Logic vs. emotion
Last Monday , Sam Schneiderman, Broker-owner of Greater Boston Home team discussed how his ideal three family purchase came to an abrupt end. His weekly series continues:
Last week, I described how the seller cancelled my three family purchase because my lender would not commit to financing without having the exterior painted before closing. The seller’s agents weren’t happy that the lender was moving so slowly, and the seller wouldn’t extend the mortgage contingency so that we could explore other financing options. She put the house back on the market and sold the property within days for an extra $10,000.
Fortunately, I gave proper notice and got my deposit back. Unfortunately, it was a month to moving day.
My landlord rented my apartment and my fiancé and I were about to become homeless.
A friend told me about a single family right around the corner from him. We looked and got seduced by the low price and the idea of renovating. Without looking at another house, we made an offer on the spot. We were feeling kind of desperate and thought it would be nice to live so close to my friend.
Perspective:
The whole thing was kind of like a “rebound relationship”.
I advise clients under stress that, if possible, it’s a good idea to get another opinion from someone who can act as a “trusted advisor” and is committed to helping you make your best decision. At least gather all of your facts by bringing in the right people: contractors, financial planners, whatever you need.
Which is better in a real estate transaction; logic or emotion?
For those that have bought homes, would you say that you bought emotionally or logically?
For those that have sold, did you ever walk away from a good offer or accept a low offer because you acted emotionally?
If you are buying with a spouse or partner, is there an emotional/logical balance between the two of you?
How will you balance emotion vs. logic in your real estate transaction when the time comes?
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Investment property: 95% logic, 5% emotion.
Property where you intend to live: 50% logic, 50% emotion.
My two cents...
It is a well know fact - and one that is always taught at sales courses - that emotion is what makes a person do many - if not most things. From dating to getting married to making a large purchase of a car, or especially a home. Buying a home is more emotional than nearly any other purchase since it involves reconciling - usually - a husband and a wife and what they want or think they want in a home. Most often, neither is in agreement with the other which only adds to the emotion.
A person can have all the facts they need to make a purchase, but emotion makes them sign on the dotted line. If they are not emotionally involved, many people will hesitate to make a final decision or just study the situation to death.
Real estate agents spend most of their time painting a word picture of the home for sale and focusing in on the decision maker, who is in most cases, a woman. Most men don't concern themselves with interior colors or how the kitchen is layed out. Most women do. Most residential realtors are women. In commercial real estate, it is mostly men.
Assuming we are talking about buying a home to live in as opposed to an investment, Emotion must come first. That is, you should love the house, or why bother. But while emotion is an important part of home-buying, it is, by no means, the only or most important variable. Emotion must be combined, and even trumped by, with hard logic. It's a lot like marriage (and probably as costly); marry the one you love, but don't marry solely based on love.
Emotional decisions, like who to marry, should be made emotionally.
Financial decisions, like a house costing 100s of thousands of dollars, should be made rationally.
In general, the Real Estate industry tries to make housing decisions emotional ones, as it results in higher prices. That's why people live in "Homes" not "Houses". You'd pay more for a "home", right? Its warm and fuzzy!
W
it's important to understand that that for most of us it's impossible to eliminate the emotional (or irrational) from the decision making process. That's just the way humans are wired. And, a good decision must accommodate both. A house bought for "logical" reasons will not fulfill the emotional needs of the owner. We want to be happy in our houses, and being satisfied with the logic or economics of the purchase doesn't hit the happy button for most. Is it possible to get happy by being logical? It may be possible, but I think the purchase made because it feels right will be the most satisfying. Being logical about a purchase is important. It's also something we can control. Happiness is the real challenge. It's much more elusive.
Or to paraphrase August Comte, the mind is not the slave of the heart, but it's servant...
Charles,
My house isn't fuzzy. There is something in the 'frige, however...
I find that the first reaction is emotional. Then, but home inspection, the rational kicks in.
This blogger might want to review your comment before posting it.
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