With more than 140 blog posts under my belt, sometimes the desire to write articles that are interesting, relevant, and fresh is hindered by a touch of writers block. I am constantly mulling over subjects and in my mind, piecing together drafts which I file away for future use when the need to push into new territory is apparent. For me, now is one of those times. I have called this post An idiots Guide simply because I don’t have any training in psychology (apart from first year lab work at Varsity). I have, however, formulated my own opinions and theories through experience at the property coal face over the last fourteen years. And this is what I am going to try and expound.
Buying a house is scary
Home buying is the largest purchase that most people will ever undertake. As such, there are many factors tied up in the process. What prompts people to purchase a home and how do they go from desire to reality? Why is that the residential house market goes through cycles of high activity and slumber when the majority choose to move or stay put, invest or sell up? Lets try and break the process down.
Fear encourages Inertia
Just listen to the news, or your neighbour, and you’ll soon know about the state of the economy and hear it echoed by the general population. High gas prices — a declining national housing market — higher food costs — soaring insurance costs, and on and on. All of these economic conditions can make people (home buyers, especially) fearful for their financial future and strengthens inertia. When the future looks cloudy, the status quo appears safer than pushing out into the unknown. Staying put in the property you are living in seems safer than moving.
Hope encourages Activity
Beyond the effects of feeling fearful about the future, I would also suggest that home buyers need to hear positive messages and feel hopeful about the future in order to break the Status Quo and be excited about buying a new home. Sometimes this can be a self-contained hope — hope for how a home will make life better for their family or it can be a general feeling of positivity in the market as a whole.
Starting at the beginning – the need for shelter
The need for shelter is one of the most basic human needs. A gentleman by the last name of Maslow came up with a cool pyramid that he called the Hierarchy of Needs. His theory is that the lower levels of the pyramids have to be met before you can move up the needs ladder. Property comes in on the second level after things like food, water, and oxygen have been met. You could even argue that basic shelter comes at this level under the “homeostasis” label (the need for a regulated environment in order to thrive).
Houses provide shelter from the elements and security at the most basic level, but as each level of needs is met, property begins also to meet other needs. The need for self esteem, confidence, achievement, respect by others and near the top of the pyramid, property can also express creativity, problem solving, and provide an environment for spirituality and self actualization (temples and churches are classic examples).
With all these layers of needs built into human beings, it is no wonder that many factors come into play when we focus on a person in a home buying quest. No two home hunting humans are alike in their desire, motivation, and needs. Getting to the bottom of this is the job of the agent when he is dealing with people at the coal face.
Pulling the Trigger
All house hunting begins with an event or events that act as a trigger to break the inertia and propel people forward and into the dark and murky house buying abyss. These triggers are as varied as the persons involved and may be positive or negative, incremental or short and sharp, large and live changing or simply a growing awareness that where you are living is no longer fitting the bill. Until something triggers the person/s involved, it is simply dreaming or dinner table conversation to that point. The birth of a baby, a marriage, a death or divorce, a loss of money or job, the kids having nowhere else to play when dad wants to watch the Rugby World Cup that makes him lose his rag and decide that a rumpus room is no longer desirable, it is necessary, an earthquake…..
This initial motivation to act and not just talk about moving house more often than not, starts with the female side of the family or couple. I’m not sure why this is but from my experience, women appear to be the ones making the initial enquiries and are often the ones to make the final decision on the house they want if there is more than one choice that would fit the bill. It may be that they care more about the details or maybe they have more endurance to see the process out when often the male has given up and will settle for any number of homes as long as they tick the few boxes that he considers important.
The Search Begins
For many people, the search begins in earnest with some introspection. What are my/our needs? What do I/want? What can we afford? Why am I/are we feeling the need to move? This self assessment can happen overnight or can be a laboured exchange over many months especially if one party is more motivated than another. Opinions can be strong, emotions can be high because house buying is not only a pragmatic journey but is also an emotional one and often involves a need for a basic level of self awareness and for compromise that can be painful if two or more headstrong people are involved. Who am I and what do I desire in life? How do I want others to see me? And how do answers to these types questions relate to the vision of house I want to buy?
This self assessment may not be a conscious process.
Early on in the search phase, information is the prime focus. This process has become more efficient with the internet but appears to be no less time consuming, there is simply more information that can be absorbed. In this phase, the person in home buying mode is not ready to have face to face contact with real estate professionals or home sellers. House hunters in this phase prefer anonymity.
