Leave the emo­tion out

Port Douglas & Mossman Gazette - - FRONT PAGE -

NEW re­search from CommBank re­veals many home buy­ers al­low emo­tions to in­flu­ence their prop­erty pur­chase With the cur­rent state of the prop­erty mar­ket a hot topic of con­ver­sa­tion among prospec­tive home own­ers and ex­perts alike, re­search from Com­mon­wealth Bank high­lights the im­por­tance of keep­ing a bal­anced per­spec­tive dur­ing the home buy­ing process.

Whether it’s home buy­ers over­spend­ing be­cause they re­ally liked a prop­erty, or sim­ply hav­ing a gut feel­ing that the house suits their per­son­al­ity, the bank’s sur­vey of more than 1000 home buy­ers and in­vestors has found many pur­chasers are let­ting their emo­tions through the door when pur­chas­ing prop­erty.

While there’s clearly a num­ber of im­por­tant fac­tors that in­flu­ence prospec­tive home buy­ers from the price and lo­ca­tion to the size and as­so­ci­ated main­te­nance costs the re­search com­mis­sioned by Com­mon­wealth Bank, in part­ner­ship with psy­chol­o­gist Dr Tim Sharp, found that while the ma­jor­ity (75 per cent) of prop­erty buy­ers claim to be ra­tional rather than emo­tional buy­ers, in re­al­ity, emo­tions have a sig­nif­i­cant in­flu­ence over their fi­nal pur­chas­ing de­ci­sion.

The most com­mon emo­tional char­ac­ter­is­tics that in­flu­ence home buy­ers are: lik­ing the feel/ vibe of the prop­erty (37 per cent); an in­stant at­trac­tion to the prop­erty (22 per cent); and suit­ing the per­son­al­ity of the buyer (21 per cent).

The re­search also uncovered dif­fer­ences when it comes to the most in­flu­en­tial emo­tional char­ac­ter­is­tics

be­tween dif­fer­ent types of buy­ers: sub­se­quent home buy­ers are more likely to be in­flu­enced by hav­ing a vi­sion of what they wanted be­fore they moved in (22 per cent); first home buy­ers are more likely to be in­flu­enced by the de´ cor of the in­te­rior (19 per cent); and in­vestors are more likely to be in­flu­enced by the place mak­ing them feel suc­cess­ful (17 per cent).

The re­search also re­vealed emo­tions not only in­flu­ence which prop­erty home buy­ers pur­chase but also how much they end up pay­ing, with nearly half of re­cent home buy­ers (44 per cent) claim­ing they have paid more for a prop­erty sim­ply be­cause they re­ally liked it.

Ac­cord­ing to Dr Tim Sharp, Ex­ec­u­tive Coach and Clin­i­cal Psy­chol­o­gist, emo­tions can ma­te­ri­alise at nu­mer­ous points dur­ing the prop­erty buy­ing process, but they are most in­flu­en­tial when it comes to de­cid­ing which prop­erty to buy and for how much.

‘‘We know that many home buy­ers start their jour­ney to a new home full of ex­cite­ment and op­ti­mism, but are grad­u­ally worn down by the sheer ex­haus­tion of re­search­ing and in­spect­ing dif­fer­ent prop­er­ties. More of­ten than not, by the time it comes to sign­ing on the dot­ted line our heads are crammed with all sorts of emo­tions that ul­ti­mately end up in­flu­enc­ing our de­ci­sion,’’ Dr Sharp said.

Clive van Horen, gen­eral man­ager, home loans, Com­mon­wealth Bank, also be­lieves prospec­tive buy­ers need to con­sider the long term im­pli­ca­tions of pur­chas­ing a prop­erty.

‘‘Given buy­ing a prop­erty is one of the big­gest fi­nan­cial de­ci­sions most of us will ever make, it’s vi­tal the fi­nal pur­chas­ing de­ci­sion is based on sound ra­tional judge­ment and not emo­tional jus­ti­fi­ca­tion,’’ said Mr van Horen.

In con­trast to the role emo­tions play at the buy­ing stage, the Com­mon­wealth Bank re­search found the ma­jor­ity of home buy­ers are ini­tially driven to pur­chase a prop­erty by ra­tional fac­tors, which is par­tic­u­larly in­ter­est­ing con­sid­er­ing many home buy­ers move on to make emo­tional pur­chas­ing de­ci­sions.

For sub­se­quent home buy­ers the most preva­lent driv­ers for pur­chas­ing a prop­erty are ‘‘need­ing more space’’ (25 per cent), ’need­ing to down­size’ (15 per cent) and ’need­ing to re­lo­cate’ (15 per cent). While for in­vestors ‘‘want­ing to in­vest in prop­erty’’, rather than other op­tions (e.g. the stock mar­ket 23 per cent) and ‘‘ my in­vest­ment money is earn­ing lim­ited in­ter­est’’ (15 per cent) are the most com­mon driv­ers.

‘‘I find th­ese re­sults re­ally in­ter­est­ing, but not all that sur­pris­ing. When we start look­ing for a prop­erty we have a very clear ob­jec­tive, for ex­am­ple, need­ing to get a big­ger house to make room for a new mem­ber of the fam­ily.

But as we go through the dif­fer­ent stages of look­ing for the per­fect prop­erty we start to be­come emo­tion­ally con­nected to dif­fer­ent driv­ers, such as imag­in­ing ‘‘how great it would be to en­ter­tain friends and fam­ily in this room’’ or ‘‘how much the kids would love the gar­den’’.

‘‘All of which starts to in­flu­ence the types of prop­er­ties we be­come at­tached to and re­moves us fur­ther from our orig­i­nal ob­jec­tive, and more im­por­tantly, in some cases bud­get,’’ con­tin­ued Dr Sharp.

Mr van Horen added, ‘‘My ad­vice to any­one who wants to get the right prop­erty, for the right price, would be to con­stantly re­visit their orig­i­nal ob­jec­tives for buy­ing a new prop­erty and use them to as­sess prop­er­ties on which they are look­ing to make an of­fer.’’

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