How Do Emotion and Logic Influence Which House We Buy?
When people shop for a house, there are predictable behavioral patterns that occur throughout the process. The internal struggle between emotion and logic is common with home buyers. Everyone wants to buy a home that they love AND that has great features for resale. The challenge for home buyers is to find that perfect balance between what's practical and what's charming.
Emotion and logic are two human traits that are at odds with each other when shopping for a home. Knowing how each trait can affect your decision making process while shopping for a home can help ease stress and allow you to feel in control of the buying process.
There are unique variations of the "emotion versus logic" battle. Sometimes the tension is external, between an emotional spouse versus a logical spouse. Other times the battle is internal for a first-time home buyer who swings back and forth between the two sides. There are many different scenarios.
So, which one is the safest to follow; emotion or logic? Below we outline why they are both important and how together they make a great combination, when balanced. If either of these two sides are left unchecked they can seriously complicate the process and leave you with buyer's remorse.
Let's take a look at how both emotion and logic affect the home buyers.
How EMOTIONS Influence Home Buyers
The emotions present when home buyers walk through a home for the first time are interesting enough that HDTV has an entire line up of shows about it. People love watching other people look at homes. It’s an interesting experience and a highly emotive process, even if you aren’t usually a very emotional person.
Analytical, data-driven home buyers have a very different home shopping process than emotionally led buyers.
Statements you might hear from a home buyer led by emotion, that you would not hear from an analytical home buyer are:
- The Christmas tree would look great right there.
- Oh, I could just picture myself having coffee in the morning here.
- The stars will look awesome from this backyard.
- The kids would love to play in this room.
- Think of all the fun hanging out with friends on this deck would be!
Notice all of these statements are related to events; Christmas, having coffee, friends over, etc. Emotional home buyers are influenced heavily by memories. Creating memories is a common reason for home purchase and is a HUGE motivating factor for home buyers who tend to shop using more emotion than deductive reasoning.
THE PROS OF EMOTIONS
Importance of Memories - Having a strong awareness to the importance of memories is a valuable attribute. When I think back over the last few years the memories that I’ve created with my family are my most precious commodity.
When you live in a house every photo from that time period will have pictures of that house in it. Some people recall stages of their life by what house they lived in. Understanding the importance of finding a home that “feels” right is essential to feeling content which results in staying in a home longer. Home buyers with a strong sense of sentiment naturally understand this.
Awareness of Functionality - Emotional home buyers are quick to assess the layout of a house to determine functionality. They will think through an average day in the home and make sure that everything meets the daily demands required by life.
The most common reason for moving is having outgrown your current house. When you find a house that has the perfect layout it’s much more likely to be a home that you can stay in longer. The importance of the layout of a house can get lost on the logical home buyer who is more focused on data. All square footage isn’t created equal; you can’t just rely on the numbers... the layout has to be right for your needs.
THE CONS OF EMOTIONS
Impulse Decisions - The biggest problem with emotional buyers is that they are prone to make impulsive decisions. A thought like “there may be multiple offers on this property” can cause an emotional home buyer to panic and make an offer that is too high or decide to move forward on a house before thinking it through completely. There are appropriate times to make a quick decision on a home but analytical thinking must be a part of the equation.
Exhausted Quickly - Home Buyers who are emotionally led put so much of themselves into the home search that they can get worn down quickly and settle on a home out of pure exhaustion. If you know that you are a highly emotional home buyer allow yourself plenty of recovery time during the process. There are SO MANY emotional aspects to buying a house. From getting it under contract, to performing inspections, to hearing that your loan is going to need more time to process. The entire journey is an emotional roller coaster.
How LOGIC Influences the Home Buyer
Logical home buyers are usually looking for the best deal based off of the data. They don’t care as much about the layout, color of the walls or flooring type as much as they care about the price per square foot. Their biggest fear is that they will choose the wrong house and lose money when they sell it one day.
Logic, or knowledge driven home buyers need data. Lots of data. They want to know what recent homes in the area sold for, what the current owners bought the home for, what money has been put into the home since they bought it and how much the home is expected to appreciate in comparison to other homes.
You won’t see many logical homebuyers on HGTV because they aren’t as fun to watch. They don’t provide a constant stream of feedback as they walk every inch of the property for the first time. They will gather data and then process it over a period of time.
Some questions you might hear from a logic driven home buyer, that you probably wouldn’t hear from an emotional home buyer are:
- What is the neighborhood sold price per square foot?
- Is there anything that would make this home hard to sell later?
- What have other homes in the area sold for?
- What are the average utility costs and yearly property taxes?
- Is there an HOA in this neighborhood... if so, what are their regulations?
THE PROS OF LOGIC
No Surprises - Data driven home buyers typically look over everything very thoroughly before purchasing a home. They analyze every aspect to determine if the data makes sense to move forward. For this reason, they tend to have less surprises later on because they’ve thought through all of the scenarios that most concerned them when they first looked at the home.
Less Risk - Logical thinkers usually prioritize maintaining a strict budget and are naturally financially cautious. They strictly adhere to the market value of a home and won’t stray above it, or make updates that would jeopardize their bottom line when it comes time to sell. Logical home buyers rarely find themselves in a home they have to take a loss on to sell.
THE CONS OF LOGIC
A Home You Don’t Love- Data provides the logical home buyer with a sense of control and helps them feel safe moving forward in the buying process. However this data can’t tell you how it will feel to live in the home. Because sentiment isn’t a part of their buying process, the logic driven home buyer may find themselves in a home they don’t love, aren’t content with and be right back on the market in a couple of years. Logical thinking buyers can be so wrapped up in the numbers that they don’t consider the cost of moving too quickly after a home purchase you aren’t content with.
Fixated On Price - It’s important to get a fair value on any home you buy. Being in a home you can’t sell because you owe more than it’s worth is a situation no one wants to find themselves in. However, the logical minded home buyer can be so fixated on the price that they overlook options that could overcome the price factor. A home with a lot of character or in a great neighborhood may be worth more than another of similar square footage. A special feature or the finished result after a great remodel may drastically increase your homes value.
Both Emotions & Logic are Necessary
As you can see both of these traits bring their advantages and disadvantages to the home buying process. It is crucial to employ the benefits of both if you want to find a home you will be happy with and feel great about financially.
When considering a home remember to be intentional about valuing both the data and the emotion of the property. Think of the memories you will make during your time there. How will the home feel to live in? Does the layout work for your needs? Can you imagine yourself living in the space?
Also remember to consider the logical side: Is the asking price in line with the market value? Will you be able to sell if you need to? Can you make improvements and add your personal touch to the home without bringing your investment higher than market value?
Final Thoughts:
Being aware of the pitfalls and benefits of the logical vs emotional home buyer will help you to make a great decision you won’t regret once you do find the right house.
Buyers remorse is an awful feeling and is greatly compounded when it’s over a home which is one of the largest purchases you will ever make. Protect yourself by being aware of the home buying process and keep an eye on the decisions you are making.
A great REALTOR® will help you with this, as well as gently pointing out when you stray beyond your criteria, or are ignoring important data. Ultimately you as the home buyer are the one making the decisions- so it’s up to you.
If you are considering purchasing a home please contact us we can meet with you to discuss the home buying process.
The Linda & Ryan Lowe Team