4 Factors That Influence Home-Buying
There are dozens of factors that influence home-buying and whether a buyer will take the plunge and sign on the dotted line – some of which can’t be controlled. Things like emotion, cultural beliefs, perceived value, and ideal lifestyle all play a part in whether or not a house sells quickly.
Here, we dive into each of these factors to explain how they impact the decision making and buying process – and what you can do as a seller to make your home more desirable.
One of the most common factors that influence home-buying and whether a buyer might purchase a home is emotion.
There are plenty of emotions that can come into play while searching for the perfect home – happiness, excitement, fear, uncertainty, optimism, etc. – and these emotions can sometimes be cyclical. What a buyer might feel at any given moment can easily change at the drop of a hat.
While emotions aren’t the be-all-end-all in the decision making process, they do hold a fair amount of weight on the overall conclusion. For example, in 2013 the Commonwealth Bank of Australia conducted a survey that found that 44% of Australian buyers paid above their original budget for a property because they “really liked it.” For one reason or another, it spoke to them on an emotional level and they were willing to adjust their initial game plan.
Author, speaker, and host of the podcast “The Buyer’s Mind”, Jeff Shore also talks in his show about how three key emotional factors will always dictate why people do what they do – why they make the choices that they make.
It could be any combination of emotional factors, but they typically tend to include things like pain, fear, an immediate emotional attachment, financial problems, promise or expectations, and cultural beliefs.
These emotional reactions could be the psychological cocktail that leads a buyer to decide whether or not to buy a home, even before the agent has a chance to talk about the wrap-around porch or the large, sunlit kitchen.
Sometimes, as buyers, we are drawn to things that don’t always make sense. We make impulse purchases not because we need something, but rather because it caught our eye. It called out to us. We liked it.
And while buying a home can’t be compared to picking up a pack of gum in the checkout line in the grocery store, it would be naïve to exclude emotion, and more specifically, impulsive emotion, as one of the top factors that influence home buying.
If you’re currently selling your home and have found yourself in a bit of a real estate plateau (your home just isn’t selling as quickly as you’d like it to), try taking a look at your common buying demographic and understand the emotional responses that could be tagging along with them.
For one example, are your typical buyers coupled? Are they single?
While it would be rude to ask these questions point-blank, you can get a feel for what a buyer’s relationship status might be and how that could play into their decision.
Newlyweds, for example, may be more hopeful and optimistic about owning their first home together than say someone who has been living on their own for the past five years. Someone who is single may have less motivation to make a purchase than a newly married couple who are fantasizing about starting a family and a life together. Excitable newlyweds may be more willing to overlook more technical details and lean towards how the home makes them feel, whereas a single person might be less interested in getting caught up in emotion and therefore slower to put pen to paper and make an offer.
Culture is defined as “the customs, arts, social institutions, and achievements of a particular nation, people, or other social groups,” and has a direct impact on why someone might choose to buy a home.
For example, in Japan, four is considered to be an unlucky number and is meant to be avoided whenever possible. That’s because the Japanese character for the number four when sounded out is phonetically similar to the Japanese word for “death” – shi. Due to this, the Japanese actually developed a secondary character for the number four – yon.
If you visit Japan, you might notice that some buildings will exclude the number four from their addresses or completely skip over the fourth floor, going straight from the third floor to the fifth.
The same can be said of the Chinese, who are also noted with associating the number four with death.
In an article by Mansion Global, Gaby Rogers, associate director of sales at Colliers International in Sydney, noted that she’d witnessed developers completely change their plans based on the superstition of the number four.
When talking about a residence that was sold back in 2010, Rogers claimed that it was the first time she’d watched a developer erase all of the fours out of a building entirely. There was no fourth floor, fourteenth floor, or twenty-fourth floor, and absolutely no units that contained a four within the unit number.
On the contrary, a Tel Aviv director of sales and marketing for Eastern Europe at Sotheby’s International Realty, Shelly Shmelzer, explained in the same article that in Jewish culture, the number 18 is often associated with “chai” – the Hebrew word for “life”. It’s considered lucky and she’s often witnessed Israeli buyers request to close deals, sign contracts, or negotiate terms on the 18th day of the month.
