7 Factors That Influence a Home Buyer’s Decision
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.
Whether someone is buying a house or an apartment to live in, they’re buying a home. It’s a place where they will create memories and for some many people, there will be a strong sense of emotional attachment. It’s no surprise that a decision like this an emotion one. 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, prudent buyer will have set goals on at least three non-negotiables their home must have i.e. the right price, the right location, the number of rooms…etc. Most buyers set goals in an attempt to keep emotions in check, but when they have fallen in love with a home, the asking price or the number of bedrooms that they were looking for often become minor issues. A large group of buyers lean towards a house because of its ‘feel good’ factor. The emotion can over-rule logic in these cases.
- 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 you’re from a background that has cultural superstitions, you will understand that it may be difficult to sway some buyers away from a ‘bad number’ or ‘feng shui’. You will save yourself lots of angst if you able accept that there are some things that you may not be able to change. Try work with buyers’ cultural beliefs instead.
- 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 the sellers. According to an 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, you want to appeal to a buyers’ psychological need to “win” by demonstrating as great a value as possible, relative to price of course. Consider offering buyers an incentive that will increase their perception of value.
- First Impressions
Perceived value is enhanced by providing a good first impression. 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 they were given a ‘facelift’.
How to create a good first impression
You can engage the services of a professional styling company but if you are able to detach yourself from the emotions attached to your home and look at it as an asset that you are selling, many home sellers find that they are able to effectively style their homes themselves. Appeal to the senses. This is a good opportunity to give away, sell or dump any items that you will not be taking to your new home. A cluttered, over furnished house will have less buyer appeal than one that feels spacious because the clutter has been removed. Remember the axiom, less is more. Check out how other houses that are on the market are presented and use that as a guide for yours. Have fresh flowers arranged in nice vases. Scented candles and sunlight streaming through clean windows all work to create a welcoming experience for visitors.
- 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. Let your agent in on some if the stories about things that have happened to you and the house while you have lived there. A good agent will be able to weave the stories into their conversations with buyers.
The secret to story telling
Not all stories will resonate with buyers and the chances are, your home is likely to have more than one story. Allow your agent get to know your home’s history, provide them with a few stories for reference so that they can cater your story to their audience.
- Social Proof
Real estate is a business that is built on relationships and trust, and social proof matters. Social proof can be a key influence many buying decisions and this is no exception when it comes to buying a home.
How to create social proof
Your agent will have details of similar properties to yours that they will discuss them with buyers. There is a strong possibility that buyers inspecting your home will have inspected other homes in your neighbourhood and already know the details.
- 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 Cronulla, they’re likely to be looking for an active lifestyle with good cafes. For some, living in Cronulla means morning walks along the beach before work, an afternoon surf or Saturday brunch at their favourite local café. For others buyers, it will be all about schools or access to transport or work.
Based on an article published in Corelogic July 2017