Getting off the couch
Information brings confidence, and with confidence comes the next step, the move from remote information gathering to a physical entering of the market place. Eventually, it is no longer enough to spend time on trademe,realestate.co.nz, or open2view.com looking at pictures and logging Rateable Values against asking prices. House purchasing moves from intellectual to tactile. The senses beg for their turn to be satisfied, house hunting engages all parts of our brain from the higher faculties right down to the primitive sniffing out of new territory. Animal curiosity must be answered for most people in the physical searching out of potential dwellings. It is a rare thing for a house purchase to be undertaken without the person in buying mode entering the property at least once. Often this will be the first face to face contact a house hunting person will have with real estate professionals. Open Homes are the prime choice of people in this phase.
By spending time visiting properties, the house hunting individual begins to get a feel for comparative value.David’s Law of Human Nature when it comes to houses (I just made that up) states that buyers initially believe that their money can buy more house than is really the case, and sellers believe that their house is worth more than it actually is in comparison with other similar properties. The conditioning process by which sellers eventually meet the market and buyers become realistic about what their budget can buy them is known asGetting Real. In some people this “realization” takes place in a matter of days, for others it may take many months and may involve putting in unrealistic and fruitless offers on properties.
After some time in the market place, the person in house hunting mode is ready to filter further. They have a geographical area of focus in terms of buying location. This buyer group has spent time and energy looking at properties. They are aware of value and quickly eliminate undesirable looking properties or houses that are marketed at an unrealistic level either.
Direct agent contact is the preferred method of house hunting for this group. In an effort to work faster and more efficiently and see new properties to the market as quickly as possible, they will phone their agent contact and try to view during the week or in the evening before the weekend open homers get a chance.
Hot to Trot
Eventually, the desire to purchase a property grows to the point where the house hunter is prepared to offer fair market value or even a premium for the right property. People in this group have got to the point where they are tired of viewing houses, sometimes emotionally drained and despondent from missing out in multiple offer shoot outs, and are ready to give up the hunt. This buyer group is primed to buy, realistic, focused, and often have a deadline. They are what is known by most agents as “hot buyers”. These are the group that get the first calls from agents and come running to view the home in question – often with only a half hours notice.
The greater the number of people that have come out of the property buying pipeline and are sitting and waiting in the hot seat primed to buy, the more the local market in question is a sellers market.
Realise that house hunting is a process that can be time and energy consuming. You may not find the house of your dreams, but you will find a home that you can call your own and that fits the bill for you and your family. It may take some time to find the house that catches your attention. Don’t be afraid to ask questions. Come to terms with what your budget can buy you and stick to it. Come to terms with the fact that eventually you will may have to pay what you think is a smidge too much in order to secure a good property.
If you want to get VIP treatment from agents, take on the characteristics of a hot buyer.
- Try to work with only one agent/salesperson in each agency/office and call or text your agent of choice weekly (preferably after their weekly sales meeting). This demonstrates motivation, committment to purchase, and loyalty – three highly valued qualities in any house hunter.
- make yourself available to view properties during the week.
- give quality feedback about houses you view so that your agent can get a more accurate feel for what you like/dislike and guide you more accurately towards houses with potential.
- be pleasant, be gracious, be friendly. Don’t be a know-it-all.
Having an understanding of the house buying process will give you a better feel for the marketplace in your area and why there is sometimes an ambivalent response to your property.
- Making your home easy to access outside of standard open home times encourages agents to bring the more primed buyers.
- Be careful that you don’t lose that critical first few weeks of marketing by overpricing your property or not taking any offers that get presented seriously. Those offers early on are often from the most primed buyers and you can sometimes miss your chance if you disregard the messages that these buyers give you through your agent about price and presentation.
- Encourage your agent to be honest with feedback, don’t get defensive if flaws or weaknesses of your property are mentioned. Buyers don’t have the connection to your property that you do and will be honest in their assessment.
- Buying people are viewing your property with fresh eyes, they will see the cobwebs, scuff marks on walls, flaking paint and herb gardens growing in the gutters. Get a friend to come and visit your house without you there. Get them to write down what they see and the impression they have. Follow through and tidy up all those little presentation items that can let the side down. Buyers buy by comparison, if your place doesn’t measure up, you are helping someone else sell their property.