Buyers might also be influenced by cultural concepts like feng shui, an ancient Chinese practice that focuses on creating “a harmonious environment” and allowing the flow of energy (or qi) to promote favourable effects.
According to thespruce.com, house features that can create “bad feng shui” are things like staircases that face the front door, bathrooms in the center of the home, a master bedroom that’s located directly over the garage, and long, narrow hallways.
The art of feng shui might seem like another outdated fad to some, but it can directly impact why someone might choose to purchase a home.
For example, in 2012, feng shui master, Johnson Li offered up his services to a Polish family who was looking to sell their home located in Surrey. Their house was on the market for six months and they had no potential buyers. Their home was stagnant on the market.
After Li assessed their home and gave them suggestions on where to make changes based on feng shui principles, they were reportedly able to sell their home only two months later.
As Surrey and the surrounding areas (Cloverdale, Langley, White Rock, etc.) are melting pots of multiculturalism, it’s important to take cultural beliefs into mind as one of the most common factors that influence home-buying.
Aside from emotional responses and cultural beliefs, another one of the many factors that influence home-buying is the overall, perceived value.
Perceived value is much more concerned with how a property looks versus its actual worth. Common features that can harm a home’s perceived value are simple things such as:
- mismatched, outdated furniture;
- tacky paint colours, or old-fashioned wallpaper;
- superficial damage like scratches or marks;
- and too many personal items lying around such as photographs, phone bills, birthday cards, etc.
Even if the home has great bones, an amazing backyard with a beautiful pool, and walkscore of 98, if the perceived value is low you might be stuck with low-ball offers or potentially, none at all.
It’s important to keep in mind that what might be aesthetically pleasing for you, won’t be the same for everyone. It’s not a one-size-fits-all scenario.
For example, if a buyer walks around a home and finds the furnishings distasteful, or the wall colour to be too loud, it could turn them off from making a purchase – even if these are easy fixes.
This could be related to the rise of turnkey properties or homes that are “move-in ready”. These properties are called “turnkey” because all you need to do is turn the key. Everything is already placed from furniture, home appliances, and utensils. You just have to bring yourself – and maybe your clothes.
These homes are often expertly staged and decorated and tend to suit a more luxurious lifestyle, although not always.
Research and real-world experience show that today’s buyer is leaning more and more towards move-in ready homes that require little to no renovation or repair.
According to Jeff LaGrange, a Vice President for another real estate company, “sweat equity doesn’t have the appeal it did 20 or 30 years ago…most buyers today don’t have the time, energy, or expertise to do serious remodeling.”
However, you don’t necessarily need to actually have your home be move-in ready – you can just make it feel like it is with services like staging. Staging helps to make your home look not only more aesthetically pleasing to the general public, but also takes care to remove just enough personality from the home.
While charm is often seen as a good thing, too many personal items can be the obstacle between you and selling your home. A buyer wants to see themselves living in your home – and it might be hard for them to do that while staring at a 30” x 60” portrait of you and your family.
Overall, if you take the extra steps to fix up even the smallest of blemishes and enlist the aid of a professional staging service (like the one we offer here, at Katronis), your perceived value could go up, and therefore help you successfully sell your home.
The Ideal Lifestyle
Although there are plenty of reasons that can impact a buyer’s decision to purchase a home – some more general, and some more niche – an overarching factor that influences home-buying is how does the home fit into the buyer’s life.
What kind of lifestyle does the home give off?
For young families, is it close to childcare? Nice parks? Good schools? Is it in a nice neighbourhood?
For older couples, is it in a quiet location free of frequent partiers? Is it close to amenities? To community centers?
If a home has many features that a buyer is looking for, but doesn’t fit their lifestyle, it might be a hard sell – especially if things like community, location, and perceived value are important.
When it comes to factors that influence home-buying, it’s important to take everything into consideration without obsessing over every little detail. At the end of the day, if it’s the right fit for you and the right fit for the buyer, your house will sell in due time.
It’s all about finding what works for everyone.
Buying or selling a home? In need of expert, real estate advice? Contact us here today!