3 WAYS TO KEEP YOUR EMOTIONS IN CHECK
December 10, 2016 | Richard Sites
Emotions Can Run High in Real Estate But Not if You Know How to Control Them
There’s a saying that success is 90% perspiration and 10% inspiration. In real estate a similar analogy applies. Home buying is at least 50/50; psychology and money.
I have been a local real estate agent for 13 years and one thing I’ve learned is that emotions can easily trump money when it comes to buying or selling. It’s not like this in commercial real estate where the numbers do the talking.
Let’s talk about why emotions play such an important role in home buying.
Years ago, I owned a company and used to buy trucks from fleet sales. The used vehicles were auctioned off by one of those classic auctioneers that talks really fast. I know you you have heard that type before. They talk a kind of chatter that you can’t understand.
This fever pitch is designed to whip up emotions among buyers.
Sometimes during these large auctions buyers would get into a bidding frenzy and end up paying more than they expected for the truck. The way I handled this was to go through the list of trucks before the auction and write down the maximum I would pay for each vehicle. That way I kept my emotions in check and didn’t end up paying more than I wanted.
The Stock Market
The two big emotions in the stock market are fear and greed. They cause people to miss good opportunities and to stay in bad investments far too long. One of the most important keys to making money in the stock market is to cut your losses short. Professional traders know their exit price at the time they make a purchase just to take the emotion out of the trade.
HOPE is a hopeless emotion when it comes to money.
Psychology plays an important part in home buying as well. Buyers always think they paid too much and sellers always think they didn’t get enough money for the house.
As a result, both parties usually try to squeeze just a little more out of the deal.
So while they may toss thousands of dollars around casually when trying to arrive at a sale price, once that is done, the squeezing may begin.
More than once I have heard sellers say, “I’m not paying for that! If they want the house they can pay for it”.
This is an unrealistic position that is simply borne out of high emotions.
Here are 3 tricks to keep your emotions in check when buying a home:
- Choose the right agent. It sounds simple, but try to find one with a calm demeanor. One of my clients nicknamed me “the voice of reason” because of my calming influence on the deal.
- Remember: These are just numbers! If you don’t see ones that you like, scratch through them and write in those that make you happy…and calm.
- Remember that in spite of what might be said, the truth is buyers want to buy, sellers want to sell, and real estate agents want to keep the deal together. There is a saying that cooler heads prevail so before letting off steam, maybe you should just sleep on it.
If you follow these simple steps you can easily avoid the trap of turning home buying into an exhausting ordeal.
Question: Have you ever run into high emotions when home buying?