is especially relevant for first-time homebuyers because their naivety has the potential to lead them away from their original goals. The first question for any buyer should be about whether this property will accommodate the lifestyle they want to live.
                                   

“What do I see myself doing in this house?”



A prospective buyer who is single and career focused will likely be looking for something very different than a couple who is looking to raise a family. For example, buyers should also think about the neighborhood in terms of proximity and what is important to them. According to Anna, the most common questions she hears from informed buyers are: Where is the nearest pediatrician? What does the local dining look like? Where is the nearest park? For many buyers, the surrounding community is equally if not more important than the property itself. Before making a decision, consider things like the school district if you plan on raising a family, recreation in the area and the surrounding location beyond the neighborhood itself.

Technology is a powerful way to find the answers to these questions while also keeping your agent on task. Use the internet to cross-reference school ratings, crime rates in the area, selling prices of nearby homes, etc. The information available on the internet can empower you to be a more informed buyer.

 

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