Conventional Wisdom Says Leave Emotion out of the Home Buying Transaction
Emotional home buying isn’t a bad thing. It may seem logical to let the numbers do all the talking and check your emotions at the door as you enter into your home buying search, so that you can protect your investment from the start. After all, you don’t want to pay more to buy a home than the market dictates is reasonable just because you’re emotionally connected. Everyone’s natural instinct is to try to avoid falling in love, as it often results in a buyer’s “weakness” and the buyer pays a higher price for having emotions wrapped up in the home buying transaction. Everyone knows this. However, emotions are actually shown to have the final say in any decision. There is a delicate balance of emotion and logic that will ultimately bring you to a happy outcome when you’re home buying. There are pivotal moments where emotion plays an important role. Know the place of emotion and logic in every step of your transaction and focus on the dance between them, rather than leaving one or the other aside.
Do Your Home Buying Research Logically
LOGIC: When you start your home buying search, know what you’re looking for. Carefully consider all your parameters and limits, must-haves and nice-to-haves. Know your requirements, how many bedrooms, bathrooms & communal spaces will make you and your family comfortable. Study the market so you have some idea what it might cost to meet your requirements. Make a list, check it twice. Know your numbers.
When Home Buying, Let Yourself Fall in Love
EMOTION: When you walk into a home, allow yourself to focus on how the place makes you feel. It’s almost impossible to ignore this even if you want to, which is why staging is so important for sellers. Spaces, colors, flow and finishing touches have an emotional effect on all of us. It takes work to overlook things that don’t give us a free, happy feeling when we enter a space. Use your imagination to let yourself envision how your family might use the space, where you might go to have peaceful moments, and will the home’s layout lend itself to your lifestyle. Imagine the memories you will create.
If you get a great feeling, trust it and explore it. It’s okay to allow yourself to fall in love with a home. In fact, it’s encouraged. If you approach the home buying search from a purely analytical perspective, calculating the price per square foot and not paying a dollar more than market value, for example, you’ll very likely end up in a home you don’t love, even though it checks off all the boxes. Have you ever dated a person who fit your wish list to a “T” and had every trait you ever thought to be important in your search for the right person, but you just didn’t feel like this person was “the one”? Without love, most people find it nearly impossible to enter into a marriage contract. In the end, that’s not good for your pocketbook, as you’ll more likely be back out on the home search in short order. It’s the love of a house will give you all the motivation to turn it, with all its warts and imperfections, into your dream home.
Conversely, if the house doesn’t feel right for you, trust your instinct, your “blink” moment, and walk away (by the way, I highly recommend you read Malcolm Gladwell’s book “Blink” to gain a better understanding of how these instinctive judgements you make are not actually baseless nor devoid of reason). It’s your love that will inspire your vision. It’s the love that will help you see past the blotchy skin and pimply face, and see its beauty instead. Let it in. Embrace it. But always check it regularly to make sure it isn’t costing you more than you can afford.
Don't be Completely Swept Away in Love
LOGIC: Determine whether the asking price is aligned with the market value. While you may bid a few extra thousand based on your love of a house in order to beat out some competition, be aware of the neighborhood’s market ceiling. If bringing the home up to your personal standard will turn your investment up-side-down, stop and reconsider. At a minimum, be keenly aware that you may be buying something at a price you can’t recover when you sell. Are you okay with that potential loss? Take a moment to observe details that fell beyond your initial impression. Notice unpleasant noises that may be a regular occurrence, pay attention to proximity of neighbors and busy roads. Try not to overlook things that will drive you crazy once you settle into the home and get past the honeymoon phase. Don’t let yourself be swept off your feet while missing important features. Revisit your list of requirements and note how many boxes are checked and how many are not.
When Negotiating, Check Your Emotions at the Door, But Be Emotionally Intelligent!
LOGIC: When it comes time to make an offer, check your emotions at the door and proceed with reason. If you already have established your top dollar, which you should have, stick to it and know that there are always more houses on the market, or coming on the market that will touch your emotions again. It’s never the last chance for love. Put your best offer forward, and then relax. Most importantly, don’t let your emotional self into the negotiating room, only to get your feelings hurt by a counter-offer you don’t like, and end up losing a house because you didn’t like the way a seller behaved. This transaction will pass, and when the house is yours, these emotions will pass too. At the same time, DO be aware of factors that might drive your seller to accept your offer. If there is something you can offer them that doesn’t impact you too negatively, but may make them feel good about the transaction, absolutely do it! And don’t miss the key word there – make them FEEL good. It’s capturing their positive emotion that will win the deal. Despite the fact that a concession may have little financial impact on the attractiveness of the offer, giving the seller something they want will elicit a positive response.
Keep a Big Picture Perspective - Asking for Repairs
EMOTION/LOGIC: Yeah, this one is both. When you’ve finished all of your home inspections and it’s time to decide what you’d like your seller to repair before you take ownership, balance carefully. Your approach to this important step can make or break a deal. There will always be minor repairs recommended by your home inspector. Be aware of how your requests for repairs may cause a negative emotional reaction from a seller. Being cognizant of your seller’s emotional state is as important as awareness of your own. If you nitpick every item your inspector touches on, your seller may decide to repair none of it. If you really want the home to be perfect when you take possession, new construction may be the way to go. 😉
Certainly, if there are critical repairs, ask for them. Any future buyer will want the same things and thus your seller should realize this will likely be a cost they’ll have to endure in order to sell. Some repairs may even be necessary for an appraiser to approve a loan. Consider if the cost of a specific repair will put a home out of your budget or beyond what is a fair market price for the home. If it will, then demand the repair and be ready to walk away if they can’t do it for you. If you can still afford the home and just feel that the seller is a bad person for not doing the repair, take a pause and look at the big picture. Your opinion of the seller is quite irrelevant to your long-term happiness in the home. Use logic to make this determination, not your feelings about the seller. The seller has their own budget concerns, and it’s not really about what you think is fair, but whether both parties can accept an outcome.
Emotional Home Buying is Inevitable Reality
Twenty-first century scholars in psychology have increasingly shown evidence that emotion plays a more integral role in decision making than cognitive thinking. In a Harvard study on Emotion and Decision Making, by Jennifer S. Lerner at Harvard University, several studies were cited whereby studying patients with injuries to their ventromedial prefrontal cortex (area of the brain responsible for integrating emotion with cognitive thought), allowed scientists to observe that without the integration of emotion, decisions were sub-optimal and much more difficult to make as well. For example, because fear of risk (as an emotion) was erased from the equation, these patients repeatedly made choices that increased chances for financial gains, but at extremely high risk, often resulting in bankruptcy and the like. Also, patients of this type exhibit a difficulty in coming to any decisions quickly, as they consistently study facts without any compelling reason to “pull the trigger” on any decision.
My point? The notion that we can make important decisions without allowing emotion into the equation is rather absurd, and instead, we need to focus on the careful study of our own emotions and knowing when to allow them to dominate and when to temper them, for optimal results, particularly in home shopping and selling.
An Emotionally Intelligent Realtor® will Upgrade Your Home Buying Transaction
When you hire a Realtor®, make sure you find one who is emotionally intelligent. They should be able to negotiate well on your behalf, minimizing the negative effects of your emotions on the home buying transaction, while also being aware of the emotional state of all parties involved, even the other agent. This awareness will likely yield you a better price, and can be the factor that makes or breaks a deal in a multiple offer situation. If you have more questions about emotional home buying or any other real estate question, please feel free to contact me.
Go fall in love!