Purchasing property is a massive deal and It isn’t difficult to allow our emotions to disrupt our professional and more calculated views of a particular home we have in mind to buy. So, when it comes to the process, should we be using our hearts, or taking the direction we’ve rigorously analysed with our heads?
Some real estate and investment experts will strongly advise not to listen to your heart, where as many other psychology professionals will argue that using your emotions to your advantage can be extremely beneficial.
It is commonly known that in theory, the decisions people make are ultimately derived from calculating and evaluating alternatives. However realistically, choices are also heavily influences by both our immediate and potential emotions – i.e. potential emotions like the ‘what ifs?’
As prepared and conclusive as we’d like to be, our emotions seemingly get the better of us most of the time, regardless of the nature of the decision.
Do you really want to be within walking distance to that ‘great school’ nearby? Or are you just prioritising it to avoid one of the other alternatives? This backs up the argument that if you come across a place that fits your ‘dream home’ criteria, you’ll generally always be able to find a way to excuse your professional analyses, and buy something that you know you can’t afford.
This gets seen time and time again at auctions across the entire country. It may be somewhat acceptable to bid a few thousand above your ‘limit’ or the maximum figure you had in mind. However, its quite easy to get carried away and let those few thousand turn into tens of thousands, and it’s all based upon the emotions you’ve built up in your head.
While this is obviously beneficial to vendors, it can come as a massive shock to the buyers later on once the paperwork is drawn up and sitting in front of them. Luckily, there are a few ways to ensure your heart doesn’t completely steer the ship in these instances such as:
If you’re planning on buying property with somebody else, its always a good idea to take your partner to the auction with you. This way you’re able to keep each other in check, increasing the chance of being able to dissipate any sudden financial contemplation with simple discussion.
Never attend inspections that are initially advertised above your maximum willing expenditure. Temptation is unbelievably powerful, and you don’t want to risk being subjected to it surrounding such a mammoth purchase.
Register your budget and criteria with selling agents in your desired area. This kind of ‘locks in’ your budget and theoretically can limit your spending as they’ll only be notifying you of available properties within your means.
In conjunction with these pointers, you should always crunch your numbers, then crunch them again! Being negatively reminded that you simply just can’t afford that property may encourage you just take your time and begin looking elsewhere.