"Some factors mentioned below can distract us from the true value of a property. These can be the deciding factors between buying a great property from a bad one." - Ben Crow
There’s no denying that buying a home is a big decision and yet you may be surprised by the number of people who are influenced by factors other than price, resale value and location.
From the number of a house to a lick of new paint on the walls, it seems we are influenced by emotion and aesthetic much more than we think.
This infographic illustrates the seven psychological factors prospective buyers consider when purchasing a new home.
1. Emotion
Whether someone is buying a house or an apartment to live in, they’re buying a home.
It’s a place where you’ll create memories and for some people, there is a strong sense of emotional attachment.
It’s no surprise that a decision like this comes with a lot of emotion.
In 2013, Commonwealth Bank conducted a survey of Australian buyers and found 44 per cent paid more for a property because they “really liked it”.
How to help keep emotions in check
Before any inspection, have your clients set goals on three non-negotiables the home needs to have i.e. the right price, location, number of rooms…etc.
Doing so will help keep emotions in check when they’ve fallen in love with a home that comes above the asking price or when it comes with 2 rooms and they were looking for four.
If they’re leaning towards a house because of its ‘feel good’ factor try to identify the emotion behind it.
Can it be replicated or re-created in another home?
Eliminate emotion from the equation and put your focus onto the fundamentals and calculations side of the property. Sign up to Properlytics, your definitive property calculations and projections tool.
2. Cultural superstitions
Numbers matter and it may not be the ones you think.
The numbers on a home can determine whether a property is a good fit for the superstitious.
In some cultures, some numbers are considered ‘luckier’ than others.
13 is commonly associated with bad luck but in some Asian cultures, the number 4 is also considered to have negative connotations as its pronunciation sounds like “shi” which translates to death in Mandarin.
How to work around cultural superstitions
If clients have cultural superstitions, it’s best to gain an understanding of them from the get go.
If you’re an agent working with a client who has cultural superstitions, understand that it may be difficult to sway them away from a ‘bad number’ or ‘feng shui’.
Learn to work with their cultural beliefs instead.
3. Perceived value
That new paint job may have only cost $100 and a few hours of your time but to a prospective buyer, a newly painted wall can be perceived as added value.
Superficial things like a room painted in an ugly colour can make people less likely to buy a house—even though fixing such a problem is as cheap as a couple cans of paint.
How to create the value buyers crave
Psychologically, buyers are motivated by added value and getting the most they can from their seller.
According to this article from Insightsquared.com, “value is not a fixed number – it is totally relative, depending on what the buyer has to gain and what they’re willing to pay.”
As a seller or an agent, you want to appeal to this psychological need to “win” by demonstrating as great a value as possible, relative to price.
Consider offering a gift voucher or covering a gas/electricity bill for the first month.
4. First Impressions
Like all introductions, first impressions count.
A buyer’s first experience with a home will either leave a lasting impression or not.
Research that studied 63 un-staged homes found the average selling time of a home decreased to 40 days after going through a ‘facelift’.
How to create a good first impression
Appeal to the senses.
Have fresh flowers arranged in nice vases.
Light some scented candles to create a welcoming experience for visitors.
5. A Home That Tells a Story
Story telling is a powerful medium in sales and marketing.
While the logical side of a buyer’s brain is apt to examine numbers, technical specs, history, potential resale value…etc, their psychological side responds to romanticised stories of their previous owner.
The secret to story telling
Not all stories will resonate with buyers and the chances are, a home is likely to have more than one story.
Get to know the home’s history, collect a few stories for reference so you can cater your story to the audience.
6. Social Proof
In a business built on relationships and trust, social proof matters.
Social proof is key to influence most buying decisions and this is no exception when it comes to buying a home.
How to create social proof
Have customers leave you a review on your social media channels.
Ask for testimonials to place on your website.
7. The Ideal Lifestyle
It’s not just about the home
When home buyers are considering a purchase, they’re buying into a lifestyle
If someone is interested in properties in Bondi Beach, they’re likely to be looking for an active lifestyle with good cafes
For some, living in Bondi Beach means morning walks along the beach before work, an afternoon surf or Saturday brunch at their favourite local café.
Source: https://propertyupdate.com.au/understanding-psychology-of-buying-a-home/
Lawless, T. (2020, July 22). Understanding the psychology of buying a home. Retrieved from https://propertyupdate.com.au/understanding-psychology-of-buying-a-home/