With any major purchase decision there are a number of psychological decision-making stages that we, as buyers, go through.
Buying a property is the biggest and most drawn out purchase decision most of us make in our entire lives. So understanding these stages can work to your advantage:-
1/ Problem recognition
It all starts when you – or your partner – recognise a need. For example getting married may trigger the need for larger accommodation than your existing ‘bachelor pad’, or the news that a baby is on the way could prompt the need for a third bedroom.
The main alternatives are then broadly considered – usually either renting or buying a larger home, or building an extension. Other alternatives, such as living with Mum and Dad, renting a houseboat or buying a caravan may be utilised temporarily.
2/ Information search
Next comes a long period of information gathering – browsing magazines, taking advice from friends and parents, even some preliminary property searching online.
This usually evolves into actively searching for information. As it becomes more urgent, you start to notice For Sale boards, check out estate agents, and even arrange to look over a few properties.
The most important sources of information are family, friends and work colleagues, as well as your own previous experiences (eg if you’ve been renting the property before buying it).
Buying a property is a complex, high-risk decision, so we attach considerable importance to personal testimonials and opinions. Independent media are also important in shaping opinions. as opposed to ‘managed’ commercial messages.
The information we seek also depends on the sort of lifestyle we aspire to.
This partly depends on what stage of life we’ve reached – thrusting young executives may be seduced by the cool urban chic of a docklands warehouse conversion, whereas families may prefer the lifestyle choice of a Georgian townhouse or a smart new executive home; older age groups might perhaps opt for a classic country cottage or a retirement village.
3/ Evaluation of alternatives
There comes a time when you’ve received a lot of information and want to start narrowing down your options, perhaps by limiting your choice of neighbourhoods, and making decisions on what’s realistically affordable. In other words you begin to get focused on what’s really important, such as the numbers of bedrooms, nearness to shops etc.
Enough already! At this stage you are reaching crisis point and just want to make a decision, because by doing so, you will feel less confused, more satisfied, more certain. Not altogether surprisingly, it’s first-time buyers who are more likely to succumb to information overload and confusion. The problem is, the desire to ‘cut and run’ often leads to the wrong decision being made. Indeed, some unscrupulous firms have been known to deliberately engineer systematic overload of vulnerable consumers to mis-sell financial products etc.
5/ The purchase decision
Ultimately, the alternatives will be ranked in order of preference and a decision made. However as buyers we continue to be highly sensitive to potential risks.
What if there are hidden faults in the property or there are neighbours from hell living next door?
What if mortgage rates rise?
Are we doing the right thing?
Consumers often adopt ways of dealing with risks, perhaps by taking the precaution of instructing a Building Survey, or by avoiding properties that are likely to need expensive renovation work. Some buyers may only consider new homes with an NHBC warranty.
6/ Post purchase
The problem with property is that having made the decision to buy, there is then an interminable ‘cooling-off period’, where buyers and sellers are subject to all kinds of influences that can muddy the water and cause you to pull out.
Which is why the word ‘SOLD’ in estate agent language actually means ‘under offer subject to contract and survey and a million other potentially negative influences’.
It seems we go on looking for justification that we made the right decision, which is why good agents continually reassure buyers by bolstering them with positive messages all the way up to exchange.
See our other posts for information relating to dealing with estate agents, it may just save you some major headaches in the future!